The Louisiana state government plans to partner with a private company in hopes of reducing energy usage and cost at state buildings.
LA Energy Partners, a joint venture between Bernhard Energy Solutions and Johnson Controls, would lease state-owned chiller systems downtown for 20 years. Commissioner of Administration Jay Dardenne said the systems currently service the Shaw Center for the Arts, but there is excess capacity LA Energy could sell.
In return, LA Energy would make capital improvements in state buildings that would reduce energy costs, Dardenne said. While the upgrades would cost the state $57 million, the deal would lead to a net savings for taxpayers of $18.6 million over the 20-year life of the agreement, according to an overview presented to legislators Tuesday.
Dardenne said several changes have been made to the agreement since legislators first reviewed it in June. For example, if legislators choose to back out at some point, the state would only be on the hook for the cost of any capital improvements already made by LA Energy.
Any changes to the agreement must be brought before the Joint Legislative Committee on the Budget for approval, Dardenne added. The joint venture is earning a little less than 5 percent profit on its investment under the current agreement, and profits would be capped at 8 percent if other state entities opt in, officials said.
Some state universities have expressed interest in participating. The Legislative Auditor has the right to periodically review the partnership to verify the state’s savings.
Bernhard Energy Solutions partnered with Johnson Controls at the request of Gov. John Bel Edwards’ administration after both firms submitted proposals.
Johnson Controls is based in Milwaukee and serves customers in 150 countries, the company says.
New Orleans-based Bernhard Energy Solutions is controlled by Bernhard Capital Partners, a private equity management firm founded by former Shaw Group CEO Jim Bernhard.
Bernhard is a former Democratic party official who has flirted with running for governor without ever launching a campaign.