Detroit Federal Buildings In 10-Year Heat Deal

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Two iconic downtown Detroit federal buildings will be heated for the next decade with reliable steam from renewable energy municipal waste sources in a $9 million, environmentally friendly deal signed by the federal General Services Administration with Detroit Thermal LLC.

Detroit Thermal owns and operates the district energy steam system along the Woodward Corridor from the Riverfront to Midtown and New Center.

The federal contract brings Detroit Thermal’s score card to more than $120 million in business signed in the last two years.

“Detroit Thermal steam is very reliable,” GSA contract specialist Miranda Webster said. “It is a good product at a good price. We are pleased that Detroit Thermal includes renewable energy sources in the energy it uses for steam generation.” 

Detroit Thermal’s future got a big boost last fall when it was purchased by the newly formed Detroit Renewable Energy LLC in a $50 million deal that included Detroit Renewable Power LLC and major upgrades to DRP’s energy-from-waste plant that turns municipal waste into steam and electrical energy.

“The two landmark federal buildings total about two million square feet and represent two very differing architectural styles and times, but share in a common federal commitment to go green with reduced use of fossil fuels, reduced carbon footprint, reduced waste trucked to landfills, the added reliability of a district energy system and the comfort of knowing that our team is always on call 24-7,” Detroit Thermal president Vic Koppang said in announcing the agreement.

The 27-story McNamara Federal Building, completed in 1976, was constructed to be on the district energy system and features the Brutalist style of reinforced concrete with repeated motifs.

The Theodore Levin U.S. Courthouse was constructed from 1932 to 1934 in the Art Deco and neoclassical styles, and includes a courtroom from the 1890s incorporated into the structure.  It originally used on-site boilers, but was converted to the district energy system early in its history.

The $9 million federal commitment comes on the heels of new contracts last year with Blue Cross Blue Shield of Michigan and Wayne County. BCBSM signed a ten-year contract for its three-building campus downtown, and Wayne County tied seven buildings together on the steam system in a deal estimated at $8 million.

Detroit Thermal was awarded nearly $100 million in 2009, including an $80 million, 10-year agreement with the Detroit Medical Center.  Vanguard Health Systems purchased the DMC at the end of last year for $850 million and has begun a $300 million expansion program.

The Detroit district energy steam system was started in 1903 and serves 145 buildings with more than 30 million square feet along its extensive distribution system, including buried steam pipes and four miles of tunnels below downtown streets, some as deep as an eight story building is high.

“District energy is not a new concept, but we’re seeing renewed interest as people recognize it’s a clean and cost-efficient way to heat and cool their buildings,” said Koppang.  “We’ve invested significantly in Detroit, and it’s paid off.  We have a great system and more than $120 million in new customer commitments, and the interest in our service keeps growing.  The future looks great to us.”

More at www.detroitthermal.com or www.districtenergy.org.

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