How to save campus billions

For the first time last year, America's 3,250 colleges and universities spent more than $3 billion for energy. This bloated bill was especially hard for them to take then, when their slice of the federal pie had just been drastically cut and inflation was gnawing away at what was left. It was enough to pay the salaries of 129,000 full-time faculty. It was equal to one and one-half times what US campuses spend for libraries each year, and more than is spent on scholarships and student services.

Much of that energy bill was unavoidable. But the Higher Education Energy Task Force estimates that at least 20 to 25 percent needlessly went up in smoke. Most campuses up to now have just taken a piecemeal approach to energy conservation. Many administrators lack the expertise to implement a systematic, comprehensive energy management plan.

Realizing this, the task force last year began to implement a demonstration College and University Energy Management and Financing Program at a dozen campuses from New Hampshire to California. Funded by the John A. Hartford Foundation of New York City, the program is expected to save the 12 campuses as much as $10 million a year, or one-fourth of their total energy costs of $40 million.

With the ultimate aim of having the system implemented nationally, program officials chose a representative cross section of campuses, large and small, both public and private, in varied climatic zones. At the end of the demonstration period, the comprehensive program will be transferred to other colleges nationwide through various publications and workshops for campus administrators.

The program effects savings first through an organizational structure and planning model for both the physical plant department and the institution as a whole, to coordinate campus energy management decisions. Then, a computerized energy information management system is put into place to provide campus administrators with data on consumption, patterns of energy use, and conservation opportunities and their cost.

At the same time, program officials are developing cost-effective options for financing energy conservation measures. There are many financing mechanisms common in business that higher education has rarely used, such as leasing energy-saving equipment or obtaining a loan from a financing house. Properly structured, monthly payments would be less than the monthly energy savings, providing an immediate positive cash flow to the campus.

Private individual and institutional investors can also invest in energy efficiency on the campus, using tax credits not available to the institution. Colleges can even create for-profit corporations under their control that can act as an outside agent to obtain debt and equity financing, act as a lessor or guarantor of a campus debt, or provide secondary security for a loan.

Campuses can afford the expensive equipment they need to achieve maximum energy savings. In fact, they can't afford not to make these investments in their future economic well-being. They can't afford to continue spending dollars for wasted BTUs rather than on libraries, lab equipment, and faculty salaries.