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September 2008   October 2008   December 2008   January 2009  



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Case Studies

 
Performance Contracts

Over recent weeks, I have said time and time again that I believe these difficult economic times provide our state with a unique opportunity: reducing the size of state government. To successfully navigate through these difficult economic times we, as state leaders, now have to ask ourselves: "How can I streamline this agency or department and make them more efficient?"

Below is the first installment of what I believe can be a refreshing dialogue on what we can do to help run government more efficiently.

Cutwaste.org Government Savings Initiative: Performance Contracts

Performance contracts represent one of the most effective tools the private sector has devised for increasing the energy efficiency of buildings and providing energy at much lower costs.

Often, state agencies are located in buildings that are old and in desperate need of repairs, upgrades, and new construction that could dramatically lower annual operational costs, saving money immediately. However, agencies are often short funds to make these changes and incur energy costs that are far too high year after year. As a result, the taxpayers pay millions in unneeded energy expenses caused by old systems, inefficient lighting, leaky pipes and other issues. Most other states have been able to solve this problem by bringing in outside contractors who do the energy saving upgrade work at no cost to the state, and are paid only from the funds saved as a result of the changes. This is a great solution because it saves energy, uprgrades state buildings and doesn’t cost the state a dime. The contractor literally agrees to write a check to the state if costs of a project are greater than the amount of money it saves.

For example, Johnson Controls recently used performance contracts in South Carolina to build a clean energy biomass plant that generates steam and electricity (enough to power 800 to 1000 homes) using only bark and other waste from a nearby paper plant. The new facility was built on a performance contract and is predicted to save the State of South Carolina up to $2 million per year when it is operational. Plus, the environmentally sound facility just a few blocks from the statehouse includes a classroom inside the structure where students can learn about environmental energy.

Unfortunately, highly technical legal issues make it difficult for agencies in Georgia to sign multi-year performance contracts even as other states are taking advantage of them left and right.

Based on information received through cutwaste.org, our staff has begun reviewing this issue and looking for the best way to remove legal obstacles so that Georgia can begin using performance contracts to leverage private capital to save taxpayer dollars and protect our natural resources.


5 Comments:

This is an awesome idea. As an architect, I know that it takes a commitment to consider what type of light bulbs you buy and whether the thermostats are controlled and whether motion detectors can save power. Often, the bureacracy is focused on their mission and not these "little" things that can have significant savings - particularly statewide.

By Anonymous Eric Johnson, at September 25, 2008 8:28 AM  

And while we are cutting waste, let's commit to stop growing the size of government by creating additional layers and new authorities.

After all, more new government creates more expenses!

Great idea for a website, LG. When the audit and disclosure provisions of the amended SB300 are enacted, we will all see where our state tax money goes.

By Anonymous Jill Chambers, at September 25, 2008 1:02 PM  

The power of government is enormous and has the ability to impact our lives in either a positive or negative way.

All too often the apparatus that is supposed to promote the general welfare becomes the rope that hangs us.

Waste, fraud and abuse within government is rampant at all levels of government, local, state and federal. I hope we are serious about rooting out these abuses of the public trust.

I am certainly prepared to lob my own bricks at some of our local and state abuses. Hopefully, at some point we will become a government of the people.

By Blogger Maurice Atkinson, at September 25, 2008 10:11 PM  

"The bureaucracy is expanding to meet the needs of the expanding bureaucracy." -- Unknown

IAMLUSK.com

By Anonymous LUSK, at October 3, 2008 6:00 PM  

Mr. LG while it is important to cut waste, it is also important not to forget what made the Great State of Georgia GREAT. The ability to bring new businesses to Georgia. That will keep our citizens employed in Ga.
New Businesses are looking for Land (no Problem) Tax Breaks(Can be done) and Good Roads and infrastructure( this is a PROBLEM).
YOU seem to want to cut the Ga. Department of Transportation to the bone. Thus not having a good road system. We need good roads to attract good businessesto our state.
A Concerned Citizen

By Anonymous Anonymous, at January 12, 2009 3:00 PM  

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