Sep 242012

By Francie Payne
The owners of Midstate Energy, Ben Matson and Donovan Stevens, joined the Joseph City School Board and members of the public for a work session Tuesday evening to answer questions on their firm’s proposal to provide energy savings totaling $400,000 to the district over the life of the project. As they had nearly a month earlier, members of the audience vowed that volunteers and district personnel could do the work without going into debt and still achieve energy savings.
The proposal detailed cost savings through items such as replacing nine of the district’s older HVAC units, installation of an energy management system district-wide with demand control capability, upgrading light fixtures and outdoor lighting, installing occupancy sensors for HVAC and light control, installing vending machine power management and making improvements to existing buildings, such as by replacing weather stripping.
With the help of a PowerPoint presentation designed to answer questions submitted by the district, Matson first explained a performance project as a model crafted with the help of the School Facilities Board to help schools meet their infrastructure needs as SFB funds were dwindling rapidly. Money saved on energy and operating costs pay for the very building improvements that brought those savings about. If the project fails to re-duce the costs as guaranteed, Midstate Energy pays the difference.
Questions regarding QZAB (Qualified Zone Academy Bonds) funding were not so easily answered, as al-lowed in-kind contributions were under legal review and the interest rate had not been finalized. Several times during the presentation, though, Matson and Stevens noted that if the interest rate was not zero percent, they would not offer the district a contract.
The modified scope of the project brought concerns regarding the high cost of individual projects, the pay-back time being longer than the life of some pieces of equipment and the fact that none of the work was needed to keep the schools open.
Matson noted that the SFB was looking for public/private partnerships to help district’s make infrastructure improvements. Midstate would work with the district to make sure savings were achieved, with the goal to maximize energy efficiency on campus.
The inflation factor of four percent on energy costs was also questioned. Matson noted that was the average increase in Arizona utility rates over the past five years, according to the Consumer Price Index from the U.S. Bureau of Labor. Even so, the firm lowered that inflation factor to three percent in refiguring potential savings to the district.
Operational savings, which include the cost of bulbs, ballast and belts, had also been questioned, but the point was moot, because a change in state law no longer allowed those costs to be used when figuring energy savings in projects such as this.
Some had questioned whether the rebates included in the savings would actually be realized. Matson said that Midstate has an internal rebate team that works to see that all available rebates go to the firm’s qualifying clients and that the firm guarantees those rebates.
Midstate officials were also asked whether the expected life of the equipment and the work to be done really equal to the life of the contract, which would be 15 years. Matson replied that it was, noting that the life cycle cost analysis on each portion of the project is taken from tables drawn up by engineering organizations.
Following Matson’s presentation, board member Ralph Bushman said, “The bond passed (about four) years ago did a great deal of work on the infrastructure. I don’t believe we have as great a need as some of the school districts…
“Some numbers (related to costs in the project) seem inflated. Yes, the savings would pay for it, but couldn’t we do it all out of pocket at much less cost?…
“If we go forward I will be asking that we look at each project in detail,” Bushman concluded.
“Are we bond-debt free?” asked Danny Young.
“No, we are about halfway through,” said Board President Ed Sorgen. “None of the equipment we are talking about was replaced with the bond, though.”
Matson was asked what the savings would be if the temperatures in the classrooms were left as they are now set.
He noted that the numbers currently used were included in the baseline used to develop the project. He did not have those numbers at hand, but said that they would be asked to stay within two or three degrees of the suggested temperatures of 76° for cooling and 72° for heating.
“I think it’s unwise to sacrifice some of our freedoms for these savings, especially when we could probably get some savings on our own,” said J.C. Hansen.
Bob Martineau concurred, saying, “We have the capability to do everything they are proposing on our own with the equipment we have. We have volunteers, including engineers, so all of the engineering expenses would be gone. There is no need to spend $1 million to do what we can do in-house with the equipment we have.”
Martineau will outline the Allen-Bradley plan previously used by the district at another work session, scheduled at 6:30 p.m. on Tuesday, Oct. 2, in the board room, located next to Joseph City Elementary School.