Cheshire council approves expansion of energy performance contract to $55 million to fund school and town upgrades

The Town of Cheshire on April 23 approved an amendment to expand its energy performance contract (EPC2) to cover up to $55,000,000 in facility improvement measures across town and school buildings, after a detailed presentation outlining scope, financing and timelines.

Presenters for the owners’ representative and the energy service company told the council the package includes 17 energy conservation measures (ECMs) — solar arrays, fuel cells, window and roof replacement, HVAC upgrades and energy-management systems — spread across 16 buildings. They said the combination of annual energy savings (estimated at $2.3 million), federal tax credits under the Inflation Reduction Act (direct‑pay/ITC), state school construction grants and other rebates and incentives would reduce the town’s net financed amount and enable the project to be cash‑flow positive over approximately 15 years.

Town staff emphasized a number of timing constraints: a Bank of America rate lock for an initial financing tranche of roughly $22.4 million expires April 30; a safe-harbor provision tied to completing at least 5% of certain solar work by early July affects eligibility for IRA credits; and school construction grants (about $15.76 million cited by presenters) are necessary to achieve the full stated scope. Presenters said they would limit immediate work to measures that can be funded with available financing and expected grants and would add additional schedules under a master tax‑exempt lease purchase as more funding becomes available.

Council members pressed presenters on guarantees, verification and maintenance. Johnson Controls representatives said energy‑savings guarantees and measurement-and‑verification protocols are contractually embedded; presenters said warranties and maintenance arrangements address equipment degradation and that, historically, previous EPC work produced savings beyond guarantees. After discussion and clarification, the council voted to approve the amended EPC authorization so the town can proceed with financing and contract execution. The motion passed unanimously by those present.

Next steps include finalizing closing documents with the bank, executing amended contract documents and advancing eligible measures as grants and tax credits are confirmed.