Energy Company Makes $ 250 Million Pitch at MPS | New

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A the company made the kind of “guaranteed savings or we pay” talk that you normally see in TV commercials or door-to-door launchers.

But this took place at the Mesa Public Schools Board of Trustees meeting, as Midstate Energy said, “Money saved on energy and operating costs can pay for school improvements. buildings. Guarantee: If the project fails to reduce costs as guaranteed, Midstate pays the difference. “

Midstate Energy is the company that took the big step. No action was taken as it was an information item on the council’s agenda. It was a lot of information.

Indeed, the total cost of a district-wide equipment replacement project: $ 200 million.

With interest, the plan manages a quarter of a billion dollars: 250 million dollars.

“Big projects mean a lot of savings to be put out of the utility company and into your buildings,” said Randy Falconer, the pitchman.

“We are redirecting the money you pay into utilities to buy new equipment,” he continued. “There’s a statue in Arizona for that. I have to guarantee that this takes place. If the savings do not materialize, I am responsible for writing a check to the district for the difference.

He claimed that Midstate had worked with “50 schools in this state alone”.

The plan is highlighted by the replacement of heating and air conditioning systems, the installation of equipment to increase energy efficiency and the addition of a massive solar system.

The first phase alone includes a $ 20 million solar system “to generate electricity and reduce purchases from the local electric utility.”

Assistant Superintendent Scott Thompson said MPS spoke to three companies about the “concept … of a district entering into an equipment lease-purchase agreement with the idea that the expense would be offset by the savings.”

“Midstate has done a lot of the work at its own risk and at its own expense,” Thompson noted.

“It’s a little different beast. We think innovatively, ”said Thompson, launching a 90-minute presentation and discussion.

Falconer summed up the $ 79 million first phase of the project.

According to his argument: “Total gross savings = over $ 99 million. “

This, however, requires a contribution of federal pandemic relief funds totaling $ 30 million.

The total net savings, according to Midstate’s presentation, with “additional savings beyond the cost of paying for the products,” is $ 37 million, if the pandemic relief money is used. Without it, the savings are only $ 2.8 million, according to Falconer.

Falconer’s pitch advised using these relief funds rather than maintenance and operations funds, which cover normal district expenses, such as payroll.

“Additional savings, savings greater than the amount needed to pay for the products, will be M&O savings that can be fed back into the classroom. “

Part of the sales plan may sound familiar to those who have considered home solar systems.

“Instead of paying a utility company, you can use that money to improve the health of your buildings for occupants and reduce capital requirements. Drive your savings into the classroom or wherever you need it most. Put simply, “you are paying for this project whether you do it or not,” said Midstate’s presentation.

In addition to saving millions, Midstate promised better “improved classrooms” with better indoor air quality and “improved safety”.

Midstate is a division of Veregy, which on its website claims to be “an industry leader in energy efficiency solutions, solar technologies and smart buildings” and has “provided billions of energy performance contracts for customers in the following areas: K-12 education; local government; health care; transport; Higher Education; federal government; commercial.”

The “win-win” idea presented is to reduce the neighborhood’s carbon footprint while saving a lot of money.

“Using the savings generated by energy efficient products reduces the costs of your utility bills and these savings can be used to pay for energy efficient products without affecting current budgets. You use your utility costs to improve your buildings, ”Falconer said.

Board members discussed aspects of the presentation and different funding options.

One was ready to go.

“I would like us to agree to move forward,” said Kiana Sears. “We have families who say, ‘It’s hot in the classrooms.’ We have these 40 year old systems.

“For me, especially as a green person, it’s a given,” she added. “We have this guarantee. I don’t understand why we don’t do this for our families and our children.

Board member Lara Ellingson agreed, saying: “It is absolutely necessary.”

But she said she was concerned about “$ 50 million in interest … We need to discuss how we’re going to pay for it.”

Falconer had a response: “These are the lowest interest rates we’ve ever seen. “

And, he stressed, “the interest is included in the guarantee”.

The board did not vote on the system, which will likely be presented for a vote at a future meeting.

“I feel a sense of urgency,” said Marcie Hutchinson. “Our parents want our children to attend healthy and safe classes. A healthy classroom means a comfortable temperature, it means excellent air quality.

Although he noted that each phase could last for two years, Falconer exuded confidence, repeatedly speaking of the huge savings and extraordinary expertise of his company:

“We’ve done it a million times.”

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