FOR IMMEDIATE RELEASE

REGENTS APPROVE MAJOR ENERGY SAVINGS CONTRACT

CAPE GIRARDEAU, Mo., Feb. 25, 2002 - The Southeast Missouri State University Board of Regents today approved a 10-year contract with Johnson Controls, Inc., for a comprehensive energy savings program, equipment replacement and renovation services for facilities across the campus.

The far-reaching $13.4 million contract calls for utility conservation initiatives, refurbishments of the central and south campus chilled water loops, including new chillers and pumping systems, and major improvements to the power plant systems that would make it more reliable and efficient at producing steam and allow it to again generate electricity for the campus.

“In terms of infrastructure of the campus, these will be some of the most significant changes made in many years,” said Al Stoverink, director of Facilities Management. “This will completely replace the remaining older chillers on campus, put our power plant at the highest level of reliability since it was constructed so that we can generate our campus’ electricity and will upgrade all of our lighting on campus in terms of efficiency that meets today’s standards.”

Over the 10-year period of the performance contract, more than two-thirds of the cash flow to fund these improvements will come from energy reductions and operational changes that will accrue as a direct result of the energy conservation initiatives implemented under this project, said Dr. Pauline Fox, vice president for administration and enrollment management.

Based on an energy audit conducted last fall, Johnson Controls estimates that through utility conservation initiatives and other energy refurbishments, the University should experience $11.2 million in energy savings over 10 years, all of which will be channeled directly back into the program to help fund energy system improvements and to enhance system reliability. Southeast is expected to save about $1 million annually in energy costs, with that figure estimated at about $998,000 in the first year of the contract. Forty-three percent of the total energy cost savings will come from building lighting modifications, 37 percent from power plant improvements, 12 percent from building HVAC modifications and eight percent from campus chilled water retrofits.

“These savings, coupled with a major reduction in campus water consumption that is also included in this program, will result in an overall campus utility cost decrease of over 20 percent,” Stoverink said.

The remainder of the cash flow for the project will be provided by University funds, reflecting maintenance and replacement costs which would have been experienced during this period for the replacement of major equipment provided by this project, Fox said. Total cost of the project is estimated at $18.9 million.

In order to finance the project, the Board approved two resolutions, one to reimburse certain project costs with proceeds of bonds or other long-term financing, and the other that will allow the University to make arrangements for structuring and issuing such bonds or financing.

Last October, the Regents approved the initial phase of the Johnson Controls, Inc., proposal for work that would lead to the Guaranteed Energy Savings Contract for the campus. The first phase of work, which began last fall and continues, consists of an expansion of the south campus chilled water loop to enhance its capacity and serve the new residence hall under construction on the east side of Henderson Street between Broadway and Normal and to enlarge the steam distribution line from the University Center to the new residence hall.

“Our chillers on the south and central campus are well past their useful life,” Stoverink said. “They are 30 to 40 years old,” he said, adding that during the summer months, “they are barely able to keep up with air conditioning Serena, Carnahan, Crisp and Academic halls” in the central area of campus.

The first phase of work also includes repairs to the steam turbine in the University’s co-generation plant that will permit the power plant to again generate electricity for the campus. The co-generation plant has not generated electricity for about two years when production was ceased due to emission and other issues.

At that time, University officials decided that upgrades to the co-generation plant needed to be thoroughly reviewed as part of a comprehensive performance contract. Until now, that project has been on hold. Upgrades to the co-generation plant now will proceed as part of this major initiative. Stoverink anticipates that, with upgrades, the power plant will again generate its own electricity beginning in summer 2002.

The first phase of work last fall by Johnson Controls also included a detailed facility energy audit in which officials with Johnson Controls looked at every light fixture on the University campus and validated and refined the projected savings and cash flows outlined in their original proposal.

Stoverink says that during summer 2002, about 25,000 light fixtures in every major building on the University campus will be modified or replaced. Automatic on/off sensor switches for lights will be installed in many locations on campus that will allow lights to be switched off automatically when a room is not occupied.

He says Kent Library will see the most dramatic change with the installation of new lighting this summer.

“Kent Library will have industry standard lighting for the first time in two decades,” he said.

“Most older campuses have significant opportunities for utility savings just in their lighting systems alone,” he said, adding much of the lighting on the Southeast campus was installed 30 to 50 years ago. “Lighting technology today is so much more efficient,” he said.

In addition, thermostat controls throughout the campus will be reviewed and carbon dioxide sensors will be installed in some buildings, Stoverink said. These will automatically turn down fan units based on room occupancy levels, he said.

The new performance contract also will include a review of water usage on the campus in an attempt to conserve water consumption. Stoverink says this will include modifications to many restroom fixtures on campus, primarily in Southeast’s residence halls.

“Restroom fixtures today use significantly less water” than when many of these types of fixtures were installed decades ago, he said. Stoverink says some 800 fixtures and more than 1,600 faucets will be retrofitted on the campus.

Stoverink says performance contracting has become very prevalent in recent years among school districts, higher education institutions and other types of businesses and organizations.

“These contracts have really mushroomed in the last decade,” he said, adding that Missouri Southern and Southwest Missouri State University have entered into similar contracts.