$$ Billion Dollar Green Challenge UO Financial Stewardship Small Group Project Presentation April 2013

Billion Dollar Green Challenge  Overview of the program  Case Studies from participating institutions  University of Oregon’s project  Recommendations  Q & A

Program Overview The Billion Dollar Green Challenge Participation:  39 Institutions: Colleges, universities and other non-profits  $68 million committed to date  36 distinguished member advisory council

Program Overview The Billion Dollar Green Challenge Goals: invest a combined total of one billion dollars in self-managed revolving funds that finance energy efficiency improvements

Program Overview The Billion Dollar Green Challenge Process: Green revolving funds invest in energy efficiency projects to reduce energy consumption on campus and reinvest the money saved in future projects.

Program Overview The Billion Dollar Green Challenge Proposed Benefits:  Reduction of carbon emissions and resource consumption  Financial savings  Creating re-investment funding  Educational opportunity – research/teaching  Foster culture of sustainability and resource efficiency  Additional membership benefits

Accounting Loan vs. Accounting Model  In 2011, Sustainable Endowments Institute suggested two accounting categories  For the 2012 survey, schools placed their funds into one of those categories

Loan Model  The project applicant agrees to borrow from the fund  Funds are transferred to the project proponent’s budget  Loan repayment typically managed through budget transfers  Twenty-one institutions report they use the loan model

Accounting Model  Funds are transferred to the project applicant  Repayment is handled through transfer of funds to the GRF From centrally-managed budget where savings were generated Example: from a utility budget  Handled by the central finance/budget office  Used where projects create operational savings in budgets that are managed centrally  Thirty-nine funds use the accounting model

Estimating and Verifying Project Performance  Estimated engineering data 10 schools use this method  Individual building meters 7 schools use this method  Combination meter/engineering data 38 schools use this method

Case Studies  Lane Community College - Accounting Initial investment 2006, $122,000 o Focused on conservation creating Energy Carryover Fund o realized savings when current year electricity and natural gas expenditures are less than current year budget. o rebates and other incentives for energy-focused projects deposited into the fund

Case Studies  Oregon State University – LOAN model o Initial investment 2010, $1,000,000 o SERLF – student run, student funded* o Provides local source low interest financing to accelerate sustainable energy projects on the OSU campus. o provide student learning, demonstrate environmental leadership and economic benefit. o hands-on education for graduates studying energy efficiency and renewable energy. o The minimum funding per project $5,000. *OSU Student Sustainability Initiative (SSI) Fee Board

Case Studies  California Institute of Technology – Accounting Model  Initial Investment: 2008, $25,000  The Caltech Energy Conservation Investment Program (CECIP) funded by Institute’s endowment, (via the Capital Revolving Fund) then reimbursed from avoided utility costs  energy conservation projects must have a return on investment greater than 15%, exhibit verifiable savings via metering and must not be part of a planned capital project.  allocation has grown to roughly $8,000,000, which at its projected peak will finance over $30,000,000 in energy conservation measures.  project selection, detailed training, a rigorous system of checks and balances and an emphasis on measurable results, effectively embeds energy conservation into the organization. *OSU Student Sustainability Initiative (SSI) Fee Board

Case Studies ROI from participating institutions Return on investment between 20 percent ( Georgia IT, UNC Chapel Hill ) and 57 percent ( Boston U ). George Washington U Green Campus Fund investment: $141,000; upgrade the lighting (2010); $100,000/year savings. Projected lifespan: 8 years, original investment will generate ~$800,000 savings = reinvestment

The Oregon Model for Sustainable Development  Net Zero Increase in Campus Energy Use from New Development Increased energy consumption from new construction… …energy- saving mitigation in existing buildings …offset by…

The Oregon Model for Sustainable Development  Affect on Campus Wide Energy Costs Increased utilities costs for new construction Included in operating funds budgeted for new facilities + Reduced utilities costs due to mitigation in existing building Reduces spend on utilities for existing run rates -

The Oregon Model for Sustainable Development  Central Energy Fund (CEF) set up to pay for energy-saving mitigation in existing buildings  Funded by new construction project surcharge and Central Administration  Managed by Campus Operations

The Oregon Model for Sustainable Development  Balancing the Energy and Cash “Banks” Campus Wide – How it’s supposed to work Energy Central Energy Fund New Construction Energy Saving Mitigation 10% of CEF is from construction projects/90% from Central Admin

UO’s First Energy-Saving Mitigation Project Under the Model  Lighting project to replace T12 lamps with T8 lamps in 45 buildings  Anticipated savings based on EWEB’s engineering model of 1.41 megawatts per year .10 per kilowatt savings = $141,000/year

The Oregon Model for Sustainable Development  Problems with the application of UO’s Model as a Green Revolving Fund Energy Central Energy Fund New Construction Energy Saving Mitigation Central Admin funds borrowed from Central Power Station Depreciation

Funding Recommendations  Create a true Revolving Fund seeded with funds dedicated for that purpose New Construction Energy Saving Mitigation Energy Project Funds Grants or Gifts Central Admin

Fund Management Recommendations  Identify cost savings  Utilize estimated savings established by experts, consultants, or product information o Reduces the challenges caused by inconsistent availability of infrastructure o Creates a cushion to protect against under- performing projects and rate fluctuations  Determine payback period and amount

Fund Management Recommendations  Repayment Model o Department Projects - Use the Accounting Model

Fund Management Recommendations  Repayment Model o Auxiliary Projects - Use the Loan Model

Conclusion – Commit!  Enhance the Triple Bottom Line

Questions? Thank you for your participation in our presentation  Kassia Dellabough – Director, A&AA PODS  Suzanne Dodge – Accountant 2, Campus Operations  Terri Libert – Accountant 2 – Law School  Molly Lockhart – Property Control Coordinator, Business Affairs  R. Kevin Marbury – Director, Physical Education & Recreation  Lynne Romans – Public Relations Specialist - Biology  John Salmon – Associate General Counsel, General Counsel For copies of the executive summary For program info see