Performance Contract Enables School to Finance Upgrades through $1.7 Million in Guaranteed Annual Savings on Utility Bills and Other Energy Expenses
MINNEAPOLIS, July 27, 2006 - Honeywell (NYSE: HON) today announced a 15-year, $18.7-million energy savings and building modernization project with West Chester University (WCU) of Pennsylvania, located in the Philadelphia area and part of the Pennsylvania State System of Higher Education.
The project, which spans nearly 60 buildings on the 402-acre campus, includes infrastructure upgrades, such as lighting, heating, ventilation and cooling (HVAC) equipment; energy and water conservation measures; and a control system to centralize and optimize energy management across the university. As a result, Honeywell will help WCU offset the impact of rising energy costs and tightened budgets while reducing maintenance costs and improving comfort for more than 14,000 students, faculty and staff on campus. Adding a compelling environmental outcome, the project also will decrease greenhouse gas emissions.
WCU will finance the work from the energy and operational savings generated by the project. Those savings — expected to be approximately $1.7 million per year over 15 years, or 20 percent of the school's current energy bill — are guaranteed by Honeywell under a performance contract with the university. This ensures the upgrades will not impact capital budgets or require additional taxpayer dollars.
"We were facing very high energy costs even before the recent increases in world prices," said Bruce Wilson, energy manager for WCU. "We realized we had to get those costs under control before they had an impact on student fees. The most impressive changes at first will come from lighting improvements, which will save electricity, and provide better color and output. We can cut the wattage of many fixtures by up to two thirds, for example."
The project started when Honeywell completed an energy audit to identify areas where upgrades and improvements would have the greatest impact on energy efficiency. Once the audit was complete, Honeywell and WCU officials jointly planned the project, choosing from a broad menu of energy conservation measures.
"Centralized energy controls will be a major step up for us," said Greg Cuprak, interim WCU executive director of facilities management. "From one computer work station we'll be able to monitor and control temperatures in dozens of buildings. We'll know which facilities — such as dorms or food services — are exceeding expected demand. And we'll use that information to take action, whether it's talking to people about their thermostat settings, or finding and making needed repairs a lot more quickly than we can now."
Besides lighting replacements and centralized controls, the university chose to replace antiquated HVAC equipment in numerous buildings; cool and dehumidify the indoor swimming pool area, reducing corrosion as well as enhancing comfort; replace old bathroom fixtures with modern, water-saving models; and add solar film to windows in four facilities to reduce harmful ultraviolet rays, decrease solar heat gain and improve security by making it more difficult to see into the buildings. In addition, Honeywell will install numerous meters to verify energy use and provide maintenance on select equipment.
The project will have a significant environmental impact as well, decreasing carbon dioxide emissions by an estimated 26 million pounds per year. According to figures from the U.S. Environmental Protection Agency, this is equivalent to removing almost 2,600 cars from the road or planting 3,500 acres of trees.
Design engineering began in May and will be completed by the end of October. Honeywell Building Solutions SES — formerly Sempra Energy Services — is managing the project. This is the first major contract following the acquisition from Sempra Generation earlier this year, and it's Honeywell's first work with the university.
"Colleges and universities across the country are caught in a vicious operating cost squeeze, caused in large part by soaring energy prices," said Joe Puishys, president of Honeywell Building Solutions. "Honeywell's energy performance contracts help them cut energy use sharply, improve the comfort and efficiency of their buildings and clear up deferred maintenance lists — all without having to tap current budgets, or raise tuition and fees."
Honeywell International is a $30 billion diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Based in Morris Township, N.J., Honeywell's shares are traded on the New York, London, Chicago and Pacific Stock Exchanges. It is one of the 30 stocks that make up the Dow Jones Industrial Average and is also a component of the Standard & Poor's 500 Index. For additional information, please visit www.honeywell.com. Honeywell Building Solutions is part of the Honeywell Automation and Control Solutions business group, a global leader in providing product and service solutions that improve efficiency and profitability, support regulatory compliance, and maintain safe, comfortable environments in homes, buildings and industry. For more information about Building Solutions, access www.honeywell.com/buildingsolutions.
# # #
This release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements are based on management's assumptions and assessments in light of past experience and trends, current conditions, expected future developments and other relevant factors. They are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by our forward-looking statements. Our forward-looking statements are also subject to risks and uncertainties, which can affect our performance in both the near- and long-term. We identify the principal risks and uncertainties that affect our performance in our Form 10-K and other filings with the Securities and Exchange Commission.