This article originally was published by District Administration on December 19, 2018. It was written by DA Custom Publishing and appears below in its original entirety including the image.
This web seminar described how a cash-strapped district uncovered funding and became nationally recognized in five years. Administrators from Madison County Schools in Alabama shared how they utilized an energy savings performance contract project to provide over $32 million for much-needed initiatives.
Schneider helped us establish a way to tackle that, and also gave us a long-term partnership for all of our campuses to make sure they’re running at a peak level. We’ve reduced our electricity bill by 40 percent and were able to fund all of the improvements. We’re going to be saving $40 million in our district over 20 years.
There are three phases. We wanted to modernize what we had, sustain what we had over the long term, and increase school health and safety.
Moving forward from 2013 with Schneider Electric, we found a funding mechanism that enabled us to use utility cost savings and enabled us to reinvest and leverage $32 million for improvements district-wide.
The multiple funding strings would not have been possible without Schneider’s connections and expertise. They provided innovative funding options with an energy performance contract that had specific goals and strategies. We were able to secure millions of dollars in federally qualified energy conservation bonds, and we received a $500,000 loan at zero percent interest from the Alabama Department of Economic and Community Affairs. We also received $500,000 in rebates from one of our local utility companies.
I was introduced to underwriters — through Schneider — with expertise in finding the best rates for tax-exempt lease-purchase agreements. We then signed an agreement for over $8 million to finance several improvements in the project’s final phase. And the annual utility cost savings covered the principle and interest on all this debt.
So how do you get there? First, clarify the expectations with whatever company you choose to partner with. Consider the savings, the implementation timeline, and the overall impact. Next, you need adequate support training and follow-up. At Schneider, we, of course, believe new technology is wonderful, but you have to be able to know how to use that technology — how to effectively operate and maintain systems for the long term.
Savings verification should be ongoing engagement with the school district and the energy services company to identify the transparency and savings. Let’s make sure that we’re getting true dollar savings, and then align that with the mission and vision of your organization. These solutions should go beyond chillers and light bulbs. They should advance the overall direction of your district and create meaningful outcomes that you can share with your community.