Dear Friends and Neighbors,
On the heels ofthe Siemens Cogeneration¹ controversy is new criticism of the Siemens GeoThermal system at Warren County Municipal Center.
In 2007 the Warren County Board of Supervisors approved a Siemens GeoThermal system to provide cooling and heating at the Warren County Municipal Center at a cost of $4.3 million². Warren County is about half way through the contract. It was sold in to be “budget neutral” due to “stipulated” savings projections. Serious issues and questions are now being asked. You do not have to be an engineer to understand the problem.
The expensive GeoThermal system has not provided the necessary heat in the winter so the county has gone back to using the old boilers to produce heat instead. Now the old boilers are in need of replacement. This was verified last week on a tour with Frank Morehouse who is the Superintendent of Buildings and Grounds at Warren County. The cost of a new boiler is estimated at $100,000 to do the work in the winter of the $4.3 million Siemens system.
Travis Whitehead a Professional Engineer (PE) and private citizen has now spent hours analyzing the system (without pay). Here is Mr. Whitehead’s report: http://www.westcottupny.com/wp-content/uploads/2014/04/Siemens-contracts5.pdf.
Below are some of the issues and questions Mr. Whitehead raises:
1) Why did this project get approved in the first place? The county agreed to payments of $4.3 million with a promise to see just $113 more in savings after 15 years. Look at the approved project Pro Forma:
www.westcottupny.com/wp-content/uploads/2014/04/GeoThermal-ProForma.pdf
Note: One of the most perplexing elements is how the County Treasurer Frank O’Keefe repeatedly tried to warn Supervisors of financial issues, questions and risks, but he was ignored. Here is a link to documentation of this – see page 5 where he points out the guaranteed savings for that year is $5.00: www.westcottupny.com/wp-content/uploads/2014/04/2011-13073-15-WC-Treasurer-Correspondences-35-pages.pdf
2) Was NYSERDA brought in to verify savings as promised? The Board was told the Siemens contract would be “null and void” if savings were not found. NYSERDA would be brought in to determine this. It is unclear if NYSERDA has ever been involved.
Source: http://www.westcottupny.com/wp-content/uploads/2014/04/Whitehead-Email-Nov.-17-2015.pdf
3) Why hasn’t the county aggressively questioned Siemens to explain the lack of performance? Since year one the GeoThermal system has not been operating in the winter. That should have been reason enough.
- According to Mr. Whitehead’s analysis the projected savings for the Facility Improvement Measures (FIM’s) in the contract reduced electricity consumption by 41% and gas by 72%.
- Mr. Whitehead obtained the actual electric and gas consumption data which indicates the true energy reductions were only 18% and 11% respectively.
Sources:
www.westcottupny.com/wp-content/uploads/2014/04/Siemens-GeoThermal-Analysis.pdf, www.westcottupny.com/wp-content/uploads/2014/04/Siemens-GeoThermal-YEAR-1.pdf, www.westcottupny.com/wp-content/uploads/2014/04/Siemens-GeoThermal-YEAR-2.pdf, www.westcottupny.com/wp-content/uploads/2014/04/Siemens-GeoThermal-YEAR-3.pdf, www.westcottupny.com/wp-content/uploads/2014/04/Siemens-GeoThermal-YEAR-4.pdf, www.westcottupny.com/wp-content/uploads/2014/04/Siemens-GeoThermal-Contract-Savings.pdf, www.warrencountyny.gov/gov/min/2008/2008-08-15_r.pdf
4) Why was a less efficient unit installed than what the contract asked for? At the February 1, 2011 County Facilities Committee meeting it was stated “a 93% efficient unit was supposed to have been installed; however, the unit that was installed was 80% efficient which had resulted in less savings.” As of 11/10/2015 the 80% efficient unit is still in place.
Source: www.warrencountyny.gov/gov/comm/county_facilities/2011-02-01.pdf
5) Why weren’t the thermostat setback savings challenged with Siemens when our own Superintendent of Buildings and Grounds stated they do not work? Again at the February 1, 2011 meeting it was stated the county was not achieving the setback savings because the county had deviated from the schedule set in the contract, but “Mr. Morehouse stated that it had been determined that the system was not capable of reheating the building to the appropriate temperature by 8:00 a.m.”
Source: www.warrencountyny.gov/gov/comm/county_facilities/2011-02-01.pdf
6) What is the basis for the County Administrator’s confidence in the Siemens Performance Guarantees? At the February 1, 2011 County Facilities Committee meeting “Mr. Girard asked Mr. Dusek if the Energy Performance Assurance Report was acceptable and Mr. Dusek responded that with the exception of the hot water boiler replacement and the temperature set point issues, the savings had been in excess of the guaranteed amount.”
Source: www.warrencountyny.gov/gov/comm/county_facilities/2011-02-01.pdf
7) Why was the County Facilities Committee directed to terminate the Siemens Performance Assurance reports? At the January 29, 2013 County Facilities committee meeting the committee voted to terminate of the Performance Assurance reports from Siemens. This may have adversely affected the county’s ability to seek the “guaranteed savings” that Siemens promised in the contract. Source: www.warrencountyny.gov/gov/comm/county_facilities/2013-01-29.pdf
8) What does the county now think about the actual savings versus the real cost? This was brought up today in the County Facilities meeting with agreement to address the situation at the next meeting.
Note: Mr. Whitehead states “Based on actual performance, and actual rates, it looks like the actual savings over the 15 year contract life will be less than $1 million on a project that will cost over $4.3 million.”
Sources:
www.westcottupny.com/wp-content/uploads/2014/04/02-06-06-Siemens-Prelim-Proposal-Municipal-Ctr.pdf, ww.westcottupny.com/wp-content/uploads/2014/04/Siemens-GeoThermal-Contract-Savings.pdf
9) Is there anything the county can do to stop making payments on a GeoThermal system that doesn’t work to provide the needed heat in the winter? The State of NY insisted that a clause be inserted in every Energy performance contract, including this one, that if the Board does not appropriate the funds to pay for the project that they have no legal or moral obligation to do so.
Source: N.Y. ENG. LAW § 9-103 : NY Code – Section 9-103: Energy performance contracts 2. Any energy performance contract entered into by any agency or municipality shall contain the following clause: “This contract shall be deemed executory only to the extent of the monies appropriated and available for the purpose of the contract, and no liability on account therefor shall be incurred beyond the amount of such monies. It is understood that neither this contract nor any representation by any public employee or officer creates any legal or moral obligation to request, appropriate or make available monies for the purpose of the contract.”
Note: A request will be made at the Board Meeting this Friday to not appropriate funds for this project until these issues are addressed.
Mr. Whitehead said he decided to do this work after hearing the Siemens Cogeneration plant was an aberration and the two other Siemens projects were saving the county millions. Mr. Whitehead analysis calls this claim into serious question.
To date Warren County has spent $2.5 million on a system that isn’t working in the winter to provide the needed heat. We need to once again get to the bottom of this with Siemens.
See below for a description of GeoThermal³.
Mark Westcott
1. You do not need to be an engineer to understand the problem with the Siemens Cogeneration plant at the Westmount Nursing Home. The Siemen’s Annual Performance Report shows energy savings for year one $299,950. Niagara Mohawk records reflect before the Cogen was built in 2004 energy cost of $269,052. How can you save more in energy than you spent the year before? To read my prior newsletter on this topic, please go to http://www.westcottupny.com/wp-content/uploads/2012/12/Stinks-to-High-Heaven1.pdf
2. Source: Siemen’s GeoThermal Pro Forma: http://www.westcottupny.com/wp-content/uploads/2014/04/GeoThermal-ProForma.pdf
3. What is GeoThermal and how does it work?
Geothermal systems take the heat or cool from ground water. Ground water is 50 to 55 Fahrenheit. This does not seem very warm or cool, but it works … as long as the conditions are right. Pipes carry water from the ground to an energy pump that extracts the energy from the water. In theory generating Air Conditioning from 50° water is far more efficient than from 90° air. Generating heat from 50° water is more efficient than from 20° air. At least that’s the theory.
In my research one factor that may be at play is the location of the Warren County GeoThermal plant. My understanding is there needs to be the right natural environment for the extraction of GeoThermal energy. There is a need for what is called a “GeoThermal reserve.” To produce heat this can be described as an area of hot water trapped in porous or semi-porous rock. Piping is needed to withdraw this hot water.