Lebanon schools move to contract phase on $16.7 million energy‑savings plan

The Lebanon Community School Corporation on Tuesday moved to notify the apparent best‑value vendor to prepare contract documents for a districtwide guaranteed energy‑savings project after a yearlong feasibility study and a competitive request for proposals.

Bob McKinney, StrataLine representative, told the school board that the district’s selected set of energy conservation measures (ECMs) — virtual energy management and retrocommissioning, boiler replacements, solar arrays at select sites, and combined heat‑and‑power microturbines — were modeled to deliver about $16.7 million in energy savings over 20 years and about $618,000 in available energy tax credits, producing roughly $17.3 million in gross project benefit. McKinney said the net project benefit after costs, operations and financing would be about $1,438,000 over the 20‑year modeling period, and first‑year utility savings were estimated at about $485,000.

Why it matters: Board members framed the project as a hedge against future electric rate increases that otherwise must be absorbed by the district’s operations fund. The district’s finance and operations staff said the plan could protect budget flexibility in coming years while preserving the district’s ability to meet statutorily required student days and other obligations.

McKinney, who described StrataLine as an owner’s‑rep energy‑services firm, reviewed the RFP process: three firms responded (Brewer Garrett, Schneider Electric’s Indiana office and Verigee Energy), each interviewed and scored for best value. He said the respondents’ recommendations echoed StrataLine’s feasibility findings and recommended bidding specific ECMs and an alternate to allow apples‑to‑apples comparison.

On specific measures, McKinney said controls and retrocommissioning — paired with a virtual energy platform that provides realtime monitoring and tariff visibility — were the quickest payback and highest‑impact measures after LED lighting. He described microturbines as small (about 60 inches tall and 24 inches wide) natural‑gas units (~65 kW each in the proposal) sited near transformers that generate electricity and produce useful heat to offset boiler operation, a benefit for large facilities and the district’s competition pool.

Board members asked for details on financing and longevity. McKinney said the RFP modeled utility inflation at 5% per year (the firm’s historical assumption), used a 20‑year guaranteed savings window, and that contractors present multiple statutory guarantee options (referred to in the RFP as “options A, B, C or D”), with option B described in the presentation as the most robust because it separates metering and monitoring for clearly verifiable savings. He also said respondents included five years of operations and maintenance pricing and provided year‑6 through year‑20 options so the district can decide whether to prepay long‑term O&M.

Board members and staff emphasized that the board was not asked to approve a final contract Tuesday. Instead, district staff said they would notify the recommended provider, Verigee, to prepare contract documents, perform final engineering checks and deliver a guaranteed savings figure; staff said a finalized contract would likely return to the board at the August meeting because of the July 4 holiday and time needed to complete engineering and financing due diligence.

Other clarifying details discussed: the project modeling assumes eligibility for federal investment tax credits under the Inflation Reduction Act; changes to tax law or the act’s sunset provisions could affect credits, so McKinney said the district has a limited window to secure safe‑harbor contract status if it chooses to proceed. He also noted Lebanon utilities’ recent rate adjustments and a city ordinance related to rate decoupling, which could affect future tariff behavior and reinforce the school district’s interest in hedging energy costs.

Next steps: staff will notify Verigee to prepare contract documents and return a final guaranteed‑savings contract for the board’s consideration, likely at the August board meeting.