MONSON — At a joint meeting of the Select Board, Finance Committee and School Committee on Oct. 21, the Monson Select Board voted to terminate the town’s energy management service contract with Siemens in favor of conducting the required reports in-house with support from less expensive resources.
Since 2020, Siemens has been working with the town within an energy management service contract, which utilizes the company’s services to upgrade the town’s energy infrastructure, with the goal of making the projects budget neutral. These projects were completed in three phases, Beacon Integrated Solutions Managing Director Beth Greenblatt explained at the meeting. Greenblatt is the town’s energy consultant.
As part of this contract, Siemens guaranteed specific energy savings based on the usage of the town and school buildings as well as conducted performance assurance programs to analyze if the savings were occurring as stated, Greenblatt said.
These energy savings were reliant on the building’s exact usage, including the hours of use, temperature at which the building’s climate control is set and its occupancy, Greenblatt noted.
“What is Siemens is guaranteeing is units of energy saved applied against contracted stipulated unit rates, which calculates to a dollar amount, but they’re really only guaranteeing units of energy. They’re not guaranteeing cost because they can’t. Nobody can predict the energy markets,” she explained.
This performance assurance program “wasn’t a super strong project program but it provided a bunch of tools that enabled and empowered the town and the schools to get a better understanding of how the buildings were operating,” Greenblatt noted.
However, in fiscal year 2024, the town experienced an issue with its payments to Siemens for its services due to a lack of alignment between Monson’s and Siemens’ payment schedule. As a result, the town underbudgeted for its payment to Siemens, Greenblatt explained.
“There was a mismatch between expectations and obligations of what Siemens was supposed to be paid for the work that they were doing in the fiscal years as to how it related to their program years, which were not in sync,” Greenblatt said. This resulted in $13,000 that the town still must pay to Siemens.
Following this issue, Greenblatt and Finance Director Jamie Farnum requested that Siemens suggest an alternative contract with Monson to accommodate the underbudgeted funds and future contracted work. It was the presentation of this option that led to the tri-board meeting on Oct. 21, Greenblatt said.
After discussion and confirmation from the other two committees, the Select Board voted to accept option 3, which would terminate the contract with Siemens, with the decision to be confirmed after town counsel approves it. Select Board Chair John Morrell was not in attendance at this meeting.
Under option 3, the town would still be obligated to pay the outstanding costs to Siemens, but would not continue to pay an annual fee for the performance assurance program as the contract would be terminated. Likewise, the town would not receive the guaranteed energy savings. However, Monson would need to pay Siemens approximately $10,000 for the remaining services conducted before the end of the contract, Greenblatt said.
In this option, the town and schools would utilize other available online resources as well as potentially using resources from Pioneer Valley Planning Commission and Beacon Integrated Solutions in order to meet the state’s requirements to report building performance analyses to the Massachusetts Department of Energy Resources, Farnum and Greenblatt stated.
During the meeting, both Farnum and Monson Public Schools Director of Facilities Paul DeMaio reaffirmed that they were confident in proceeding with meeting these statutorily required reports without Siemens’ support.
This option was selected over the option to accept Siemens’ modified contract or continue with the current contract. Under option 2, which was the modified contract, the town would pay a total of $350,000 over a 20-year period for Siemens’ services, Greenblatt explained. While the town would have access to some tools, it would be limited from the current contract with Siemens and would not receive operational guidance. However, the company would continue to provide the required reports to the Department of Energy Resources. There would also be an additional cost from the contract renegotiation with town counsel.
Similarly, with option 1, the town would pay $850,000 over 20 years in the current contract. This would include the currently offered support and tools as well as that Siemens would produce the statutorily required reports, Greenblatt said. The town would also be required to pay for the underbudgeted costs from FY24.
