Smithtown hopes energy upgrades to town buildings will save $1.1 million over 20 years

Smithtown officials said an engineering conglomerate will start work this month on $1.1 million worth of energy efficiency upgrades to town buildings.

The upgrades should save that much or more by cutting town energy costs over the next 20 years, officials said; if they don't, the company doing the work will make up the difference.

The deal, known as a performance contract, is the first of its kind for Smithtown, town officials said, though it is common in the 40-year-old energy service company market.

"It’s good for the environment and it’s great for taxpayers if we can start saving money, especially now with the price of fuel," Councilman Thomas Lohmann told Newsday.

Smithtown's agreement with contractor Siemens calls for work over the next two years on 10 town buildings, including the town senior center, highway department headquarters and municipal services facility, officials said. Workers will install hundreds of LED light fixtures with motion sensors to darken unused offices. They will replace 18 boilers and furnaces with new equipment connected to smart thermostats to automatically adjust temperature. They will seal vents, windows and doors in aging town buildings, some of which date to the 1960s.

Town officials also evaluated five town facilities including Town Hall. Officials are considering adding a new wing to that building to consolidate some offices now spread out around downtown; a second round of upgrades could coincide with that work, Lohmann said, without giving a timeline.

Smithtown budgets about $400,000 per year for electrical service and $140,000 for heat. The town spends tens of thousands more for heat and electricity at its historic properties. How much the town might save will depend on factors including utility costs, financing rates and the day-to-day actions of town staffers, such as opening windows or fiddling with thermostats, said Louis Necroto, the town’s budget officer, who worked on the deal.

"A lot of assumptions are being made," he said. "The performance guarantee takes the edge off any kind of error in our estimates."

The town will fund the improvements with a bond issue. The town's investment and projected cost savings are smaller than typical for the industry, according to data from Lawrence Berkeley National Laboratory in California, but Necroto said the deal would help the town make needed capital improvements. And the energy savings will add up: "Every minute of every day that we don’t do it, there’s money we will not recoup," he said.

State and local government projects such as Smithtown’s account for about a quarter of the energy service company market, which Timothy Unruh, executive director of National Association of Energy Service Companies, a trade group, estimated at $7 billion. In 2018, according to the Berkeley lab, the mid-Atlantic region including New York State accounted for more than $1 billion in industry revenue.

Those municipal projects typically produce about 20% energy savings for a cost savings of about $.85 per square foot, Unruh said, citing research from the lab.

Smithtown has laid out capital in exchange for long-term energy savings before — and it did so without the benefit of a guarantee, Necroto said.

In 2010, the town was one of the first on Long Island to start replacing 12,000 high-pressure sodium streetlights with light-emitting diodes. The project cost $4.5 million. It cut the town's annual electric bill by $520,000.