However, a proposed high-efficiency LED lighting program is not part of the plan, a representative of the energy company making the proposal said, because city officials are not willing to issue bonds or seek loans for that money-saving transition, although he said it could be done later.
The Board of Education got a report from Knoxville-based Ameresco sales representative Steve Seifried at a work session Tuesday evening. He answered some past questions about the proposed power purchase agreement and agreed to get the answers to some new ones by the Oct. 8 board meeting.
In a nutshell, the proposal would be an agreement for Ameresco to buy, install and maintain roof-top solar arrays across the school system, charging the school system a rate for the solar power less than what American Electric Power (AEP) would charge. The model assumes a 4.5% annual increase, on average, by AEP compared to a 3.5% increase Ameresco, which would own the panels, would charge KCS.
Seifried explained after the meeting that the LED part of the plan has been dropped because leaders of the city, where the Board of Mayor and Aldermen would have to fund such a plan, aren’t willing to pay upfront with a loan or bonds or do a lease-to-purchase agreement, the latter of which school officials said is questionable legally under Tennessee law. However, he said the LED program was still viable.
Much of the presentation was the same as a recent one Seifried gave the board, saying over 20 years the system would pay $2,985,268 less for electricity. However, a detailed breakdown showed that the first-year savings would be $61,946, up to a one-year savings of $268,965 the 20th year alone and almost $3 million cumulative for the 20th year.
The math works as follows, Seifried said: Historic data over 12 years indicate AEP charges go up, on average, 4.5%. Ameresco would increase its charge for power to KCS by 3.5%, the first year making for a difference of $61,946.
Further, he said that among all schools proposed to have roof-top solar arrays, the panels would produce 42.5% of the electricity needed for those schools. However, the percentages vary across schools, with Robinson Middle at 83.78% and the Palmer Center at 84.74%. On the other end, Lincoln Elementary, with less roof space facing south, would be 18.49% and Dobyns-Bennett High School plus vocational wing would be 16.2% because the mostly domed roofs of D-B are not suitable for solar panels.
Board members earlier expressed disdain for earlier plans to install carports in the D-B parking lots covered with solar panels.
“You’re not going to see most of these unless you want to see them,” Seifried said, adding that some school systems and other entities want to showcase solar panels.
Board members Eric Hyche and Todd Golden asked how much excess power AEP would be buying back from Ameresco from the over-production of solar panels at a roughly retail rate, and Seifried said he would get the answer to that.
Golden also asked about a guarantee of solar power savings. Seifried said it would be guaranteed per year but over longer periods of time, based on a calculation of available sunlight. Golden also asked about adding and taking buildings away from the program since, for instance, the city eventually will turn Sullivan North High School into Sevier Middle School and may abandon other buildings or build more over time. Seifried said that would be worked out further down the line. Sevier is to become an elementary school.
The school system so far owes nothing to Ameresco for its “30%” presentation, but it will owe the company if the board moves forward with the engineering presentations but then doesn’t do the program.