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Energy savings in Hawkins schools might pay for costly HVAC replacements

Jeff Bobo • Jan 13, 2020 at 5:30 PM

ROGERSVILLE — The Hawkins County Board of Education voted 6-0 Thursday to authorize Trane to conduct an energy efficiency audit on all 18 schools to determine potential utility savings through more efficient lighting, controls and equipment.

That audit is necessary for the BOE to be eligible for low-interest state loans to pay for impending HVAC replacements at the two main high schools.

It would be a requirement that those state loans be repaid using utility bill savings created by implementing Trane’s energy efficiency recommendations.

There is no charge to the county for the $135,000 audit if Trane is hired by the county to implement the energy saving changes it recommends.

Utility bill savings are guaranteed

Upon completion of its audit, Trane will guarantee a certain amount of energy savings on school utility bills. That guaranteed savings will be used to pay off a low-interest loan provided by the Tennessee Department of Education’s Energy Efficient Schools Initiative (EESI).

If the school system’s savings fail to meet the amount that was guaranteed, Trane will write a check to cover the difference.

Director of Schools Matt Hixson told the Times News Friday that HVAC replacement at Cherokee and Volunteer high schools is the top priority.

A conversion to 100% LED lighting in all 18 schools, which will probably be among Trane’s recommendations, is expected to save the school system approximately $300,000 annually.

“This savings will help offset the initial and long-term cost of HVAC system replacements at the two largest high schools,” Hixson told the Times News. “We are attempting to perform long overdue retrofits and replacements with the least amount of long-term financial impact.”

“You don’t have to go to your tax base”

On Thursday, EESI Deputy Director Scott Slusher told the BOE that state loans through his program have an interest rate of 1.5% for $3 million and less and an interest rate of 2% for loans between $3 and $5 million, which is the program cap.

That’s compared to current bond rates, which vary from 2.5 to 2.75%.

“The best way to look at EESI, you don’t have to go to your tax base,” Slusher told the BOE. “You’re really utilizing EESI’s credit card to pay for the project. The savings that will be guaranteed through a performance contract (with Trane) will go to repay the loan over a certain term.”

In 2015-16, Hawkins County participated in a program to switch its T-12 light bulbs to the more efficient T-8s. Now, however, the price of the even more efficient LED bulbs has gone down to the point where there are substantial utility bill savings to be found by making a change again now.

“Across the board lighting is your No. 1 thing (for savings), HVAC is second, and then controls,” Slusher said. “Automating the process to make sure your lights are off when they’re supposed to be off, the temperature of the buildings are at set points, so if no one is in school, or you have a snow day, let’s ramp the building down so we can save the energy. There’s no sense in heating or cooling a building if school is not in session.”

Slusher said Tennessee school systems average between 18 and 25% on utility bill savings as a result of these type of energy saving projects.

Potential implementation in 2020-21

Once Trane completes its audit and makes its recommendations, the state will send engineers to confirm the company’s numbers before allowing the project, and loan, to move forward.

Trane officials gave a presentation to the BOE Thursday which proposed an audit completion deadline of this spring, with the project savings and scope finalized by early summer, and execution of the financing and contract by late summer.

Under this timeline, the energy-saving changes would be installed throughout the school system between the fall of 2020 and the fall of 2021.

Aside from replacing the HVAC units at Cherokee and Volunteer, Hawkins County Schools has several other costly projects looming including: cooling tower replacement and loop repair at Church Hill Middle, Joseph Rogers Primary and Mount Carmel Elementary; HVAC and windows at Hawkins Elementary; main electrical switchgear at Cherokee and Volunteer; and stadium lighting for two fields beside Surgoinsville Elementary.