School district: Energy services contract exceeded expectations

A slew of energy conservation projects finished over the summer will save the Douglas County School District about $500,000 a year, according to Chief Financial Officer Holly Luna.

In February 2008, the Douglas County School Board approved an energy services performance contract to save money in energy and maintenance costs, and to take advantage of the funding options available in a time when district capital funding had reached an all-time low, Luna said.

The contract is an alternative way to fund major capital projects while remaining budget neutral as the projects are guaranteed to generate enough savings to pay for the entire cost of the project including financing, per Nevada law, Luna said.

She said the district learned that it could use a performance contract to generate sufficient savings to pay for the projects with zero up-front costs and a minimum guaranteed outcome. This also appeared to be an ideal option to precede the bond initiative of 2008 by performing much-needed infrastructure improvements without access to bond funding. Additionally, the contract allowed the district to become "greener" due to the energy efficiencies realized by the executed projects.

School board members selected Ameresco, Inc., the largest independent energy service provider in North America. Celtic Energy, Inc. was selected as the third party consultant as required by state law.

In May 2008, Ameresco produced an audit that included 10 proposed energy conservation measures to encompass all of the district's sites to improve energy use and provide operational and maintenance savings.

The cost of the final contract was a little more than $5 million and allowed the district to achieve such projects as district-wide lighting retrofits, installation of trash compactors, high-efficiency electrical transformers, a district-wide computer management program, retrofitting the energy management system and more.

Construction of the projects began in June 2008 and was completed by the end of the 2009 summer break. Once completed, the energy conservation measures implemented at each school site produced a better learning environment for the students, Luna said.

The last step in the contract was the measurement and verification process where Ameresco, Inc. is responsible to measure the actual savings of each measure to determine that the projected savings are indeed realized. The district was guaranteed to achieve a minimum of $450,000 in total annual savings from the 10 implemented measures in order to repay the financing interest and principal. When the final process was complete, the district's savings had exceeded the original estimated amount by more than $50,000.

For this year, the confirmed annual savings of the entire project were recorded at $513,093, proving that such a contract is a practical option for those public entities with restricted funds needing to make infrastructure improvements to their buildings, Luna said.

From a "green" perspective, these efficiencies could be compared to improving the district's carbon footprint by removing approximately 698 vehicles from the road, or powering the equivalent of 276 homes, Luna said.

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