County commission seeks utility savings

Friday, April 2, 2010

Marshall County commissioners seem favorably impressed with a proposal from an international electric facilities company to blend a federal grant with financial savings from more efficient equipment to stabilize costs now and save money in the future.

Utility bill savings are created by energy conservation measures installed by Schneider Electric employees who would: install dampers and vents so rooms wouldn't be heated or cooled when they're empty; replace out-of-date lamps with new efficient fixtures; and use controls to avoid energy demand spikes that increase electric rates.

This is according to Katelynn Pastor, an account executive with Schneider's Building Business office in La Vergne, who made her pitch to the county's Building Committee this month when County Commissioner Don Ledford replied to her basic question.

"Do you want to pursue it?" she asked.

"If we tell you tonight, is it etched in stone?" he responded.

"No," she said.

"Then the answer is yes," Ledford replied.

Most of the calculations Pastor presented would result in at least a two-year wait before the savings covered the initial cost, but County Budget Director Freda Terry noticed that the calculations included an interest rate for money borrowed to start the program.

"I can borrow money for less," Terry told Pastor.

Schneider's representative then plugged in new percentages as suggested by commissioners who used rates that were more than what Terry cited. That appeared to make the project acceptable to the commissioners.

"The project depends on the grant and a lower interest rate," Ledford said. "Assuming that's all a yes, it's do-able."

With supportive comments during previous meetings, Pastor submitted a grant application before that meeting of the Building Committee on March 18. Applications were being processed by state officials, she said. Thereafter, applications are sent to federal officials who are to distribute economic stimulus funds.

"It will probably be May before we know the results" of the application process, she said.

Commissioners' interest last year prompted Schneider employees to examine seven county buildings to see which were suitable for the program. They narrowed it down to four buildings. They are the County Courthouse, the Courthouse Annex, the public library and the Hardison office annex.

The Courthouse Annex "is the biggest energy waster," Pastor said. "The way the HVAC (heat, ventilation and cooling) system was designed... there's no control..."

County buildings also have light fixtures for which there are no replacement parts because they're no longer manufactured, she said.

Terry pointed out that "perimeter lights" that illuminate the Annex at night required bulbs that cost more than $70 each. As bulbs blew out, she said, the fixtures were changed one at a time to avoid the long-term cost of expensive bulbs.

Pastor's plan for the Annex and other buildings is to control heating and cooling so that costs are reduced at night and that when a room is empty, then it's not heated or cooled. Override controls would be installed if an employee had to work late, or when the county holds meetings at night.

"Schneider would act like a general contractor and will do all the design work," Pastor said.

The company would also contact a "third party financial institution" to receive payments from the county in the amount that it's been paying for electricity, she said.

Her early calculations showed a projected cost of about $407,000 total. After the $100,000 federal grant was applied, the difference would be borrowed and paid back with the savings from lowered utility bills.

"I know how strapped for cash everybody is," Pastor said. "I'd hoped to find a self-funded program."

That appeared to be impossible with the interest rates for loans she cited. However, with a better rate that's available through the county's ability to borrow, the project seems possible.

The county can borrow money by selling income tax free bonds that are attractive to some investors who accept a lower return on their money in exchange for no requirement to pay income tax on the interest income paid by the borrower.