Auburn council pauses Schneider Electric construction notice to proceed after lengthy review of energy project and financing

The Auburn City Council voted April 28 to withhold approval of a construction-phase notice to proceed for a citywide energy-efficiency and solar package proposed by Schneider Electric and financed through Bank of America Public Capital Corp.

The vote followed a two-hour-plus public hearing in which Schneider Electric presented a turnkey package that combined LED lighting, HVAC replacements, wireless thermostats, EV chargers, rooftop and ground-mounted solar arrays and related roofing and electrical work, and city staff and the city’s finance adviser reviewed the proposed financing and long-term guarantees. Council members raised concerns about the project’s assumptions, the 20-year financing term and the city’s ability to meet debt-service risks if energy-cost savings fell short of projections.

The project as presented called for a Schneider Electric construction price in the range of about $10.56 million and an equipment lease-purchase financing package with a par not-to-exceed amount of $11.05 million and a fixed interest rate of 4.22% over a 20-year term. Schneider’s presentation included an annual guaranteed energy-savings figure of roughly $486,296 and a projected lifecycle savings figure of roughly $19.65 million; Schneider and staff said the package would likely be eligible for an investment tax credit (ITC) under the federal Inflation Reduction Act that could add an…