Plumas County has an aging infrastructure begging for repairs, replacement and overall revitalization. In 2023, the Plumas County Board of Supervisors received a proposal from ENGIE Services U.S. that looked like a sure way to address obsolete energy-zapping equipment and introduce LED bulbs, solar panels and other energy-related improvements – all at a savings of $4.8 million over 30 years.
Less than a year after unanimously approving a $10.9 million contract with ENGIE, Plumas County officials are no longer so sure. At their March 4 meeting, the supervisors called for a review of the entire project, including the contract.
“It’s not just ‘can we cancel?’ It’s what are the costs that have been incurred so far. And what are our obligations regarding financing?” said Supervisor Mimi Hall.
“Why did we do this?”
Mimi Hall, Plumas County supervisor
Hall and Plumas County Board of Supervisors Chairman Supervisor Kevin Goss raised questions about the effect of the contract on county staff as well as the fiscal impact of costs outside the contract on the county general fund. They submitted to the board a five-page memo summarizing the history of the county’s contract with ENGIE, which describes itself as “a global player in low-carbon energy and services.”
The multiphase, multiyear project is the largest the county has approved since the 2004 construction of the courthouse annex, Hall said. The supervisors’ approval of the contract and the financial package took place at several different board meetings. None of them, however, included the public hearing required by state law, Hall said.
“Why did we do this?” asked Hall, who was not a county supervisor at the time of the approvals. “Do we have the ability… to reassess what we’ve obligated ourselves for and reduce our contract? Make changes?”
Two years of negotiations with ENGIE
County officials have been negotiating with ENGIE since January 2023, when County Administrative Officer Debra Lucero presented the project as a way to finance what she called “the county’s future.” Lucero listed specific costs ENGIE would fund for various energy-related equipment, including:
- $4.6 million for HVAC replacements at 13 facilities
- $2.9 million for backup generators at 13 county facilities
- $2 million for installation of solar carport structures at the courthouse annex
- $960,000 for LED lighting upgrades at 16 facilities
After ENGIE officials assessed 45 county facilities for energy inefficiencies, they proposed the comprehensive project, touting savings as much as $4.8 million over 30 years.
The supervisors voted unanimously March 19, 2024 to approve the contract. They waited until August to discuss funding; final funding approval didn’t come until Dec. 17, 2024.
Issues with LED, generator replacements
ENGIE started its energy upgrades in January by replacing lights in many of the 45 county-owned buildings. Workers are currently in the annex building at night, installing sensors for LED lights that turn on when they detect motion, said Nick Collin, Plumas County facilities director.
Hall questioned the nearly $1 million cost of the LED upgrades. “I would rather have given that to our facility services department so they could work building by building over the course of the year to replace the lightning,” she said.
Collin also questioned plans for a project installing carport solar panels over the annex parking area. But he focused on the plan to replace generators and heating, ventilation and air conditioning systems countywide. The ENGIE contract calls for installation of backup generators at 13 county buildings for nearly $3 million. It also projects replacement of HVAC units at 13 facilities for $4.6 million. Two HVACs failed before the contract began so the supervisors approved $24,000 to purchase both replacements. ENGIE’s total cost for three HVAC units was $129,000, Collin said.
“I have some concerns about what’s actually costing the county to get this stuff done,” said Collin.
He also raised concerns about ENGIE’s selection of generators that will run for only 24 hours. When county buildings need generators for power outages, they generally need them for at least 96 hours, Collin said. And he questioned installing a generator at the county museum to enable its use as a shelter during a major power outage.
“There are no facilities at the museum to take care of a bunch of people in an emergency,” said Collin.
“In my mind, there was poor planning with the generators,” said Collin. One generator installed at a county airport has been connected to the wrong building, he added.
Among the benefits cited in ENGIE documents is a commitment to stimulate the local economy and provide local jobs. “We were pretty much guaranteed local contractors were going to be used for a lot of this work,” said Supervisor Jeff Engel.
Collin said all of ENGIE’s LED and generator replacement work has been done by contractors from outside Plumas County.
ENGIE officials did not respond to email and telephone requests for comment on county officials’ statements about the project.
Is the financing package more costly than the guaranteed savings?
Financing the ENGIE project was complicated and controversial, but was ultimately approved 4-1, with Engel casting the lone no vote. The supervisors’ Dec. 17, 2024 decision committed $1 million in general funds for the project, approved in their 2024-2025 budget. They financed the remaining $9.9 million in two steps: an equipment lease-purchase agreement for $8.45 million at 4.58% interest; and a lease-leaseback agreement for the county animal shelter for $1.45 million at 4.5% interest. The total cost of financing for both agreements is $5.3 million over 20 years, $500,000 above the projected $4.8 million in energy savings over 30 years.
“We don’t have the cash in pocket to give a million dollars to facilities. That’s why they’ve not been repaired for a decade or more.”
Tom McGowan, Plumas County supervisor
The ENGIE project offered a solution to the county’s failing infrastructure in spite of its financial difficulties, said Supervisor Tom McGowan. ENGIE provided the funds for the upgrades the county could not pay for itself, he said.
“We don’t have the cash in pocket to give a million dollars to facilities. That’s why they’ve not been repaired for a decade or more,” he said.
But the details are fraught with uncertainties. The contract does not include the cost of contractual exclusions, which hold the county responsible for costs outside of direct repairs and installation. Monitoring and managing the contract is time consuming for Collin as well as other department heads, including Plumas County Tax Collector Julie White and Auditor Martee Graham. These and other ENGIE-related costs could impact the county general fund in ways that weren’t anticipated or accounted for, the Hall and Goss memo stated.
Plumas County has already entered into the ENGIE agreement, said Hall, but it poses fundamental challenges for the supervisors. “How do we look out for the public good? How do we be good stewards – financial stewards – of public dollars?” Hall asked,
Janet Crain, of Meadow Valley, summarized her view of the ENGIE contract: “Basically, I want to say this sounds like a boondoggle.”
Several county officials raised their own questions.
Plumas County Sheriff Todd Johns: “Not to beat a dead horse, but I brought up many of these topics that we covered today before we agreed on doing this contract. I think the longer you wait, the longer you’re going to be stuck in a contract that you may or may not be able to change.”
Auditor Martee Graham: “I myself voiced concerns over the things that we were spending money on… and what we were financing.” She said a breakdown of the total costs was changed 10 minutes before a meeting, with a new breakdown the result of “an internal meeting.”
Tax Collector Julie White: “We’re paying a debt service at the higher rate, when we could have found a different debt service to manage these projects.”
Staff directed to review ENGIE contract
The supervisors’ nearly hour-long discussion left significant questions hanging over the ENGIE project. Are there ways for county officials to look into the contract agreement, “things that we can remove from the contract?” asked Hall.
The supervisors agreed to look for answers. They directed Collin, the facilities director, to review the entire ENGIE project list and return March 18 with an update. They also directed Interim County Counsel Josh Brechtel to review the ENGIE contract and explore legal options. He is expected to have recommendations at the March 18 meeting.
The contract includes a clause that allows the county to cancel it “for convenience,” said Hall. If invoked, the county would have to pay ENGIE any costs that they have incurred up to that point.
When the ENGIE project was approved, McGowan noted that county officials, including the supervisors, agreed that the county had a large infrastructure backlog and did not have the funds to replace equipment. Replacements were limited to emergency fixes when infrastructure failed.
“It was out of balance. And based on the information that we got, this seemed like the best solution,” McGowan said. “Now, all these are very valid questions that we need to revisit and make sure that it was the best decision at the time. Hopefully we can make some modifications.”
Goss said if the generator and other equipment costs are as disparate as Collin and Hall described, “that’s a serious problem, and I don’t want to be a part of a serious problem like that.”
Shannon Lawson, a Quincy resident, was one of several citizens who requested an update of the ENGIE project at the March 4 meeting. “It’s good we’re going to at least try to reassess what’s going on,” she said.
Editor’s note: This story was changed to correct inaccuracies in reporting equipment replacements. The Plumas Sun regrets the error.
