CMS Energy wins $3.4 million energy services contract with University of Science and Arts of Oklahoma

OVERLAND PARK, Kan., Feb. 6, 2002 — CMS Energy Corporation’s energy performance contracting unit, CMS Viron Energy Services, today announced that it has been awarded the first energy services contract from a State of Oklahoma educational institution.

With this CMS Viron contract, the University of Science and Arts of Oklahoma became the first college in Oklahoma to take advantage of energy performance contracting. The contract, valued at almost $3.4 million, will allow the university to save energy and reduce costs while upgrading the campus infrastructure by replacing old and energy inefficient equipment.

CMS Viron is one of America’s energy performance contractors. Energy performance contractors provide energy savings through engineering analysis, the installation of more energy efficient equipment, performance monitoring of the savings and sometimes commodity management contracts.

A 10-month construction phase will begin immediately. CMS Viron will replace the university’s chilled water plant and install a new boiler, energy efficient lighting, a campus-wide energy management system and water conservation retrofits. The energy savings from these upgrades will pay for the improvements.

“This agreement with CMS Viron guarantees that the university will slash its energy bills by one-third, or $298,000 per year, or CMS Viron will start paying the difference,” said John Feaver, University of Science and Arts of Oklahoma president. “It’s remarkable. This agreement is unique for Oklahoma colleges and is a significant milestone for education in Oklahoma.”

John Mahoney, president of CMS Viron, said, “We are very excited the University of Science and Arts of Oklahoma led the way in performance contracting for other institutions of higher learning in the state of Oklahoma. The university had really done its homework and knew exactly what it wanted to accomplish with this effort; which was to provide the students, faculty and staff with a better, more comfortable, learning environment, while reaping the benefits of lower energy costs. This contract allows the university to focus on its primary function of education, while CMS Viron uses its expertise in facility management.”

Under authorization from the university’s Board of Regents, the university issued a request for proposals in July and hired CMS Viron to perform the energy audit in early October. The facilities audit was completed in early January, with CMS Viron technicians and engineers evaluating every building for energy load and potential energy saving opportunities. The result is a 238-page study on every inefficient boiler, air unit, pump and light fixture.

The university is currently spending more than $350,000 each in natural gas and electricity, plus $66,000 in water and sewer services annually, which puts the university’s utility cost at $1.96 per square foot per year. Performance contracting will shave 31 percent off those utility costs, reducing natural gas consumption by nearly 50 percent to an estimated $193,000. The university’s electric bills may be cut by 15 percent or $48,000 annually and water use may be cut by $5,000 annually. Since new equipment needs less maintenance, the agreement projects another $59,000 in savings to the university’s operations budget. The projected energy cost will drop to $1.35 per square foot.

“Energy consumption was not something our grandparents were concerned about,” President Feaver said. “On older campuses like ours, where the average age of the buildings exceeds 67 years, there are many systems that are inefficient. More energy-efficient technology has been available for years, but making it accessible under tight state budgets — well that’s what we’re addressing with performance contracting.”

“Even more important than energy savings,” said Tim Stiger, who headed the university’s evaluation team, “this agreement will significantly improve the comfort and quality of life for our students, faculty and staff.”

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