Plan to save on energy at schools lags 7-year contract with Honeywell started in 1993; $800,000 short of goal; Company pays difference when goals aren't met


Two years into a seven-year, $10 million contract with Honeywell Corp. to conserve energy in 80 schools, the Board of Education has yet to realize the savings originally envisioned.

Savings have fallen short of what was anticipated by $800,000 -- including more than $562,000 in fiscal 1995 -- and are expected to come up short again for the current fiscal year.

Under terms of the contract, Honeywell must pay the school system the difference if savings fall short of projections.

"They are writing the checks. Where it falls short, they are writing the checks," said Ronald L. Beckett, associate superintendent for business and management.

Honeywell executives are to meet Monday with school officials to deliver the check for 1995, reaffirm their commitment to the school system and renegotiate several points in the contract.

The contract called for Honeywell to install energy-saving devices from 1993 to last year. The school system took out a loan to pay Honeywell $10 million and was to repay it with savings on utility bills.

Most of the savings have come from more-efficient lights and thermostats that can be set from a remote site, said Ralph A. Luther, school facilities management chief.

Why less money than expected has been saved is a matter of speculation.

"Weather certainly has something to do with utility expenses," Honeywell spokeswoman Lynne Warne said, alluding to mild 1995 temperatures.

But the weather could not explain everything.

"They did miscalculate, as best we can tell," Mr. Beckett said.

Honeywell promised that $1.9 million would be saved in fiscal 1995, and the school system saved $970,000, according to an energy summary.

About $400,000 of the shortfall resulted from from changes within the school system.

For example, Honeywell figured that some of the money would be saved at the old 17,000-square-foot Solley Elementary School.

The new Solley, which opened this school year, is more energy-efficient but is four times as big as the old school and costs more to run, Mr. Luther said.

System-wide, heating bills were predicated on having the boilers bring each school up to 68 degrees a half-hour before students arrived. But elementary teachers often arrive an hour before their pupils, so the heat was turned on earlier.

"In a perfect world, all that savings would go to pay off that loan," said Gregory V. Nourse, school finance chief. "But it hasn't worked that way."

Because of the shortfall and the under-funding of utility accounts, the school system has had to dig into other accounts to pay gas and electric bills and repay the loan, said Walter George, supervisor of operations.

"We are now behind the eight ball," he told the school board this week.

In the long run, school and Honeywell officials say, the contract will pay off. At the end of the contract, the school system is supposed to be saving about $2 million a year in utility costs.

And if savings still are not that high?

"Whatever the savings are, they are our savings," Mr. Beckett said. "Our energy usage is going down. It is sort of clouded by the fact that the projection was so optimistic."

"The county will definitely come out ahead," Mr. Nourse said. "Two million [dollars] of payments a year will go away. But that is a benefit you get at the end, which everybody knew about."

Copyright © 2019, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad