Energy Contracts Make Kansas a Leader in Savings

September 10, 2003

Although beset by budget woes like every other state, Kansas is benefiting today from an energy efficiency program it began three years ago. Through energy savings performance contracts, Kansas is saving millions on its energy bills after increasing the energy efficiency of its buildings.

Already in place in many states, Kansas began work to put energy savings performance contracts in place in 2000 with the passage of "enabling legislation" by the Kansas Legislature (KSA 75-37,125). In addition, the state implemented a program to pre-quality energy service companies (ESCOs) to bid for work on state facilities. These companies finance efficiency improvements to state facilities and pay for the projects with energy savings. After the projects are paid off and terms of the contracts are complete, the state continues to reap the savings from improved efficiency in its buildings.

In addition to qualifying ESCOs, Kansas established low interest bond financing available to state agencies through the Facility Conservation Improvement Program and the Kansas Development Finance Authority.

This summer, Kansas released information on its first series of energy savings performance contracts, and the numbers are good news for the hard-pressed budget for the state of Kansas. Projects under way today involve buildings with a combined floor area of more than 20 million square feet. They yield an estimated annual savings on Kansas' energy bills of more than $7.1 million and will pay for themselves in energy savings—simple payback—of 10.8 years. Half of the floor area (square feet) in buildings owned by the state will soon be covered by an energy savings performance contract.

Results from Energy Service Performance Contracts for
Kansas Facilities*
Project costs $77,861,749
Estimated annual savings $7,192,832
Simple payback 10.8 years
Total square feet of building floor area involved 20,853,152

*These results include eight projects under construction and nine projects in final negotiations as of September 1, 2003.

Projects under construction include:

  • Hutchinson Correctional Facility
  • Kansas Neurological Institute
  • Kansas School for the Blind
  • Kansas State University - Campus
  • Kansas State University - Housing
  • Pittsburg State University
  • University of Kansas - Campus
  • University of Kansas Medical Center

As in other states, DOE's Rebuild America has led the charge for performance contracting. For details, see its local partnership called Rebuild Kansas. The Kansas Corporation Commission was key to moving the process forward and documenting savings, and DOE's State Energy Program supports the KCC's involvement in these projects. This documentation is important because it shows state leaders that efficiency saves the state its cash reserves. For more details, see Rebuild Kansas' database of building projects.