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Siemens Awarded $9.3m Energy Savings Contract with Bay City, Texas

Bay City, Texas has awarded Siemens a $9.3 million energy savings performance contract expected to reduce electricity consumption by nearly 30 percent and water use by more than 70 percent over 15 years.

The energy savings performance contract, which will be financed and guaranteed by Siemens’ buildings technologies division, will focus on Bay City’s wastewater and potable water supply systems, water meters, municipal lighting and supporting information technology.

The 15-year term of the project is expected to generate a positive cash flow for the city, beginning in year one. Once the project is completed, the energy savings guaranteed by the performance contract will yield about $700,000 in equivalent energy expensive reductions every year for the duration of the contract.

Energy efficiency upgrades and infrastructure retrofits will cover 26 city facilities, including an aging wastewater treatment plant. Siemens will replace blower motors and aeration equipment, in a move expected to reduce the treatment plant’s energy use. A new supervisory control and data acquisition system will allow city workers to remotely monitor and control lift station pumps.

Other upgrades include the installation of a non-potable water source that will allow the city to save more than 16 million gallons of drinking water annually by reusing water from the wastewater treatment plant for the facility’s operational needs.

Siemens also will install more than 8,100 new water meters throughout Bay City. These will wirelessly transmit consumption data and allow the city to account for every customer’s daily usage. The meters will help ensure customers only pay for the water they use and streamline reading routines, which should free up staff resources and reduce expenses associated with manual reading of the city’s old meters.

The automatic meter reading system combined with new billing software will allow the city to provide customers with daily consumption data, online bill pay and leak detection.

Siemens has landed a number of other energy-related contracts in recent months, including a $12.2 million award by Florida A&M University expected to save the educational institution about $1.2 million in equivalent guaranteed annual energy savings. That project will focus on installing a partially decentralized steam plant heating system, a solar-thermal heating system for the swimming pool and building automation improvements.

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2 thoughts on “Siemens Awarded $9.3m Energy Savings Contract with Bay City, Texas

  1. Another 13 year payback! How positive cash flow can be derived in year 1 when the expenditure is $9.3M and only $700K per year in savings is a mystery.

  2. Well, the $9.3M is not all spent in year one, Iain. If it is spread out over the 15 years evenly, then each year the expense is only $620,000. Compared to the estimated $700,000 in equivalent energy expense reductions every year, that works out to a positive cash flow on average. Now I’m sure the payments aren’t exactly spread out evenly over the 15 years, nor are all the energy reductions put into place right away. But the statements in the story are not really that hard to believe. It simply depends on the exact financial arrangements agreed to, and the timing of the efficiency improvements.

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