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Saving energy makes cents

A major retrofit of light, air and water systems saved the Hernando County schools more than $800,000 in energy costs last year _ a result expected to repeat itself annually through the year 2020.

The savings came as a result of a complex deal the School Board struck with Trane Asset Management Corp. in 1999. The deal took full effect in October 2000.

Under the arrangement, Trane leased the school district $17.4-million worth of new energy equipment _ things like air-conditioning systems, light fixtures and water faucets.

The district didn't have to go into debt to acquire the equipment. Instead, savings from lower energy bills during the next 20 years will cover the costs.

In other words, the School Board is putting the same amount of money into its annual energy budget as it did in 1997. But with only 70 percent of the budget needed for water and power bills, the district can apply the savings to cover the cost of the lease payments.

As good as the $805,288 savings was last year, it still fell below the $839,595 annual savings target that Trane agreed to when it struck the deal. Under terms of the contract, Trane had to write the School Board a $34,307 check for the difference.

Trane can recover that money this year if it can save the district money beyond the agreed-upon target. But the deal is written so that any savings beyond that $34,307 payout will be money the school district can keep.

So, if the energy bill is cut by $1-million below the 1997 baseline, the district could pocket more than $126,000. The rest of that $1-million would cover the equipment payment.

"I think it's working out tremendously well so far," said School Board chairman John Druzbick.

This type of energy "performance contract" is becoming more common in Florida. Because of its costs-savings potential, it has been encouraged by the state Legislature, which created a law outlining how such contracts should be written.

That law requires companies such as Trane to guarantee that the annual cost savings will meet or exceed the costs of the energy-saving equipment. That's why Trane had to come up with $34,307 this year _ it failed to meet its savings promise.

Trane officials said the reason savings fell short was that energy-saving measures were not fully operational for the first half of the inaugural year, a 12-month period that ended Sept. 30, 2001.

Trane's new equipment was installed in the summer of 1999. Some schools, like the newer Suncoast Elementary, required less work. Others, such as Springstead High, were gutted and overhauled so drastically that some officials feared the school wouldn't be ready to open that August.

Trane officials spent the next year and half fine-tuning their system.

Ken Hill, the district's maintenance supervisor, said he expects Trane will surpass its efficiency target next year because energy-saving measures are more fully in place now. District officials say they want to do more to remind school employees that there is money to be made for the district _ and their school _ for energy-efficient behavior.

All in all, the first year of the performance contract, which once sounded too good to be true, appears to have lived up to its billing.

"Apparently, we saved $800,000 over our previous year's utility bills," said School Board member Sandra Nicholson. "If that's a fact, it's a good thing to do."

_ Robert King covers education in Hernando County and can be reached at 754-6127. Send e-mail to