The real issue with performance contracting

In the past I've touched on the reason why the Council majority is opposed to performance contracting. And while reasonable people could conclude that the majority opposes energy conservation, IMO the primary reason they:

1) oppose performance contracting and
2) fail to create a comprehensive energy action plan

is because their beloved ratings agencies have informed them that the value of such contracts would be viewed as debt... even though no debt would be incurred with a comprehensive energy action plan engaged via a performance contract. And that may negatively impact their much bally-hooed improved bond rating.

As staff explained in August:

"The idea of having savings pay down the debt (on a performance contract) has enormous potential, but it's still viewed as debt on the books." (NHR, by Luther Turmelle)

And recall... back in December '06 the Town got a "rating upgrade" from A to AA. That upgrade was trumpeted to the public:

The most immediate benefit of this upgrade will be a reduction in the Town’s interest rate on borrowings

Then in November '07, the Council majority ran on that bond rating upgrade (see the second bullet point):

So for me, I view the failure to:

1) seriously consider performance contracting and
2) create a comprehensive energy action plan

as a result of very poor judgment that (without putting pen to paper) favors debt (and interest expense) minimization over energy conservation. If we would simply put pen to paper, I believe the "business case" would be made easily. Though that remains to be seen, because the majority opposes putting pen to paper as it runs the risk of making the case for energy conservation... and negatively impacting the bond rating.

So while reasonable people could conclude that the majority is simply opposed to energy conservation because of a desire to continue wasting energy and consuming fossil fuels unnecessarily... I don't fall in that camp.

Tim White