KL Schools Consider Plan to Save Money on Energy Costs

Faced with aging buildings and equipment and ever-increasing utility costs, the Katonah-Lewisboro school district is considering "energy performance contracting," whereby the district would pay for building upgrades through future energy savings.

It works like this: The district would enter into an agreement with an energy services company (ESCO) that would complete an upgrade such as installing energy efficient lighting. New York State law requires that the ESCO guarantee that savings from the upgrade will meet or exceed annual payments to cover all project costs—and if the savings don't materialize, the ESCO pays the difference.

"The method is budget neutral," said Kendra McWilton, a representative of ECG Engineering, who presented the concept to the school board at its Mar. 1 meeting. "If the savings don't generate, the energy services company will cut you a check for the difference. There's no risk and no out of pocket."

The district currently pays about $1.2 million annually in energy costs and has recently identified $13 million in energy-related

"If you do nothing, you'll still pay the $1.2 million plus increases," said McWilton. "When you do a performance contract your costs go down 30 percent. You are not getting a net savings, you are trading up savings to pay for needed capital."

ECG Engineering, which has managed 65 energy performance contracts for other districts in Westchester and around the state, would perform many roles if selected as energy consulting firm, including conducting an initial energy audit, creating an RFP for potential ESCOs, overseeing the technical review of the ESCO contract and verifying that energy savings were realized. ECG's fees would also be paid out of energy savings.

It may have sounded too good to be true to some board members.

"What's the down side, why isn't everyone doing this?" board member Charles Day asked.

"They are now. Districts used to be averse to this doing this in the past, because before we had our service, it was a daunting initative," said McWilton. "Ten to fifteen years ago, they didn't have the oversight that's required."

She also said EPC does not lower the tax rate but it does prevent a future bond or tax-driven repair through the energy savings model.

The pair also said in addition to saving money, side benefits of this approach could include improved student performance because of better air quality, lighting and more comfortable temperatures, said McWilton.

The board thanked them for their presentation and said they'd be in touch. A copy of the full presentation can be found here.