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Madison Lake City Hall 

Madison Lake City Hall is achieving significant energy and cost savings after upgrading its heating and cooling systems.

Little Madison Lake achieves big energy savings 

City Hall, community center, fire station get much-needed energy overhaul

MADISON LAKE — Like so many small communities throughout Minnesota, the south central town of Madison Lake, population 1,000, houses its government functions in a building that requires regular maintenance and repairs. Built in 1981, the 5,600-square-foot building is home to City Hall, a busy community center, and the community fire station.

The building’s heating and cooling equipment had been serving the city reliably—though inefficiently—for nearly 30 years. The existing furnaces were less than 80 percent efficient when newly installed, and with age they were operating even less efficiently. One furnace had a gas leak and required frequent service. Seeing an opportunity for financing, the city’s administrator, Kelly Steele, took advantage of a federal stimulus grant and utility rebate to replace the aging equipment. The result: big energy savings, cost savings, and a more reliable, comfortable, and attractive building.

The city hired local contractor Prange’s Heating and Air Conditioning to replace the aging furnaces and central air-conditioning units with high-efficient, ENERGY STAR® equipment. The three existing furnaces were replaced with two more appropriately sized high-efficiency furnaces. The low-efficient (9.0 SEER) air conditioner units were replaced by high-efficient (13.0 SEER) units. The installation was completed in June 2010.

The sealed combustion furnaces and upgraded AC equipment have made “a huge difference in our building’s comfort and safety,” said Steele. “Our building’s air quality has improved and it is a much more inviting building to conduct business and host events.”

Gas savings exceed expectations

Before the heating and cooling upgrades, the building’s annual gas and electric bill was about $6,000. It was not a large part of the city’s budget—less than two percent of the general operating fund—said Steele. Yet the project’s impressive 31 percent reduction in natural gas consumption—about twice what was expected—has produced a significant savings of $820 per year (see Figure 1). Over the estimated 25- to 30-year life of the furnaces, that’s a savings of more than $20,000. “It makes more money available for other vital city needs,” said Steele  

ML normalized monthly 

Figure 1. The chart above, available in Minnesota B3 Benchmarking, shows the weather-normalized projected natural gas use as a dashed line and the actual use as the red bars. The difference between the projected and actual gas use demonstrates a decrease of 31 percent from 2009 to 2012.Weather-normalized values provide the most accurate measure of the energy project and compare building performance from year to year independent of weather variations.

Total cost of the project was $9,350. A grant from the Minnesota Department of Commerce (via funding from the American Recovery and Reinvestment Act) paid $8,950 and a rebate of $400 from the gas and electric provider (Xcel Energy) covered the rest. Madison Lake paid nothing out of pocket, but Steele agrees that the project would have been a good investment if the city had paid for the improvements itself. The project will pay for itself in gas energy savings alone after about 12 years.

B3 Benchmarking documents savings

The city has tracked its energy consumption since December 2007 in B3 Benchmarking, the building energy management tool for public buildings in Minnesota (see below for more on B3 Benchmarking). The building’s current B3 benchmark ratio is 65 percent, meaning it uses about one-third less energy than if it were a new building built to current energy codes. Maintaining those energy records “is not difficult at all,” said Steele. “When each month’s energy bill arrives, my assistant takes a couple of minutes to update the B3 database.”

Steele reports that the Madison Lake City Council “was very pleased to see the savings” after she presented a B3 energy-use chart at a recent council meeting.

Upgrading Madison Lake’s heating and cooling systems proved to be a wise venture. “This was a win-win-win project,” said Steele. “The city will save energy and reduce its carbon footprint, we will save money for years to come, and we put one of our own local contractors to work on the project. It doesn’t get any better than that.”

Resources for public building projects

Public institutions seeking energy efficiency improvements should consult with their local gas or electric utility. Utility representatives can help assess opportunities for efficiency and identify what rebates may help finance projects. All utilities in the state are mandated to achieve an annual energy savings of 1.5 percent of annual retail energy sales, so it is in their best interest to help customers increase energy efficiency. 

In addition, the Minnesota Department of Commerce, Division of Energy Resources (DER) provides support to local government units, state agencies, school districts, and institutions of higher learning that are seeking energy efficiency and renewable energy measures. Contact DER at to discuss which of its energy efficiency programs can be of help.

The U.S. Department of Energy’s Building Technologies Office also provides helpful resources for building retrofits, including “The Advanced Energy Retrofit Guide for Office Buildings.” For more on energy efficiency, contact the DER Information Center at or 800-657-3710.

B3 Benchmarking—Buildings, Benchmarking and Beyond

Minnesota B3 Benchmarking is an energy tracking system for public buildings in Minnesota, including state, local government, and public school buildings. It provides the tools to manage your buildings, improve your building portfolio efficiently, and monitor the improvements.

Benchmarking simply means that the energy consumption for a particular building is compared to the energy it should be using. Identifying those buildings that are using more energy than they should is extremely important because these are the buildings that will likely have the most cost-savings potential.  The B3 tool is provided by the Minnesota Department of Administration and the Minnesota Department of Commerce, with funding from all utilities in the state supporting the effort.

To find out if your building is already in the database or to add your building, go to Minnesota Benchmarking and click on “Contact Us.”   For information on how to view your building’s energy data, contact the Minnesota Department of Commerce, Division of Energy Resources at or 800-657-3710.