Energy savings could yield $600M for Philly schools

The Philadelphia School District on Monday announced it would launch an energy-savings program that could ultimately yield at least $300 million — money that would go to pay for some of the system's $4.5 billion in deferred capital projects.

Officials estimated they could also cut their energy costs in half. Over 20 years, improvements from things like new green roofs, boilers, windows and lighting could save the district $600 million, they said.

The work would not cost the district a penny, officials said — a system called "energy performance contracting" will allow the system to use the savings to fully fund the capital work.

It will also improve conditions in a school system whose aging buildings often hamper teaching and learning for 17,000 employees and 130,000 children.

If a three-school pilot program to begin in the fall is successful, the program could go citywide, though a whole-district project would likely take 10 years or more to complete. Over time, the school system could reduce its energy consumption by 50 percent, officials said.

Superintendent William R. Hite Jr., City Council President Darrell L. Clarke, and other officials made the announcement Monday at Lankenau High School in Roxborough, a building where thermostat issues mean part of the building is too warm and part is too cold — leading to wasted energy.

When the School District said this year that it had a backlog of nearly $5 billion in deferred maintenance projects at its more than 300 schools and other buildings, a lightbulb went off for Clarke, he said.

"I thought, 'Maybe we, with the Energy Authority, could be of some help,'" Clarke said. He has championed the Philadelphia Energy Campaign, a 10-year project to complete energy savings projects in small businesses, low-income homes, city buildings and schools. It could also create 10,000 jobs, Clarke said.

The jobs for the larger city project would be created for workers to complete the energy improvements;  make products for those improvements; and gain work because the savings from those improvements have been invested back into the economy, Clarke has said.

Other school systems have undertaken such projects, but none on the scale envisioned in Philadelphia, said Emily Schapira, executive director of the Philadelphia Energy Authority, the independent municipal agency leading the charge on the energy campaign. San Francisco, Chicago, and Portland, Ore., have all used energy performance contracting; locally, the Norristown Area School District also completed millions in capital improvements using one.

"They're uncovering new ways to fund much-needed capital work," said Schapira, whose agency has consulted with the district free for the last six months to get the pilot off the ground.

Energy performance contracting works this way: State law allows an entity such as a school district to finance capital work that will save it money down the line. An energy services company the district will contract with would guarantee the savings, ensuring that the project can't cost taxpayers money.

The work itself could be financed for terms of 20 years or less in a variety of ways, such as through selling bonds or entering into municipal leases.

The school system on Monday took the first step toward launching the pilot, opening a competitive process to hire an engineering firm to lead it.

Hite said the district would choose the three schools for the pilot based on a number of criteria, including school leadership support, level of deferred maintenance, and percentage of building occupied.

Lankenau, for instance, is in relatively good shape, according to the district's recent Facilities Conditions Index report, but it has needs: the boiler runs on heating oil, not natural gas; the lighting is old and inefficient; and the pneumatic thermostats are problematic.

Some rooms are so hot, even in winter, that windows have to be opened to make the temperature bearable for students. And some rooms are freezing at the same time, Schapira pointed out Monday, standing in a chilly math room.

"There are times when the room is so cold that they actually move the class to another part of the building," she said.

The district spends about $45 million on energy costs annually. Officials said they could get that down to about $23 million.