Energy

LOUISIANA SCHOOLS TO SAVE MONEY WITH ENERGY RETROFITS

DNR says energy financing program a first

BATON ROUGE—A number of parish school systems across the state have recently been awarded energy and water conservation contracts aimed at sending their energy costs spiraling downward. Last month, the Louisiana Public Facilities Authority (LPFA) and the state Department of Natural Resources (DNR) received approval to finance seven energy and water conservation projects.

"These school systems are now on their way to saving hundreds of thousands of dollars each year in operating costs," said DNR Secretary Jack Caldwell. He said DNR's Energy Office will continue to work with schools, hospitals, and other public institutions to implement energy conservation measures to achieve long range energy savings. "This public-private initiative provides low-cost financing to publicly funded entities and is a first-of-its-kind (Energy Fund) program in the nation," explained Caldwell.

The State Bond Commission authorized the issuance of $20 million dollars in tax-exempt bonds at its September meeting. Proceeds will now be used to fund energy and water retrofits and performance contracts with the Allen Parish School System, Avoyelles Parish Schools, East Baton Rouge Parish School System, Evangeline Parish Police Jury, Iberville Parish School System, Natchitoches Parish School System, and St. Charles Parish School System.

According to DNR Energy Fund Manager Louis McArthur, these contracts are known as performance contracts in which building improvements are made with monies that would normally be spent on paying utility bills. In a cooperative endeavor agreement with the LPFA, DNR will work with Hibernia Bank, and Lehman Brothers to "pool" multiple projects together to achieve greater economies of scale. DNR will also reduce transaction costs by pledging Energy Fund dollars that are used to buy down the interest costs associated with the bond pool.

As the bonds are paid off, DNR will recycle the Energy Funds to be used in future projects. As projects are implemented, DNR will have projections on emissions reductions that could later be used to help the state with meeting the clean air standards set by the federal government. He said besides being a wise investment for our public schools, there are several major benefits of performance contracting.

McArthur outlined these five specific benefits of performance contracting:

1. Better Buildings: Updating or replacing equipment that is old or obsolete with newer, more efficient technologies will result in higher quality systems, fewer breakdowns, and reduced maintenance costs. When building occupants experience improved lighting, better air quality, and more comfortable room temperatures, increased comfort and more productivity are likely.

2. Improvements Without Sacrifice: Performance contracting can allow for immediate energy-efficient projects even if no funds are available. This means entities have the ability to make affordable improvements when faced with budget cuts or competing priorities. Performance contracting is a budget neutral vehicle that allows a comprehensive approach toward optimizing benefits.

3. Cost Savings: Newer systems and equipment will reduce energy costs. In addition to long-term maintenance costs, most buildings realize energy savings of 15 to 35 percent. Once the equipment is paid off, the public entity continues to reap savings without any additional costs.

4. Proven Technology and Expertise: Performance contracting is a widely accepted and reliable way to make energy improvements. Projects have already been awarded to energy service companies like TAC Americas, Trane, and Siemens Building Technologies, also known as ESCOs. These ESCOs and other similarly qualified contractors, follow industry standards, use proven energy saving technologies, and have excellent track records for satisfied customers.

5. One-Stop Shopping: Performance contracting offers a streamlined approach to facility improvements. With a single contract, multiple energy-efficient projects can be completed at one time.

McArthur encourages more schools and other public facilities in Louisiana to apply for this type of financial assistance program. Applicants are being evaluated now and workshops are being scheduled in November to help with all aspects of the process.

For more information on the DNR Energy Fund program, call 225-342-1399.

Editors: Contact DNR Public Information Office for additional information at 225-342-8955 or directly to DNR Energy Fund Manager Louis McArthur at 225-342-1399.