Minnesota public entities can save money with energy efficiency projects through the Guaranteed Energy Savings Program (GESP). GESP uses energy savings performance contracts – a performance-based financing option that eliminates the need for large upfront costs. The GESP is housed within the Minnesota Department of Commerce Division of Energy Resources, which receives funding from the U.S. Department of Energy’s State Energy Program. Read more about GESP in Part 1 here.
Minnesota’s GESP projects in the City of Bemidji and Riverland Community College are two examples of the benefits of GESP.
City of Bemidji
Bemidji was the first local government entity to use GESP to achieve energy efficiency upgrades. The City contracted with the energy service company Honeywell, who proposed energy saving opportunities informed by their investment grade audit. GESP and Bemidji reviewed the proposed upgrades, and decided to complete work in eight city buildings, a wastewater treatment plant, street lighting, and vending machines. Upgrades included improving energy management systems, recommissioning direct digital controls, performing air leakage service, installing hot water high-efficiency modulating boilers, retrofitting lights with LED kits, and adding controls to shut down beverage vending machines when they were not being used. Due to the vendor competition during the bidding process, Bemidji was able to complete the projects under budget. The project has a combined annual energy saving of 15%, which will save the City $126,000 per year. While energy and cost savings are typical of performance contract projects, Bemidji Mayor Rita Albrecht stated that, “what made using GESP particularly beneficial is that we received guidance from the experts at the Minnesota Department of Commerce who provided standard contracts and added certainty to the process.”
Riverland Community College
With campuses in Albert Lea, Austin, and Owatonna, Riverland Community College was the first college to use GESP for energy efficiency improvements. The college also contracted with Honeywell to perform the investment grade audit and implementation of energy efficiency measures. The energy efficiency measures implemented across the College’s facilities included lighting improvement, lighting controls, energy management controls, and building envelope. Due to the nature of energy savings performance contracts, the College was able to implement more than they would have with a traditional financing option. According to Riverland Community College Chief Financial Officer Brad Doss, “The Guaranteed Energy Savings Program allowed Riverland Community College to get work done that the college would not have been able to do within our normal operating budget.” Water conservation measures were added to the project along with upgrades to the theater’s lighting, both of which would not have been possible with traditional financing. The energy efficiency upgrades reduced energy use by 27% and will save the College more than $136,000 per year. GESP’s continuous assistance through the energy savings performance contracting process has allowed public facilities to reduce their energy use and alleviate operating cost burdens.
Stay tuned for more of Minnesota’s energy efforts to support its public entities and residents.
The Energy Department's State Energy Program provides funding and technical assistance to states, territories, and the District of Columbia to enhance energy security, advance state-led energy initiatives, and maximize the benefits of decreasing energy waste. The State Energy Program emphasizes the state’s role as the decision-maker and administrator for program activities tailored to their unique resources, delivery capacity, and energy goals.