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$188k IS SOLAR PANEL COST - so far

Original post made by Ann Martin, Amador Valley High School, on Apr 27, 2009

When I first heard of (and confirmed) the error made by PUSD which required relocating the FHS solar panels at a cost of $100K, I contacted the School Board Trustees and asked that the PUSD Budget FAQs be corrected to include this information. That has not happened.
In reviewing the PUSD Vendor History Report, a consultant named Strategic Energy caught my eye. I requested a copy of the contract. The contract is between PUSD and Strategic Energy; PUSD hired Strategic Energy to "oversee solar power generation project." Part of Strategic Energy's role was to select among the three contractors who submitted solar panel bids to PUSD. The total fee for Strategic Energy's consulting services was $88 THOUSAND.
According to the PUSD Vendor History Report, Strategic Energy has been paid in full.

Based on the Budget FAQs, it will take over four years for PUSD to realize sufficent energy savings to offset the $188K PUSD has paid or is committed to pay for solar panels' installation. There may be additional costs associated with the solar panel installation. I am continuing to review the PUSD Vendor History Report and request copies of consultant contracts.

This is of course a very time consuming process much better suited to an accountant than to me. The one consultant I would gladly see PUSD pay for is an accountant who will comb through the budget to determine areas where budget cuts can be made, provide recommendations on where funds should not have been spent and assist PUSD in setting up procedures for PUSD to be as financially efficient as possible.

However, I am not only interesed in knowing how taxpayers' money has been spent, I am also interested in PUSD and the School Board trustees providing the transparency to the Pleasanton community which they have stated they would like to do.

I hope that PUSD will correct the information on the PUSD website to reflect the actual costs of solar panels and indicate that rather than realizing a savings to the General Fund, at present the costs relative to solar panel installation is a charge to the General Fund.

FROM THE PUSD WEBSITE (www.pleasanton.k12.ca.us)
Did the installation of solar panels cost the District money?
No. The panels were installed at no cost to the District. PUSD signed a Power Purchase Agreement (PPA) with Honeywell which enabled Honeywell to install panels on our roofs and enabled the District to buy power at a fixed, lower price. Our current cost for power is 11.5 cents per kwh, and the agreement includes a 4.5% increase annually for inflation. The going rate when we signed the agreement was 15 cents and has now gone to 16. The estimate for first year savings was $35,000, which will probably turn out to be $44,000 in savings this year.

Honeywell is also responsible for maintaining the panels. At the end of the agreement (20 years), the District has the option to continue the agreement, purchase the panels at a depreciated price, or have Honeywell remove them at their cost. In summary, the project has enabled the District to realize a savings to the General Fund.

Comments (17)

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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Apr 27, 2009 at 8:47 am

Stacey is a registered user.

Ouch. Obviously the $88K was probably paid up front, but I wonder if the power generation deal (which rendered the installation "free") includes that $88K. Not that it matters too much. It'll be years before PUSD sees any savings.


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Posted by Ann Martin
a resident of Amador Valley High School
on Apr 27, 2009 at 8:51 am

Stacey, that's a good point. I will ask PUSD for a copy of the agreement with Honeywell.


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Posted by MainStreetDiva
a resident of Vintage Hills Elementary School
on Apr 27, 2009 at 9:07 am

MainStreetDiva is a registered user.

I'm confused. I think I missed an earlier post. Can you clarify?
1. The cost of initial installation of the solar panels was 88k.
2. PUSD made an error (error in what? and who made this error?) which resulted in the solar panels having to be moved, at a cost of 100k?
3. The PUSD web site states that solar panels were installed at no cost to the district? If not where did the money come from?
Thanks for clarifying...


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Apr 27, 2009 at 9:19 am

Stacey is a registered user.

MSD,

As I understand it, you can reduce and/or eliminate the cost to yourself of installing solar panels with a contract where the installation costs are paid out over time to the installer out of the savings you receive because now you're a power generator instead of a mere consumer. PUSD did something like that.


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Posted by Ann Martin
a resident of Amador Valley High School
on Apr 27, 2009 at 9:22 am

Main Street Diva,
PUSD hired a consultant, Strategic Energy, to advise which contractor PUSD should select to install solar panels at PUSD sites. The cost for that contractor was $88K and the amount was paid out from PUSD General Funds.
When the Foothill solar panels were installed, they were installed in a way that obstructed the ridge view for Foothill High School neighbors. The School Board reviewed the FHS neighbors' complaint, even went to Foothill to check the installation, and agreed that the ridgeview was obstructed. The Board authorized PUSD spending $100K to re-install the panels in a way that did not obstruct the ridge view.

Although an Environmental Impact Review is not required for solar panel installation, it is a relatively easy step to solicit opinions from neighbors. This step was not taken by PUSD/Honeywell.

A couple years ago, we had solar panels installed on our home, and to avoid any potential problems with our neighbors, made sure our neighbors were notified of the work we had planned (via Pleasanton building dept). Notification is via post card, and neighbors have a period of time (believe it's 14 days) to contact the Pleasanton building department if they have any concerns about the work to be done.

PUSD could have avoided the need to re-install the FHS solar panels, and the need to spend $100K if they had taken this step.

I cannot provide an explanation as to why the PUSD Budget FAQs do not reference the above costs.

I emailed the school board members about this, and asked that they direct PUSD to amend the budget faq information so it is accurate. I did this when I first discovered that PUSD had committed to pay $100K to relocate the FHS solar panels. I did not receive a response.

I will again email the School Board Trustees about this matter.


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Apr 27, 2009 at 9:27 am

Stacey is a registered user.

"made sure our neighbors were notified of the work we had planned (via Pleasanton building dept)"

See, any regular citizen usually has to go through a process of due diligence but government entities seem exempt from such things. Did anyone see the article recently about San Jose's school district going into the pizza business for $3MM? If anyone wanted to start a business they'd need a business plan before a bank would give them a loan... But not government!


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Posted by Be Positive
a resident of Another Pleasanton neighborhood
on Apr 28, 2009 at 11:29 am

"$44,000 in savings this year."

Way to go PUSD- not only are you planning ahead for a future with significant savings, you are also going Green! Plans like these show PUSD's efforts to plan ahead and reduce costs.

Too bad many hear only see the glass half empty!


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Apr 28, 2009 at 12:57 pm

Stacey is a registered user.

Be Positive,

That's not $44,000 in savings this year. You have to divide $188,000 by $44,000 in order to get the number of years it will be before PUSD sees savings. Yes, I agree, great they are "going Green!"


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Posted by Ann Martin
a resident of Amador Valley High School
on Apr 28, 2009 at 3:12 pm

To Be Positive,
I'm not taking issue with PUSD going green, that's all to the good.
My issue is that the Budget FAQs should be accurate. It's not accurate to state that PUSD will see savings of up to $44K a year due to solar panel installation when those savings are offset by expenses for the same solar panels.
I'm very familiar with the kind of savings solar panel installations can bring. I had them installed on my home and it will be 6-8 years (depending upon how much utilities costs rise) before the energy savings I realize from the installation will offset the cost of the installation.
The savings which PUSD states are being realized this year, will not be realized for over four years because of their installation costs.


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Posted by ChangedmyMind
a resident of Another Pleasanton neighborhood
on Apr 28, 2009 at 3:27 pm

Ever since PUSD went forward with the Parcel Tax the only thing they've succeeded in doing is shining a spotlight on themselves that continues to get brighter. There are too many smart, college educated voters in this town that won't be swayed by skewed facts and numbers. The shell game isn't going to work here.


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Posted by Bad Math?
a resident of Downtown
on Apr 28, 2009 at 4:56 pm

I believe the math should be $188,000 divided by $44,000 will be when the system is fully paid for. At that point (approximately 5 years), all electricity produced will be effectively FREE!!! A 5 year return on investment on a system with a 25 to 30 year life is an awesome and forward thinking investment! PUSD has taken plenty of deserved hits for bad decisions. Why not give credit when credit is due!


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Posted by Be Positive
a resident of Another Pleasanton neighborhood
on Apr 28, 2009 at 5:19 pm

Because Bad Math? it is easier for many to see the glass half empty and "shine the spotlight" on all the mistakes. What company/organization doesn't make mistakes? It seems like this mistake was fixed, yet still people find it easier to complain and focuss on the negative.

Step back and look at what a distinguished district this really is. We have schools that are recognized both state wide and nation wide for their distinguished accomplishments, our API scores are all over 900, we are leaders in the GO Green effort with Fairlands being recognized nationally for their efforts. Something is going right! We are so fortunate to have the quality of education that we take for granted in this town. It is why I moved here, it is why I will gladly vote yes on Measure G!


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Posted by Ann Martin
a resident of Amador Valley High School
on Apr 28, 2009 at 5:20 pm

Bad Math,
I think you're ignoring the fact that PUSD had to spend $100K to correct a PUSD mistake....it was money that didn't need to be spent and would I'm sure have been very welcomed by the Barton Reading program director.
Also, I'm concerned that PUSD hired a consultant for $88K and the consultant wasn't able to prevent the $100K error.
Lastly, while PUSD will be saving money by using solar panels, I don't see anything in their FAQs that indicates they will be getting electricity for free, but to pay power at a fixed rate lower than the going rate.
PUSD certainly deserves credit for making every effort to go green, but I wish I could also give them credit for being accurate in their published statements.


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Posted by Rio
a resident of Another Pleasanton neighborhood
on Apr 28, 2009 at 5:39 pm

And the rest of the story.....

1) Honeywell owns, maintains and paid for the installation of the panels (no on-going maintenance costs being occurred here...)
2) PUSD has a fixed price on power for 20 years
3) AND will save the district $2.5 in energy costs

"Since the solar program at Walnut Grove proved successful, discussions opened up between the Pleasanton school district and a few energy companies, including the one involved with the original PV on a stick. Eventually, the companies agreed to pay for the installation of solar panels that are linked to seven school sites. As part of the agreement, the Pleasanton school district gets ecofriendly solar power at fixed low prices for the next 20 years."

Web Link

"The Pleasanton Unified School District (www.pleasanton.k12.ca.us) in San Francisco signed a 20-year contract in January with Honeywell International--a diversified technology and manufacturing leader serving clients worldwide--for a unique solar project
that will supply 20 percent of the district's electricity, the first of its kind for a California school district. Honeywell will install, own and maintain solar panels on seven district buildings and sell back the electricity at a price that will save the district $2.5 million. "

Web Link

So if we take into account the $188k in consulting fees and the installation 'mistake' that was made and subtract this from the $2.5 M being saved, I am still finding it hard to understand why the posters on this blog are trying to 'lynch' the district for an adjusted $2.3M+ energy savings plan that was smartly negotiated?

If you take $2.5M / 20 years, I end up with an annual savings of $125,000, so this means that the 'errors' will be paid for around month 18....

Oh - and this is in today's dollars and does not account for any increases in energy costs that will occur over the next 20 years.

I agree - give credit where credit is due by telling 'the rest of the story'....


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Posted by Stacey
a resident of Amberwood/Wood Meadows
on Apr 28, 2009 at 5:47 pm

Stacey is a registered user.

Bad math wrote: "At that point (approximately 5 years), all electricity produced will be effectively FREE!!!"

That's assuming that the solar panels cover 100% of their electricity needs. If you notice from Rio's post above, the panels only supply 20% of that need. Here's another math problem. $44,000 is 20% of what total cost?

Rio,
I think you misunderstand the thread. No one is trying to "lynch the district" over the solar panel project. The lynching is for the district's willful deception of the public on their FAQ where they make it sound like they didn't spend a single dime on this project. What else are they being deceptive about?


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Posted by Ann Martin
a resident of Amador Valley High School
on Apr 28, 2009 at 6:11 pm

Maybe third time is the charm....it IS the inaccuracies/omissions in the information that PUSD posts that is the point.
I think the community deserves to be provided with accurate information, and that they should be able to ask, and get complete/accurate answers to any questions, budget or otherwise that are asked.
The point is about whether or not the solar panels will save the district money - it's about the district's credibility.


 +   Like this comment
Posted by Ann Martin
a resident of Amador Valley High School
on Apr 28, 2009 at 6:13 pm

Corecttion.
The point is NOT about whether or not the solar panels will save the district money - it's about the district's credibility.


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