Energy service firms urge 20-year payback option to expand school performance contracting

Eric Lafayette, a project developer with Energy Efficient Investments, told the Senate Finance Committee that energy savings performance contracting could help Vermont school districts address aging infrastructure without upfront capital.

Lafayette said ESCOs perform up-front, investment-grade audits at no cost, identify energy conservation measures and finance, design and verify projects. "Energy savings performance contracting...is a solution to address aging infrastructure and deferred maintenance at our K through 12 schools while making them more efficient, cost less to operate, and reduce our overall carbon footprint," Lafayette said.

He explained ESCOs package measures such as roof, window and mechanical work, building automation and LED lighting into contracts where projected energy savings cover payments. Lafayette told the committee ESCO work often triggers other required upgrades — asbestos abatement, ADA improvements or life‑safety work — because construction thresholds are crossed during ventilation or mechanical upgrades. He said ESCOs also help secure rebates and grant funds and cited a recent example where a client received $96,000 under the Inflation Reduction Act for a solar project.

Lafayette pressed for a statutory change. Under current Vermont law he cited (recorded in testimony as "Vermont statute 3,448, section C number 3"), school districts must obtain voter approval for any performance contract whose payments extend beyond a 10-year payback. "We're asking that it get changed to a 20 year (payback), that really matches the reality of energy efficiency today, the life expectancy of the equipment, and then ultimately to provide more upgrades for the school," he said. Lafayette said a 20-year term would allow inclusion of measures such as roofs and windows that commonly exceed a 10-year payback and would align Vermont with neighboring states.

Committee members asked about project sizes, financing mechanics and contractor availability. Lafayette gave example project ranges from small LED retrofits of about $20,000 to multimillion-dollar projects such as a roughly $2.5 million cost-neutral project for Mill River and a high‑school mechanical replacement estimated at $6.7 million. He explained financing models range from lease financing sourced in banks to local bonds where voter approval is required if payback terms exceed statutory thresholds. He described common funding sources ESCOs use: Efficiency Vermont rebates, utility incentives, USDA low‑interest loans and, when available, federal programs such as IRA direct-pay options. He said some programs are prescriptive — for example, certain Efficiency Vermont incentives target electric measures but not thermal fuel conversions.

Lafayette described measured results from clients: a Springfield School District project completed in phases showed a 20% reduction in energy bills and a reported 30% reduction in sick days after a ventilation upgrade, he said. He also said life expectancy assumptions matter for financing: boilers and roofs commonly have roughly 20-year lifespans while larger wood‑chip boilers may last decades.

Lafayette concluded by offering references for districts that have used ESCOs and said he was available for follow-up. "We've had a great success in the state and we look forward to hopefully being part of addressing a lot of these deferred maintenance at our schools," he said.

The committee did not take formal action on Lafayette's request; he presented as a witness and answered committee questions.