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Archive for Wednesday, September 18, 2002

Changes could save university $34 million in energy costs over 20-year period

September 18, 2002

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Kansas University will get $18.4 million in energy-saving improvements.

KU is taking advantage of a new state policy that allows universities and other state entities to pay for conservation upgrades with bonds, then pay them off with money saved in energy costs.

"We simply don't see any other opportunity to make these needed changes," said David Shulenburger, provost and executive vice chancellor. "It's important for our campus to conserve. I think it's a tremendous opportunity."

KU will present its proposal for energy conservation Thursday at the Board of Regents meeting in Topeka.

The Legislature in 2000 approved the new policy called "performance contracting," allowing entities to contract with an energy services company (ESCO) to provide energy-saving upgrades and pay for them with bonds. The ESCO guarantees the money saved by the upgrades will pay for the improvements.

KU contracted with Viron Energy Services in Overland Park to perform an energy audit last fall. The company identified 150 energy-saving measures that would save about $1.7 million per year.

Those include installing programmable thermostats, replacing aging cooling towers and a boiler, installing solar window film and making electrical upgrades.

KU spent $8 million on energy costs during fiscal year 2001.

The $18.4 million in improvements, which don't have a deadline for completion, will be paid for by Viron Energy Services and repaid by KU over 20 years. Viron estimates the changes will save KU $34 million over that time.

"It's beneficial because we are picking up $18 million worth of projects all at once," said Theresa Klinkenberg, chief business and financial planning officer. "In the past we did things piecemeal  one at a time  according to what we could afford."

KU is the first state agency to take advantage of the new policy. Eric King, director of facilities for the Board of Regents, said Pittsburg, Kansas State and Fort Hays State universities also were in various stages of performance contracting.

"This becomes real important with the scarcity of funding," King said. "We've had a backlog of deferred maintenance needs. This is one way those maintenance needs can be done."

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