As Superintendent Todd Alexander anticipates a continued decrease in state funding for Wayne County Public Schools, he’s always looking for ways to cut costs.
So, when he found out he could supplement the school district’s power with solar panels and save millions in electricity costs at no upfront cost, he pursued it.
Wayne County Public Schools is now estimated to save nearly $6.5 million over the next 25 years.
But Sen. Craig Hart, who represents part of Wayne County, offered a bill during West Virginia’s legislative session that would prevent other schools and governmental institutions from doing the same.
“If you’re not getting a better deal, I don’t see any reason for them to be in that contract,” Hart said during a March Senate Energy Committee meeting. “I don’t think a school is a good place to make a political statement about your utilities and whatnot.”
Sen. Scott Fuller, R-Wayne, also threw his support behind the legislation, arguing that supplemental power agreements don’t support the coal and natural gas industries.
“It just seems to me that we are doing something that is counterproductive for the state of West Virginia,” Fuller said.
If schools are allowed to use green energy, “then we’re fighting ourselves,” Fuller said.
The agreement between Wayne County schools and Solar Holler, a solar company based in Wayne County, is known as a power purchase agreement. The company pays to put solar panels on schools, and in exchange the school system uses the power generated, paying less than it would cost from the utility.
Hart’s bill would have limited such agreements for any public entity, including schools, to a maximum of five years with an option for renewal.
Typically, contracts fall between six to 25 years. It takes a while before developers fully recoup the costs they invested into the agreement, said Heather Ransom, marketing and residential sales director for Solar Holler.
So, a five year contract maximum “essentially eliminates” these agreements.
The power purchaser — for example Wayne County Schools — “didn’t have to foot the bill for any of the upfront costs. Someone, however, did. So that’s on the side of the developer and in order to finance it, five years just won’t cut it,” she said.
During the committee meeting last month, Hart, R-Mingo, said that part of the idea behind the bill came from what he thought were excessive rate increases built into proposed contracts he had reviewed. He also said that such long-term contracts could be risky because no one knows what electricity rates will look like so far in the future.
“A school could be entering into a 10, 20, however-many-year contract, and really be coming out the loser in the deal,” said Hart.
However, in these agreements yearly power rates are pre-determined for the length of the contract and guarantee some level of savings, Ransom said.
She also said that while the rates do include increases over the length of the agreement, they are lower than the average rate hike of a utility.
In the case of Wayne County, the school system is guaranteed a minimum 3% savings each year of its contract. And if that is not met, the school system can get out of the contract.
Ransom said that the $6.5 million the school system is estimated to save on its power bills is likely to be much more as electricity rates continue to increase.
During the March meeting, Sen. Ben Queen, R-Harrison, said he was worried about a school system in his district.
Calhoun County Schools was the first school district in the state to sign this type of contract. The school system is estimated to save more than $700,000 in power costs over its 25-year agreement with Secure Solar Futures.
“I can tell you, $740,000 is a lot of money in Calhoun County, even if it is over 25 years,” said Queen.
The bill would also apply broadly to public entities. Sen. Glenn Jeffries, R-Putnam, asked if they could narrow the bill to only apply to schools. He said he was concerned about how it would impact the various municipalities in his district that have similar agreements.
While he said that he could live with that, Hart countered, asking if they could grandfather in all public entities except for schools with existing contracts.
The bill did advance out of the Senate Energy Committee to be voted on, but was parked in the Senate Rules Committee, where it stayed until the legislative session ended.
Hart later said in an interview that he planned on amending the bill if it ever left Senate Rules to narrow the scope so it only applied to school systems.
“We want to be conservative as we can be with the Board of Education’s money,” he said. “This can always be revisited another time, but we want to make sure that the schools are not taken advantage of.”
Alexander, the superintendent, expects less state funding for Wayne County schools in coming years. School enrollment is going down around West Virginia and is expected to continue to decline over the next decade.
“We try to look at every avenue possible to save money,” he said.