2/27/16 Schools look at efficiency upgrades
Schools look at efficiency upgrades
By Isaac Groves, The Times-News 2/27/16
Reprinted with permission.
Cost-cutting upgrades to schools could pay for themselves over 15 to 20 years with lower energy usage.
The district would end up spending about the same amount of money over those 15 to 20 years since what it saved in electric bills would go to pay off loans for the new equipment.
“It’s a bank loan without issuing bonds or raising taxes for the district,” said Tim Gasper, performance engineer with Brady Energy Services. “You then can afford to buy new equipment and systems.”
“Performance contracting” allows an institution like a school or a school system to borrow money for things like new lighting, windows or heating and cooling systems against future energy savings. The Alamance-Burlington Board of Education has been looking at the idea as a way to pay for a potentially long list of upgrades, including efficient LED light fixtures, as the district and county comes up with a comprehensive list of school needs and considers building two new schools.
The board asked Brady Trane to look more closely at several schools in the Alamance-Burlington School System to get a better estimate of what upgrades they need and how much ABSS could cut its energy usage with them.
The contracts guarantee that the improvements cut the kilowatt hours schools use, not how much the district pays for power, since electricity prices are so volatile, said board attorney Rod Malone with Raleigh firm Tharrington Smith.
“It’s not like you get a pot of money to pay back this loan,” Malone said.
That means the Alamance County Board of Commissioners would need to agree to keep funding ABSS as though its consumption was not changing.
“The county commissioners have to agree not to cut utility funding because, if they cut utility funding, there’s your source of funds, so there is a resolution required,” Gasper said.
If the district goes forward, Brady would bid on the project, Gasper said, and so would at least one other qualified contractor, or the process would have to start over, according to state law. About 15 other companies are prequalified to offer the services in North Carolina, according to the N.C. Department of Environmental Quality.
BOARD MEMBER PATSY Simpson wanted to make sure this was a different arrangement than the district used to have with Cenergistic. Under that type of contract, districts hire an energy manager who basically goes into schools to make sure things are turned off when not in use.
The manager’s pay comes from savings, and the district and service company typically split any other savings, Gasper said. Superintendent Bill Harrison said Cenergistic relied on projections to determine what it was saving the district.
Simpson called those savings “phantom money.”
“We continued to write checks, but we never saw anything coming in,” Simpson said.
Malone cautioned that performance contracting is not a simple money-saving proposition. If energy prices rise, which is likely, the bills will be larger, but less than they would have been with less-efficient lighting and heating systems, Malone said.
“So there is some ‘phantom money’ in all these concepts,” Malone said. “In fact, your power bill will go up over time.”