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Posted April 26, 2013 | comments Leave a comment

Warren County schools consider energy performance contracting

By Kim Walter

FRONT ROYAL -- After receiving a presentation on energy performance contracting at its Thursday evening work session, the Warren County School Board decided to take the first step toward fixing issues in the county's older elementary schools.

Charles Barksdale, from the Virginia Department of Mines, Minerals and Energy, gave the presentation to School Board members, Superintendent Pamela McInnis, Assistant Superintendent for Administration Louis Justis, County Administrator Doug Stanley, and other school and county staff.

Barksdale said the goal of energy performance contracting is to help local governments and school systems find ways to improve their facilities without burdening agencies with additional debt.

The concept is simple enough -- there are sufficient energy savings within certain buildings that can pay for improvements like replacing boilers, installing new HVAC equipment, more efficient control systems, adding insulation and other replacements and upgrades.

The performance contracting would allow a school system, for example, to upgrade facilities in a "green" way, and pay for those upgrades by reallocating existing energy dollars.

Barksdale said that if Warren County schools chose to move forward, he would be there "shepherding" them through the whole process.

To date, about 20 different companies in the state have been qualified by the Virginia Department of Mines, Minerals and Energy as approved energy performance contractors specifically aimed toward working with school systems. It is up to the local school system to make the final selection for a contract.

Barksdale suggested that the list initially be narrowed down to four to seven companies, based on criteria such as distance from Warren County, prior experience with performance contracting and references from state school divisions with ongoing projects under performance contracting.

"Of course, it also makes sense to have fewer companies bidding for a contract," he added. "If they know they're only up against three other companies, then they figure their chances are pretty good at being selected, so they might put more time and work into the planning phases of the project."

The pre-selection process usually results in four firms being invited to submit a "back of the envelope" study for the buildings needing the most attention. Each company would walk through all the facilities and get additional information on energy and utility usage. They would then submit the "back of the envelope" report.

From there, the school system would narrow it down to one company. However, it is still possible for the division not to move forward, especially if they gather from the report that not much savings could be gathered from entering into a contract.

The selected company would conduct a technical audit, which the school system may have to pay for if a performance energy contract isn't signed.

Barksdale said the selected company must meet 85 percent of cost savings as outlined in its "back of the envelope" report. He said it is a written guarantee that the substantial savings are met, and if they aren't, the company is required to fix the problem.

"The whole process is made to protect the school division," he said. He also suggested that the school system consider third party financing, as the selected contractor wouldn't make any money off of it.

He added that the school system is currently paying utility companies money that could be used to upgrade the facilities, and those avoided energy costs could be bonded and guaranteed by an energy savings contractor.

"This has truly been a lifesaver for some of the school systems that have chosen to do this," Barksdale said. "I mean, if the contractor doesn't meet those savings, then the school system gets a check."

More than 30 school system have entered into a performance contract, and several more are currently in the process.

Justis said a kick-off meeting had already been set for May 21 for staff to meet with some pre-selected contractors. He added that a few representatives from the school board could attend, so that they are involved in the entire process.

"We just get a lot of comments saying that we're very good at building new facilities, but not so great at the upkeep and maintenance with our older buildings," he said.

McInnis agreed, and noted that the elementary schools would be the focus of a performance contract if they were to enter into one. She said it seemed like a good idea, especially since the division hasn't been able to secure many capital improvement funds for their aging buildings.

"Interest rates are low, construction costs are low because of the economy, and it sounds like you all could really benefit from the savings ... utility companies are just going to keep asking for more," Barksdale said. "It's the perfect storm to do this."

Contact staff writer Kim Walter at 540-465-5137 ext. 191, or kwalter@nvdaily.com


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