Energy savings: Some Sullivan leaders question success of work at county schools

J. H. Osborne • Feb 25, 2007 at 11:21 AM

BLOUNTVILLE - Since construction first began about six years ago, energy-savings improvements to county schools have saved Sullivan County about $5.2 million, according to a presentation to the Sullivan County Commission last week.

Some of the Commission's 24 members continue to discount claims that the work - which had a price tag of $24 million plus interest - has been as beneficial as was expected. Some say it was a downright mistake.

But school system officials and Energy Savings Group (ESG) - the company that did the work on county schools - say savings are running near, or above, an original contract figure of about $900,000 per year.

"Overall, I can say there have been substantial savings," said Glenn Arwood, director of Sullivan County's school system. "We're all very energy conscious and we're doing all we can to protect that dollar."

Arwood and others said the actual savings from the upgrades might not be easily pointed out by simply comparing budget entries from year to year - you have to factor in inflation as well.

A common complaint from commissioners has been that part of the $24 million was spent for improvements at schools since closed by the Sullivan County Board of Education.

Russ Nelson, business development manager for ESG, said about 2 percent of the money spent was on those facilities. And the school system's maintenance director said some of the energy-efficient materials were removed from the closed buildings for re-use in other schools when repairs or other renovations are needed.

Arwood said ESG and county officials alike had to develop the improvement plan based on information available at the time - meaning all schools open then were dealt with.

"At the time, the crystal ball was very, very foggy," Arwood said.

Commissioner Eddie Williams, chairman of the Commission's Budget Committee, said spending the money on schools that were closed not long after makes it clear what the number one lesson is for county officials: long-range planning is essential.

Another oft-repeated complaint from commissioners has been that some county schools still have window air conditioners - when computer-generated graphics included in ESG's original proposal for the work showed the schools' windows without air conditioners.

Nelson explained, again, that the photographs in question had been used only to show commissioners what the new windows would look like - and they weren't meant to imply those schools would be getting central heating and cooling systems.

He said the contract for the work was very specific as to what was expected and that ESG followed it to the letter.

The County Commission entered a contract with Johnson City-based Energy Saving Group (ESG) for the work in early 2001. ESG had spent a year prior conducting a systemwide study of county school facilities and made recommendations for ways to make each more energy efficient.

The resulting plan included lighting upgrades, insulation, new heating and cooling systems, new telephone systems and new cafeteria equipment.

Every school in the county system had some kind of improvement work, including lighting upgrades which were projected to produce the quickest payback in savings.

Harry Trent, chief finance officer for the school system, said for the last year before the improvements were started, about $2.2 million was budgeted for electricity for county schools.

This year the figure is $1.6 million, Trent said - for a savings of $600,000 on that one expense.

But the savings should be calculated at a higher rate, Nelson said, because power rates have increased by as much as 25 percent.

To pay for the energy savings upgrades, the county sold $24 million in bonds in 2001 to be paid off over an 18-year period.

According to information made public at the time, the county will have paid about $36 million for the project, including interest, by the time that debt is paid.

The commission passed a resolution stating the bonds would be paid off with $400,000 a year from the school renovation fund and energy savings of more than $900,000 guaranteed by ESG.

At the time, County Attorney Dan Street raised the point that the contract guaranteed more efficiency, but actual dollars saved could vary due to inflation of power and fuel costs.

"We could reduce consumption, but energy bills may go up tremendously," Street told commissioners in 2001.

Then-Director of Schools John O'Dell said energy bills would go up whether or not the county approved the project.

"If the electric bill goes up double, we'll be back to ask for more money whether we do this or not. We'll just ask for less (if the project is done)," said O'Dell in 2001.

Nelson said ESG's work for Sullivan County has drawn national attention after being mentioned in the film "Kilowatt Ours," to be televised on PBS later this year.

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