It took until mid-2015 to resolve a 2014 Louisville Gas & Electric/Kentucky Utilities rate case, and it was only recently that a Kentucky Public Service Commission order finalized an aspect of the settlement affecting school districts the companies serve.
But for the 80 school districts that joined with KSBA and its School Energy Managers Project (SEMP) to intervene in the case, the wait was worth it.
As part of the settlement, effective July 1, the utilities set up a $1 million pot of Special Energy Project Funding to help public school districts pay for energy-efficiency upgrades. Plus, the utilities agreed to reduce their rates for schools they serve – a $500,000 reduction for LG&E and $1 million for KU. They also provided $1.45 million to pay half the salary of energy managers in their service areas for two years, proportionate to the number of LG&E/KU schools the energy managers serve.
It’s that $1 million pot and its long-term potential that’s creating excitement at SEMP, which designed the Special Energy Project Funding program for its use at the utilities’ request during the rate case proceedings.
“We’re kind of breaking new ground here,” said Jon Nipple, SEMP project manager, who is overseeing the program. “And if this works, this might be a model for future activity.”
The parameters
Each of the 80 districts in which the school board voted to support intervention in the rate case can receive a base sum consisting of $2,500 plus an additional amount based on the number of LG&E/KU-powered schools – “which in total more than pays their cost of participation in the rate intervention … in addition to saving them on rates,” Nipple noted.
The school boards in those districts can choose that base amount or they may choose to go for a matching option, in which the Special Energy Project will double their base award, provided that the district matches that larger amount.
Woodford County Schools Energy Manager Ralph Slone points to some of the 42 overhead lights in the Woodford County Middle School gym that the district hopes to replace with energy efficient LED models using matching funds through a new KSBA School Energy Managers Project program. The 460-watt incandescent bulbs “just chew the electricity” he said.
Nipple explained the reasoning KSBA-SEMP used in devising the allocation of the funds: “If they gave us a million dollars and we returned them a million dollars’ worth of energy-saving projects, that’s a good deal. But what if we could return to them $2 million worth of energy savings projects for that $1 million? So that’s why we gave some incentive on the match, so if this proves to be a really profitable thing for them, then maybe this is the kind of thing (utility companies) would consider doing in the future.”
A third aspect of the program kicks in if there are any funds left in the pot due to nonparticipation by eligible districts. Participating districts must let KSBA-SEMP know that they would like a share of any residual monies, which also will be matched.
The Woodford County school board was one of the first to submit a proposal for Special Energy Projects Funding, taking the matching route and also opting for residual matching if available. Superintendent Scott Hawkins said the work encompasses energy-efficient parking lot lighting and gym lighting.
“When you get the opportunity to get some matching funds, you can still get the same number of projects done for half or a little over,” he said. “It just made good sense for us to jump in and be part of that.”
The Special Energy Project holds an even greater promise for districts to leverage funds for their energy efficiency improvements, Nipple noted. Districts may consider taking the projected annual savings they reap from the improvements and apply it toward bonding more work through the KSBA/KISTA Energy Improvement Financing Program.
“Say, if a district does a $10,000 project, it may generate $3,000 a year in savings on its utility bills. That’s $3,000 a year that, for example, can be used to bond $14,000 in additional energy projects for five years or $27,000 for 10 years,” he explained.
Requirements
To apply for funding under any of the options, districts must provide detailed information about their proposed energy efficiency projects, including costs and projected savings. The Special Energy Project Funding can be applied only to those buildings served by LG&E/KU.
Participating districts will submit the bills for their projects to KSBA-SEMP, which reimburses them through the LG&E/KU project fund. The projects must be completed within two years.
Nipple said he expects district proposals to focus primarily on interior and exterior lighting and HVAC control systems.
Districts must submit all their paperwork for the program to KSBA-SEMP by Aug. 15. For more information, contact SEMP staff at 800-372-2962.
Board View: Energy levels increase
When Ambrose Wilson IV took his seat on the Woodford County school board, no one was talking about energy saving, ENERGY STAR or energy-efficient anything.
“I started back in the late 80s and energy management was never discussed,” he said.
It’s a different story these days. Woodford County was among the first districts to pass a board resolution and submit project plans for the Special Energy Project Funding for Public Schools through KSBA’s School Energy Managers Project (see main story). The funding was provided by Louisville Gas & Electric/Kentucky Utilities as part of a rate settlement case.
“It’s in everybody’s interest to save energy,” said Wilson, who chairs the board. “So I think it was a smart decision by the utility companies, too. I think it’s one of those decisions you get in education that’s a win-win. We’re able to make improvements, plus we have a healthy environment and we save resources.”
Woodford County had been sharing an energy manager with another district but when he recently cut back on his schedule, the board affirmed its support for the program by creating a part-time energy manager’s position, giving those duties to its head custodian, who will combine it with his maintenance management.
The district’s former energy manager, Jim McClanahan, “really helped us to understand that by doing a lot of little things, they add up to big things,” Wilson said. “We’re going to keep striving to do that.”