Valley View, Texas, Schools Improve Efficiency through Performance Contract with Schneider Electric


The Valley View Independent School District (VVISD) in Valley View, Texas, is implementing $1.2 million in facility enhancements designed to improve operations, comfort and efficiency at nine district buildings. Schneider Electric, the global specialist in energy management, will complete the work as a performance contract with the district. Schneider Electric guarantees that VVISD will reduce its utility costs by more than $52,000 annually when the project is completed in June 2010.
The VVISD serves a student population of more than 600 in this rural north Texas community. The district’s buildings contained aging mechanical equipment and antiquated lighting as well as lacking building control systems. But to make the repairs, the district needed an affordable funding mechanism.
“We knew there were numerous mechanical system issues to address and that we could improve efficiency and lower our energy costs,” said William Stokes, superintendent, VVISD. “Schneider Electric not only developed effective solutions for our facilities, but helped us to utilize a new financing program, Qualified School Construction Bonds, that will save our district thousands in interest charges.”
Congress created the Qualified School Construction Bond (QSCB) program as part of the American Recovery and Reinvestment Act of 2009. The QSCB program allows a school district to borrow funds at   interest rates near zero percent. The Stimulus Bill included a total of $22 billion to be allocated among the states in 2009 and 2010 to finance the construction of public school facilities. A bank lends the funds to the school district and the district pays back only the principal. The bank receives an annual Federal Tax Credit in lieu of the school district paying interest.
Performance contracting offers many long-term benefits for school districts, such as improved facility efficiency, occupant comfort, financial management and environmental protection. Typically, new, more efficient equipment and upgraded facility automation systems maximize energy efficiency and generate utility savings. Schneider Electric guarantees the amount of savings performance contracting projects will achieve and agrees to pay the difference if that amount is not realized.
“In addition to the benefits of the performance contract, such as the savings guarantee, the QSCB program saves districts substantial amounts. The maximum maturity of a QSCB, which is set by the U.S. Treasury, is expected to be 15 years. For a traditional loan for that term at five percent, the interest charges would be almost $400,000 per million dollars borrowed,” said Shon Anderson, vice president of Energy Solutions sales, Schneider Electric. “Schneider Electric is one of the very first energy service companies (ESCOs) in the country to use this funding mechanism for a project, and the Valley View contract was the first in Texas. By borrowing through the QSCB program, a school district can utilize the cash savings for other district purposes or to keep taxes lower.”
In addition to improving the district’s K-12 campuses, the performance contract will also include VVISD’s multipurpose, administration, maintenance, grounds and weight room buildings. Schneider Electric will upgrade or replace mechanical equipment, install direct digital controls, add lighting and occupancy sensors, and upgrade plumbing to reduce water consumption. Benefits the VVISD will enjoy as a result of the project include energy savings, upgraded facilities, the ability to control individual room temperatures and a financing method that will save thousands of dollars in interest.
About Schneider Electric
As a global specialist in energy management with operations in more than 100 countries, Schneider Electric offers integrated solutions across multiple market segments, including leadership positions in energy and infrastructure, industrial processes, building automation, security, and data centers/networks, as well as a broad presence in residential applications. Focused on making energy safe, reliable, and efficient, the company’s 114,000 employees achieved sales of more than 18.3 billion euros in 2008, through an active commitment to help individuals and organizations "Make the most of their energy.”
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