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New audit questions state energy savings contract

Auditor Tom Wagner’s (R) office is taking aim at the Delaware Sustainable Energy Unit, saying it’s unclear whether an energy improvement project is actually netting the state any savings.



In 2011, the Delaware Sustainable Energy Unit sold $67.4 million in bonds to pay for upgrades for the Department of Corrections, Delaware State University and Legislative Mall buildings in Dover, among others.

For the Legislative Mall project alone, those improvements are supposed to net the state $10.8 million in energy savings over the next 20 years, but the audit shows those are strictly based off estimates.

No documents given to the auditor’s office definitively showed any savings despite already being implemented, according to Chief Administrative Auditor Kathleen Davies.

“In the end, it’s a stimulus package for particular vendors. They’re getting a pretty substantial markup on the business that they’re offering. Was it a good deal for the state? At the end of this report we conclude that it was not.”

SEU Executive Director Tony DePrima refutes the results of the audit, saying that auditor office staff members aren’t qualified to interpret the complex data.

Contractors who oversaw the individual projects are required to submit yearly reports outlining actual savings. A report regarding the Legislative Hall Project for 2014 shows a little under $10,000 in extra savings over projections.

DePrima says even says that the state is able to get a refund even if the estimates are off base.

“Even in these contracts, those savings that are calculated, if they’re not there as planned they are guaranteed. That is, the contractor has to pay back to the state any savings that were not realized,” he said.

However, the contract between the state and SEU says the debt “…will not be affected, modified or impaired by the occurrence of any event or circumstance, including termination of the [agreement] for any reason, including default or failure of [the contractor] fully to perform any of its obligations…”

The state will continue paying off the project through 2033.