LA Community College System Heads for Energy Independence

Financing Model is Key to Success

LACCD’s financing model is an important piece of the puzzle: It will allow the colleges to make the conversion to renewable energy without investing any money up front.

Banks are investing the capital, and the LACCD has agreed to pay back the loan with every kilowatt-hour by buying electricity out of the campus system for the next 25 years. Their rate for electricity will still be less than what they were paying the utilities, even with the capital cost, maintenance cost and bank profit margin rolled in.

The banks have the additional bonus of monetizing the depreciation of the equipment through tax write-offs, along with taking advantage of federal, state, local and utility incentives.

Eisenberg says that any entity, public or private, can do the same thing.

The LACCD is using a similar financing model for its energy efficiency measures, from which it hopes will reduce energy use by 15% to 20%.

Each campus has an ESCO (Energy Saving Company) that won the job in a bidding process. Among the nine campuses, there are five different companies including Chevron, Siemens and Ameresco. The ESCOs come in and do an investment-grade audit, recommending retrofits and other efficiency measures. They cover the cost of the upgrades, and the LACCD pays them back out of the energy savings achieved. The ESCOs guarantee a minimum amount of energy savings, so there’s almost no risk.

Community Colleges Leading the Way

“It’s interesting because people never thought of community colleges as being terribly innovative or cutting edge,” says Eisenberg. “We’ve demonstrated that we are. No one else is where we are in terms of renewables and financing. It’s made people stand up and take notice.”

The community college system has received recognition, and even signed a partnership with the Clinton Climate Initiative. It was also one of the first educational institutions to join the Climate Registry and the first community college district in the nation to report their greenhouse gases in accordance with the protocol set by the Registry.

“It goes back to the board of trustees in 2002,” Eisenberg adds. “They knew that someone needed to be first and provide a model that others can follow and that’s what this project is doing. It’s a model showing the technology and financing mechanism that anyone can use. It will hopefully lead to a rapid expansion of this technology across California and the U.S.“

The project has other benefits, as well, that go to the heart of its mission, as Eisenberg explains:

“It’s attracting students that want to learn about the technology and how to implement it. At the end of the day, we’re a learning institution and the more students we can train, the more of them will go out across the United States and implement this technology.”

Clark sees similar micro and macro importance to the project.

“The LACCD sees sustainable campuses as a key in the community for demonstrating how this can be done for other building complexes like shopping malls, office buildings, housing units, etc. and thus educating students, faculty and staff on the installation, operation and maintenance of renewable energy systems.

“Some scholars call this ‘The Third Industrial Revolution’, or how we – people all over the world – must change dramatically from ‘The Second Industrial Revolution’ that was totally dependent on fossil fuels, into an era that stops violating our environment.”

Image credit: Los Angeles Community College District

See also:

Start-Ups Rise to Push Solar on College Campuses

Interview with Nobel Prize Winner Woodrow Clark

Universities Start Tailoring Degrees to Green Jobs