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Avers to ask city to consider Thermal

Company: Steam system could save $1M-plus annually in utility costs

Monday, November 7, 2016

By Kalea Hall

khall@vindy.com

YOUNGSTOWN

Today, the executive of the city’s district energy system will present why he thinks the city should stick with steam.

Carl Avers, chief executive officer of Youngstown Thermal, wants to keep the city on the system for heating, add cooling services and change the way the city turns on the lights.

Avers asked for a chance to present his plan for the city, which is what he will do at 5 p.m. today at the city council meeting of the buildings and grounds committee.

“We would like them, and frankly everyone else in town, to modernize their buildings with smart money,” Avers said.

The “smart money” comes from the zero-percent financing Youngstown Thermal offers on the capital it finds for customers.

“Our capital can only be targeted for energy efficiency,” Avers said.

Youngstown Thermal has proposed to take the city’s utility costs, which includes steam service, electricity and natural gas, to $2.7 million per year. In 2015, the city paid out $4,005,065 in utilities, according to the city’s finance department.

The company would do this by providing district steam services to the city buildings except the water department, establish steam-based cooling and contract with the city to enroll in a “progressive” electric purchasing program.

“It’s a series of projects,” Avers said. “It involves restructuring their electric and gas services.”

The cost to the city to transition its utilities under Avers’ plan: nothing.

“The cost comes out of the savings,” Avers said.

Right now, Youngstown Thermal provides steam service to city hall, the police department, 20 Federal Place, the city hall annex and the downtown fire station. The city’s natural gas is provided by Direct Energy through an agreement with Dominion. The city’s electricity comes from Constellation through an agreement with Ohio Edison.

The city decided last summer to seek bid proposals for its central heating and cooling services after Youngstown Thermal lost a top customer in Youngstown State University.

YSU had Johnson Controls, a Milwaukee-based company, build a new $16 million steam plant that YSU said would save about $2 million a year.

“We are concerned about the long-term financial stability of Youngstown Thermal,” Youngstown Mayor John A. McNally said.

The city also was concerned over some of the challenges other service users have had with Youngstown Thermal, McNally said.

The mayor recently received a letter from downtown businesses on the Youngstown Thermal system about their concerns of what would happen to Youngstown Thermal financially if the city were to go off the system.

“The administration and the council have to think of the effects,” McNally said.

In addition to Youngstown Thermal, Middleburg Heights-based Brewer-Garrett Co. submitted a proposal to the city.

In October, the city said it would dump Youngstown Thermal and go with Brewer-Garrett, but the buildings and grounds committee voted to give Avers an opportunity to pitch his proposal before a final decision is made.

Brewer-Garrett’s proposal puts an end to purchasing direct steam altogether, focusing instead on constructing local boiler plants at the city-owned buildings previously serviced by Youngstown Thermal.

The steam boilers would have a service life of at least 35 years or more with proper maintenance, according to the proposal.

During a presentation to the city’s buildings and grounds committee, Brewer-Garrett said the city would pay the company $1,839,700 for the work, guaranteeing that the municipality would save at least $3,234,180 over 15 years. After the initial cost, the city would save $1,294,480 under the proposal.

The Vindicator requested the proposed contract between the city and Brewer-Garrett, but that proposal was denied because it “is exempt from disclosure as the contract is in the process of being negotiated and protected by attorney-client privilege,” said Anthony Donofrio, city deputy law director, in an email.

Before the city enters into an agreement with Brewer-Garrett, city council and the board of control have to approve it.

Contributor: Staff writer Graig Graziosi