Board approves up to $8.6 million in refunding bonds to finance ESIP II energy projects

The West Windsor-Plainsboro Regional School District Board of Education voted unanimously to approve a refunding bond ordinance that allows the district to sell up to $8,600,000 in bonds to finance a second phase of energy savings projects (ESIP II), district financial staff said at the board meeting.

District finance adviser Dr. Christopher Russo told the board the bonds would fund a package of energy conservation measures—new solar arrays, HVAC replacements, boilers, ventilation optimization and building envelope work—and that the debt service would be paid from projected energy-cost savings. “There will be no tax increase,” Dr. Russo said during his presentation.

Board members were told the ordinance allows financing terms up to 20 years. Dr. Russo said the longer term is supported by the inclusion of generating assets in the package and by projected project performance. He added that, with current market conditions, issuing bonds is expected to be more cost-effective than a lease: “Recent lease rates have been in the mid 4% range compared to bonds that are in the mid 3% range. Over the term of the loan, of the 20, that's approximately a million dollars in savings on interest.”

Why it matters: The financing backs ESIP II, a follow-on to an earlier district energy project (ESIP I) that generated performance rebates and incentives. Board members and staff said much of the incentive pool supporting ESIP II is already earned or contractually due from the prior project,…