Kyrene considers energy savings at 26 schools using lease-purchase payback

By Diana Whittle

2011-12theme_sKyrene officials are hoping to
get more bang for their energy
buck by adopting a program
designed to save money on utility costs
and reduce the amount of energy used
annually in the district’s 26 schools.
Following an Aug. 13 agreement
by the Kyrene Governing Board,
district planners will ask financial
management company Stifel to secure
the lowest interest rate possible for
the program, which would be part
of a proposed Energy Performance
Contract.
Depending on the project approved,
Kyrene would enter into a leasepurchase
contract for any needed
equipment.
Current interest rates are low, said
Jeremy Calles, chief financial officer
for Kyrene, so the timing is right to
consider an energy audit of the district.
In recent years, Kyrene was recognized
by the state for sponsoring a “Power
Challenge” to encourage lower energy
usage by students and teachers at
each school.
“But looking at an energy contract
goes beyond the behavioral changes
encouraged by a program like the
Power Challenge,” said Calles.
“The upgrades that we might
consider include energy-efficient
lighting or thermostats or sensors to
turn off lights. I also am interested
in a concept to install solar panels on
covered parking.”
In recent years, more school
districts have formed partnerships
with energy savings companies to
reduce their expenditures on utilities,
particularly since Arizona passed
legislation that states:
“The guaranteed energy costsavings
contract shall include a written
guarantee that the energy savings will
meet or exceed the costs.”
Said Calles: “This means if we have
an energy contractor who says will we
save $100,000 on an improvement,
and we realize only $80,000, the ESCo
must pay the school district for the
shortage.”
Nearby, in the Tempe Union
High School District, the governing
board approved a contract in 2011
with Chevron Energy Solutions Co.
for an energy audit and the related
development of a sustainability plan
to reduce energy consumption for the
seven schools in the district.
In addition, the district established
Living Laboratories in five schools to
offer students a greater understanding
of energy and environmental issues.
Calles explained that the
recommendation for Kyrene is to
consider the energy improvements,
which he noted would not come at
the expense of the $113 million left
in bond funding that is earmarked
for Maintenance & Operations
expenditures.
“To tie up any bond money for
an ESCo arrangement would be
disrespectful to the staff at the schools
who have waited a long time for
repairs such as replacement roofing,
air conditioning and plumbing,” said
Calles.
“If the Kyrene board does enter
into an Energy Performance Contract,
the savings would be returned to
the M&O budget and allow for other
improvements,” he said.
“With the projected payback from
the energy savings, it is actually
cheaper to use an ESCo as opposed to
bond money.”
However, this contract would
require Kyrene to approve a separate
lease-purchase loan for these energy
upgrades, which could total several
million dollars, according to Calles.
The proposed new loan proved to
be the sticking point for board member
Ross Robb, who cast the only no vote
to the energy proposal.
Robb expressed concerns that
residents might confuse funding
sources and mischaracterize the need
for an upcoming override election
while negotiating a loan for energy
upgrades.
Calles distributed proposals to
board members from three prospective
ESCos and asked them to review the
ideas carefully, so the discussion could
be continued at a future meeting.

Posted by on Aug 25 2013. Filed under Local News, Top Story. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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