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Energy Performance Contracts to Become More Commonplace and Affordable — Thanks to New Michigan Law
A new law, which provides local governments with flexible financing plans to conserve energy, is expected to make energy performance contracts more commonplace and affordable, according to Johnson Controls.
Michigan Gov. Rick Snyder today held a ceremony at his office in Lansing, Michigan, in recognition of signing House Bills 4990-4994, now Public Acts 119-123 of 2016, which he signed on May 19. On hand was Daniel Mack, senior account executive, Johnson Controls, who – along with Ron Stimac, senior account executive, Johnson Controls – worked closely with state legislators to make the new law a reality.
Both Mack and Stimac believe the new law will boost energy efficiency across the state, opening the door to cost-effective energy performance contracts. Energy performance contracts help pay for energy efficiency improvements, which are then paid back through annual energy and operational savings.
Under the law, effective August 17, local governments – which include cities, counties, townships and village councils and governing bodies – can enter into a financing arrangement known as a Tax-Exempt Lease Purchase (TELP). TELPs are not considered debt for local governments, making energy performance contracts more attractive.
“TELP funding will unlock significant energy efficiency and job growth potential, contributing to Michigan’s fiscal and environmental sustainability,” said Mack, who has developed self-funded energy performance contracts with Johnson Controls for more than 17 years. “TELP funding has been used all across the nation and will be an important funding option in helping Michigan municipalities save energy and upgrade critical infrastructure without upfront capital.”
A longtime proponent of energy efficiency, Gov. Snyder agreed that the new law and TELP funding will provide a significant boost to energy efficiency projects throughout the state. Local governments can begin taking advantage of the new financing plans when the law takes effect.
“These bills provide another avenue for local governments to modernize and boost energy efficiency in their facilities,” Snyder said. “This is a win-win for communities and for Michigan’s energy future.”
Johnson Controls helped establish energy performance contracting in 1983 and has implemented more than 3,000 energy performance contracts in North America alone, including many at the local, county and state government levels. Some of the more notable Michigan performance contracting projects include the State of Michigan, City of Monroe, Genesee County, COBO Center, the City of Warren and the City of Port Huron. The above enhancements are expected to greatly increase the success of this program.
To learn more about Johnson Controls’ expertise with energy performance contracting, visit http://www.johnsoncontrols.com/buildings/services-and-support/energy-and-efficiency-services/energy-performance-contracting.