With anticipation of receiving federal rebates for switching to energy-efficient systems, Springfield Board of Education members approved a contract for geothermal HVAC systems at three schools during their most recent meeting.
The board approved a contract with Veregy, LLC, to replace the HVAC systems at Carver Middle School and Disney and Sequiota elementary schools with geothermal systems. The contract grants a maximum price of $14,088,085, but Springfield Public Schools is counting on energy efficiency rebates from the federal Inflation Reduction Act to return up to $5,435,234.
Travis Shaw, deputy superintendent of operations, said the rebates push the total cost to an amount that is within the school district’s budget.
Geothermal systems are considered one of the most energy efficient options for heating and cooling systems, according to the federal Office of Energy Efficiency and Renewable Energy. Shaw said during an earlier meeting that the systems provide the promise of reduced annual energy costs, and that Veregy will conduct audits to ensure SPS sees those savings.
The board voted 6-0-1 in favor of the purchase, with Board Member Kelly Byrne abstaining. Byrne said while he appreciates the possibility of savings through an energy efficient system and Veregy’s reputation, he took issue with how the rebate was not guaranteed, yet was used to justify the cost as within the school district’s budget.
“What concerns me about the way this is presented, we are being asked to approve the full $14 million, but we haven’t been given much indication on the risk factor of not being able to receive the rebate,” Byrne said. “If we were voting on a contract of $8.6 million, it would be a no-brainer.”
Through discussion, Byrne asked for a similar contract that held Veregy responsible and liable for cashing in the rebates. Changing the contract at this point, however, would have required another bidding procedure, said Superintendent Grenita Lathan. Two bids were received for the project, which calls for replacing end-of-life systems at the three schools, and both of the bids came in over a target of about $8.5 million.
The risk of not receiving that rebate is minimal, company officials said during a presentation at a previous board meeting. The procedure of obtaining it is similar to other energy-efficiency rebates from the government, where home consumers buy a qualifying appliance from a seller first, before being able to apply. The company has a business model of helping clients incorporate energy efficient systems into their buildings, according to its website.
“There is a minimal risk, but (this grant) has been around since 2005,” said Sage Acorn, a representative of the company. “It has never been redacted, and always been increased.”
Shaw said SPS would use a rebate that has been available to homeowners, and only recently made available to public school districts.
“This is not new money that the federal government just came out with. These dollars have been allocated for several years,” Shaw said. “What is new is that they have said public entities and schools specifically are now eligible for these dollars.”
Work is projected to be completed by November of next year. Springfield Public Schools can apply for the rebates once the work is completed and the system is in operation, which means any rebates would arrive sometime after that.
