By 2007, Madison County School District had a backlog of deferred maintenance projects “due to lack of funding”, such as replacing costly HVAC systems. Then the 2008 recession hit, forcing the state of Alabama to reduce the district’s budget further.
“We had little flexibility for capital improvements to reduce energy consumption and our utility bills,” says Madison County Board of Education CFO Karen O’Bannon.
From 2011 to 2013, for example, utility costs averaged $4.6 million annually.
A 20-year energy efficiency plan
The maintenance backlog and lack of funding put Madison County in a difficult position. So the district partnered with Schneider Electric to create an energy savings performance contract.
Under the contract, Schneider first installed energy-efficient lighting, building controls and HVAC tech district-wide.
“We could not have done this on our own. Schneider Electric made all of these projects possible.”
Madison County’s project is reducing energy costs by 40 percent. This means the district will make $40 million in total savings over 20 years to pay for these enhancements, as well as future projects.
“We were impressed by Schneider’s guaranteed energy and cost savings, and the recommendations from other customers,” says O’Bannon. If the district doesn’t reach the promised level of energy cost savings from this technology at the end of each year, Schneider will cover the difference.
Unlock new revenue streams
To fund the project, Schneider helped O’Bannon secure $14 million in federal qualified energy conservation bonds, $500,000 in interest-free loans from the Alabama Department of Economic and Community Affairs, and $500,000 in rebates from a local utility company.
Schneider then introduced O’Bannon to underwriters to finance the remaining $8 million.
Reinvest savings to improve district
Madison County has currently reinvested $31 million of these cost savings for improvements and other initiatives districtwide, such as adding STEM programs and improving overall instruction. The graduation rate recently peaked at 92 percent. And last year, more Madison County students took the AP exams and scored higher than any other Alabama school district.
“There’s no doubt at all that Schneider was the best choice for our school district,” says O’Bannon.
As the district continues through its 20-year plan, O’Bannon tracks consumption through an automation system. “We could not have done this on our own,” she says. “Schneider made all of these projects possible.”
Learn more about Schneider Electric’s energy savings projects.
Contributed by: Steven Blackburn, associate editor for District Administration Magazine and University Business Magazine
This case study first appeared on District Administration Magazine. To view the original, click here.