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Hoover hires Alabama Power for energy audit, hopes to save $600,000 a year

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Photo by Jon Anderson

The Hoover City Council on Monday night agreed to hire Alabama Power Co. to perform an investment-grade audit of the city’s energy usage in hopes of saving big bucks.

A preliminary audit conducted by the power company estimated the city could save $603,000 a year in energy costs with changes to how the city manages electricity, natural gas and water usage.

The power company projected that upgrades to energy systems would cost $4.3 million and that the city could recoup such an investment in 7.2 years.

Potential changes could include: new water conservation measures; heat recovery efforts; upgrades to lighting, heating, ventilation and air conditioning systems; chiller upgrades; and new HVAC controls.

Alabama Power made preliminary reviews at 18 city buildings, plus the lighting systems at city parks, to come up with its preliminary estimates. Those buildings included the city’s 10 fire stations, Hoover City Hall, Hoover Public Safety Center, Hoover Public Library, Hoover Senior Center, Hoover Metropolitan Stadium, Finley Center, Hoover Recreation Center and the Hoover Police Operations Center.

As a result of the preliminary audit, Alabama Power believes it can save the city $468,571 in its annual electric costs, about $80,000 in natural gas costs and about $55,000 on its annual water bill. That would be a 39% reduction in natural gas costs, 30% reduction in electric bills and 7% reduction in water bills, records show.

The city likely could expect to see some additional reductions in operational costs, said Joey Beck, an engineer with Alabama Power.

However, the investment-grade audit will be much more detailed, will look at all city facilities and will result in specific recommendations for the city to consider, Beck said. The audit should take four to six months to complete, he said.

To perform the audit, Alabama Power will charge the city 10 cents per square foot, which should amount to less than $100,000 Beck said. However, the city will not have to spend any money until it begins to realize savings from the energy management improvements, he said.

The Hoover City Council also reviewed an audit proposal from Schneider Electric but chose Alabama Power instead.

Schneider Electric had a lot of experience working with municipalities, but Hoover Council President Gene Smith said the company failed to provide enough specifics in its presentation to the City Council on Feb. 13.

Schneider Electric sent additional information to council members last week, but it was not enough to sway the council from going with Alabama Power Monday night.

Hoover will be Alabama Power’s first municipal customer for energy management services, but the power company has done significant work for the federal government, including the Anniston Army Depot.

Alabama Power managed a $93 million project for the U.S. Department of Defense that saved the federal government $7 million a year in energy costs, Beck said. Other projects saved $340,536 a year for the University of South Alabama Hospital and $378,007 a year for the University of South Alabama Children’s and Women’s Hospital, he said.

The power company has embarked on a project for the Birmingham-Jefferson Convention Complex that is expected to save the BJCC $2.1 million a year and another project for the Mobile Infirmary Medical Center that is expected to save $1.4 million a year, Beck said.

Smith said the good thing about the energy management projects is that the city won’t have to go to the bond market or dig into reserves to pay for them. Alabama Power will front the money for the projects, and Hoover will pay the power company back, he said.

With Hoover being the power company’s first municipal customer for these kind of services, he believes the company will work extra hard to prove it can deliver quality work for municipalities, he said. “I really think they’re going to do a great job.”

Hoover Mayor Frank Brocato said the city has a lot of equipment across the city that is aging and needs to be replaced. Two pressing needs are the lights for the baseball fields at Hoover Sports Park West and the heating, ventilation and air conditioning system for enclosed areas at Hoover Metropolitan Stadium, he said.

Equipment upgrades were going to hit the city’s capital budget significantly, but the energy management plan essentially will allow the city to pay for the improvements out of the money saved by being more energy-efficient, he said.

That’s just more money city officials can use to do other things for residents, Brocato said.

“This was really low-hanging fruit, so to speak,” he said. “I’m glad that the council passed this.”

ECONOMIC INCENTIVE AMENDMENT

In other business Monday night, the Hoover City Council postponed consideration of a resolution that would authorize the mayor to amend an economic incentive agreement with Broad Metro concerning the Stadium Trace Village development at the corner of John Hawkins Parkway and Stadium Trace Parkway.

The amendment would change the beginning date of a 10-year period in which sales tax rebates will be given to the development company from December 2019 to July 1, 2020. By that time, more businesses should be open, which would increase the amount of rebates going to the developer in the beginning of the incentive period.

It would not, however, increase the cap on the total amount of rebates the developer could receive, which is $20 million.

At the council work session this past Thursday, Councilman Mike Shaw asked why the council was being asked to do this.

In November, Broad Metro asked the council to create a “Stadium Trace Improvement District” to allow the developer to finance public improvements on the property at below-market interest rates by selling tax-exempt bonds. This allowed the developer to recoup about $6 million to $7 million his company already had spent, according to his investment banker.

Shaw said the developer of Stadium Trace Village seems to keep coming back, asking for more. Shaw said he wants to know what the benefit to the city will be in extending the start date on the incentive deal by six months.

Smith said he hopes that postponing consideration of the amendment will allow issues to be taken care so the council will be able to move forward with it soon.

The council also on Monday:

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