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All energy-service company contracts, where money saved on energy and operational costs would be used to pay for large renovation projects, will require Lincoln City Council approval.

Under an early version of a proposal about the contracts, also known as ESCO contracts, the mayor could have approved the deals without council oversight.

But an amendment by Councilwoman Cyndi Lamm, approved Monday, would give the council final approval.

A plan to convert the city’s almost 27,000 streetlights to LEDs over an estimated 12 months would be the first ESCO project to come to the council, and is expected to be presented by late April. 

In Lincoln, the city owns the streetlights, but Lincoln Electric System maintains them.

Mayor Chris Beutler's administration is working on an ESCO contract for the city libraries, which could come to the council this summer. The administration is also considering an ESCO contract on Parks and Recreation Department facilities.

Under the ESCO concept, an energy-service company is hired to analyze an existing facility to understand current energy use and how it can be improved. The company helps select the best equipment in order to reduce energy, operations and maintenance costs. And it handles purchasing and installation of the improvements.

Energy-service companies also guarantee a price and specific energy and operational savings. If the city doesn't attain those savings, the energy-service company is on the hook.

Using those contracts positions Lincoln as a leader in renewable energy, reduces operational costs and relieves staff of trying to implement the projects, said Frank Uhlarik, the city's compliance and sustainability officer. 

City staff don’t have the expertise to do this kind of work, he said.

Councilman Jon Camp wanted the council to approve contracts in the early stage of the process, when the city first hires an ESCO to conduct a preliminary audit. That would give the council more control over what the work would include.

"I want to see the council involved in the early decisions," Camp said Monday. By the time the final agreement for the work is negotiated, the council has little ability to make changes, he has said. 

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That proposal failed to get council support, though Lamm said the council could consider a proposal to weigh in earlier in the process at a later date.

And Councilwoman Jane Raybould warned that the council expects to look at all the pieces of a large project and might decide not to do everything.

The projects may be bundled, but Raybould said she wanted those who bid on the project to understand the council may decouple those elements. 

At an earlier public hearing, Uhlarik said bundling allows the city to use savings from simpler projects — such as replacing fluorescent lights with LEDs — to help fund other projects that might not have short payback periods. 

The approved policy allows the city to enter into ESCO contracts when the payback period is not more than 15 years and the useful life is at least 20 years.  

ESCOs are allowed under state and federal law, and are being used by private and public sectors nationwide, Uhlarik has said. 

Reach the writer at 402-473-7250 or nhicks@journalstar.com

On Twitter @LJSNancyHicks.

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Reporter

Nancy Hicks reports on Lincoln city government, but she’s been following the leaders of local and state government for more than 40 years.

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