f/EPA
United States	Air and Radiation	DRAFT
Environmental Protection Agency	(6202J)	March 2003
ENERGY STAR
CHANGE FORTHE
BETTER WITH
ENERGYSTAR
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"We selected three
energy services
companies to work
under our guaranteed
energy performance
contracting program.
Rather than having
them finance the
project at a higher cost,
we decided to finance it
internally using existing
funding mechanisms."
Jaime G. Torrens,
Senior Executive Director,
Division of Energy,
Communications, and
Fiscal Management
¦ im
Financing Profile of Success
Miami-Dade County Public Schools
Miami-Dade County Public Schools—Stats at a Glance
Finance Vehicle
Tax-exempt lease purchase agreement (via master lease)
Program Director
Jaime G. Torrens

Financing
Total amount financed
$ 9.5 million

Investment per square foot
$3.80/sf

Financing term
10 years
Cost Savings
Simple payback period
7.9 years

Annual positive cash flow
$1.2 million

Total benefit over term
$16.6 million
Energy Savings
Annual energy savings
28 million kWh
Pollution Prevention
Annual C02 emissions
48 million lbs.

Car pollution equivalent
4,860 cars
FOCUS! This profile showcases how one of the nation's largest school districts
improves its facilities and maximizes energy savings by using an existing tax-exempt
master lease program to pay for a guaranteed savings performance contract.
Rationale for Efficiency
With a $61 million annual utility budget,
Miami-Dade County Public Schools
(MDCPS) must carefully manage their
energy expenses. This school district is
the fourth largest in the country and has
one of the most advanced third-party
financing programs for its 318 K-12
schools.
Financing Building Upgrades
in Miami-Dade County
Public Schools
In 1994, having seen other organizations
struggle to successfully implement energy
efficiency measures, the school district
decided to pursue the advantages of a
performance contract, while ameliorating
risks. Staff developed a plan to finance
energy upgrades through guaranteed
energy performance contracting (GEPC),
using three energy services companies
(ESCOs). Rather than finance projects
through the ESCOs, however, MDCPS
lowered the total project cost by financing
the energy upgrades through their existing
tax-exempt master lease. The lease was
already being used to procure other
capital equipment, such as buses, and to
fund new school construction and other
projects.
The Energy Savings are Real:
Miami-Dade County Public
Schools' Track Record
Overall, MDCPS have financed
approximately $500 million in purchases
through the master lease program since
1988, including $9-5 million in energy
efficiency measures. The $9.5 million
investment yielded operational cost
reductions of over $3.5 million in the first
3 years — excess savings that have been
used to enhance educational programs.
Creative Financing and
Resource Leveraging
The first or "pilot" phase of the district's
GEPC program included selecting
representative schools, issuing an RFP,
choosing the most qualified ESCOs, and
installing energy conservation measures in

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between organizations,
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and government, united in
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IN 2001 alone, ENERGY
STAR helped businesses,
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institutions, and consumers
save more than $6 billion in
energy costs while reducing
greenhouse gas emissions
equivalent to those from
about 12 million cars.
If your organization would
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energy efficiency, or how to
purchase energy-efficient
products, ENERGY STAR
can help.
Visit www.energystar.gov,
or call the ENERGY STAR
Hotline at 1 -888-STAR-YES
(1-888-782-7937).
18 schools. Once the individual projects were
completed, staff began monitoring their
performance and verifying that the expected
savings were being realized. MDCPS initially
worked with three ESCOs to promote
competition. Two firms, Siemens Building
Technologies and FPL Services, were retained
for the second phase.
Of all the district's efforts, the most innovative
and productive was its approach to structuring
guaranteed energy savings contracts. Rather
than use existing energy service agreements
offered by the ESCOs, district staff developed a
new contract that was applied to the three firms
involved. Because the contract requires that
savings be proven and documented rather than
stipulated, the ESCOs must perform monthly
monitoring and verification of actual energy
cost reductions—an activity that is included in
the overall cost of the project and paid for from
the savings. If the recorded savings are less than
the guaranteed amount, the ESCOs must
reimburse the school district for the shortfall.
Also, instead of a traditional performance bond,
Chief Financial Officer Richard Hinds and
Treasurer Eduardo Alfaro insisted that the
ESCOs post a letter of credit to ensure that the
district's capital investment was fully protected
in the event of under performance.
MDCPS verify compliance with the savings
guaranteed in three ways:
•	Staff compare actual utility bills to the base
year. Diverse adjustments are allowed for
changes in energy usage at individual
schools, such as expanded educational pro-
grams, increases in student population,
changes to the physical plant, and weather
normalization.
•	The energy management system installed at
each school detects significant changes in
operating schedules that may affect energy
usage.
•	If necessary, an inspector places monitors on
specific equipment onsite to verify actual
energy usage. (This has not occurred so far.)
Because of the size of the master lease, the
school district has issued Certificates of
Participation (COPs). The next COP issue
will sell for $128 million, of which about
$14.2 million is earmarked for measures to
improve the efficiency of lighting, air
conditioning, motors, and building envelopes.
Money will also be invested in energy
management technologies. Energy efficiency
improvements have become an increasingly
important part of the tax-exempt master lease,
rising from about 2 percent of the issue in
1994 to 11 percent in 2001.
MDCPS maintain a strict payback policy for
energy retrofits that helps keep financing costs
low. Investments in the GEPC program must be
recovered within 10 years, including financing
and indirect costs. Additionally, the district
bases its decisions on life-cycle cost accounting,
rather than simple payback, yielding a realistic
formulation of the overall value of the projects
over the contract term.
Lessons Learned from Miami-Dade
County Public Schools
•	The existing tax-exempt master lease allowed
the district to invest in energy equipment,
installation, and monitoring.
•	Separating financing from other components
of the guaranteed energy savings perfor-
mance contract lowered the school district's
investment costs.
•	Strict payback policies and life-cycle cost
accounting maximized savings and kept
finance costs low, which in turn will
allow for a progression of projects until
cost-effective measures are implemented
in all 318 schools.
03/31/03

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