Proposed performance contract could save WASD $1 million

April 20, 2010|By KATE S. ALEXANDER

WAYNESBORO, PA. -- A Harrisburg, Pa., contractor on Tuesday presented the Waynesboro Area School District with a proposed performance contract it claims could save the district nearly $1 million in energy spending.

Pennsylvania electricity rate caps are set to expire at the end of this year, causing a wide range of estimates by which rates will increase. The district requested proposals for performance contracts from Energy Savings Companies, or ESCOs, to prepare for anticipated rate hikes.

On Tuesday, the McClure Co. of Harrisburg presented its proposal to the board, which included $4.5 million in districtwide energy-conservation measures and HVAC upgrades, and nearly $1 million in net savings.

By law, all costs associated with a performance contract project must be self-funded, said Shayne Homan of the McClure Co.

Because the energy-cost savings, which are contractually guaranteed by an ESCO, must exceed project costs, the district would fund the project by redirecting money typically spent on HVAC material, equipment and service, he said.

Business Administrator Caroline Dean said four companies responded to the district's request for a proposal.

McClure, she said, offered the most cost-effective improvements.

The company proposed upgrading every building in the district except Waynesboro Area Senior High School to minimize the amount of energy expended per square foot.

Other proposals only addressed issues at a few buildings, Dean said.

"All our buildings need work," school board member K. Marilyn Smith said. "I think we'd be silly not to take advantage of improving as many buildings as we can."

McClure's proposed upgrades included installing a shared geothermal heating and cooling system for Summitview Elementary and Waynesboro Area Middle schools.

It also included a mix of lighting retrofits, heating and cooling system replacements, sealing and insulation, and control calibration districtwide.

The district anticipates spending about $600,000 on utilities in 2010, Homan said.

At the end of the first year, if it accepts the proposal, the district should save $201,261 on energy utilities and $104,171 operationally, he said.

Homan said the district would be guaranteed to save a net of $909,655 during the life of the 15-year contract.

In months where savings were not realized, McClure would reconcile with the district for the difference, he said.

School board member Leland Lemley requested district staff to validate McClure's savings claims and provide a detailed five-year summary of energy spending as soon as possible.

Board member Firmadge Crutchfield questioned the company's financial backbone and ability to uphold its contractual guarantee should it collapse in the next 15 years.

Homan said McClure is a subsidiary of PLL Energy Services but he needed to investigate what, if any, assurances were available on the guarantee.

Dean said she will seek validation in time for the next meeting, when the board likely will vote on the proposal.

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