Energy contractor urges 20‑year payback allowance for school performance contracts to enable bigger upgrades

An energy‑services representative told the Senate Education Committee on April 11 that increasing Vermont's statutory payback threshold for energy savings performance contracts from 10 to 20 years would allow more K–12 capital improvements without raising local tax costs.

Eric Lafayette, product developer with Energy Efficient Investments, described performance contracting as a turnkey option that provides no‑cost upfront audits, helps districts select energy conservation measures and can tie payments to guaranteed energy savings. "Performance contracting makes schools more efficient, costs less to operate and reduces the state's overall carbon footprint," Lafayette said, citing work with multiple Vermont districts.

Lafayette gave examples: in Springfield, upgrades to ventilation and filtration lowered energy bills by more than 20% and coincided with a 30% reduction in sick‑day absences among teachers and students, which he attributed to improved indoor air. He said the present statutory rule requiring voter approval when a proposed performance contract permits payments over a period exceeding 10 years constrains districts because many useful upgrades have longer paybacks — boilers, windows, and geothermal systems can have paybacks beyond 10 years.

Energy Efficient Investments proposed raising the voter‑approval threshold to 20 years, which Lafayette said would align Vermont with Maine and New Hampshire and with some state Building and General Services (BGS) practices. He argued that a 20‑year payback term would permit cost‑neutral tax structures and allow districts to combine measures — lighting, ventilation, controls, solar, envelope work — to address deferred maintenance efficiently.

Committee members asked about financing details and procurement. Lafayette said ESCOs can structure projects so energy savings and available rebates (Efficiency Vermont, federal Inflation Reduction Act funds, utility rebates) cover debt service. He said his firm typically receives payment up front and provides measurement and verification reporting for several years; districts ultimately own installed equipment. Lafayette gave a recent example of a geothermal project with about a 40‑year payback and noted that the firm's projects have used a mix of low‑interest loans, grants and rebates to make projects affordable.

Senators asked practical questions — whether the firm works with school facility directors, whether hazardous materials abatement is handled, and whether local subcontractors participate in construction. Lafayette said the firm performs design engineering, uses local subcontractors for construction, and manages hazardous‑materials work where needed. He offered to provide the committee with his slides, sample contracts and references.

No bill vote or amendment was taken; committee members suggested possible vehicles for statutory change (including a miscellaneous education bill) and asked staff to gather additional information, including perspectives from school business managers and facility directors.