(By Balaseshan) NextEra Energy Inc. (NYSE: NEE), which provides retail and wholesale electric services, said its unit has launched a renovation project worth $7.5 million in the Mt. Pleasant Independent School District.
The Mt. Pleasant Independent School District (ISD) partnered with energy savings specialist NextEra Energy Solutions to upgrade lighting, replace aging HVAC equipment, lower operating and maintenance costs, and deliver a significantly improved educational environment for Mt. Pleasant students and staff.
The $7.5 million project, which will benefit almost all of the district's buildings, produces a positive cash flow in each of the 15 years of the contract term. The district will see more than $500,000 per year in savings, thus exceeding the total cost of the project. Construction began in April 2012 and is scheduled to be completed by the summer of 2013.
Working closely with the District, NextEra Energy Solutions created a multi-phase plan under which renovations would be done using a performance contracting agreement. Over the performance period of the contract, savings are guaranteed by the implementation of specific energy conservation measures (ECMs).
Additional savings will come in the form of rebates from the local utility and by taking advantage of a Department of Education loan program. NextEra helped the school district apply for utility rebates as well as a funding mechanism known as Qualified Zone Academy Bonds (QZAB).
The federal QZAB program enables qualifying schools to borrow at nominal interest rates (as low as zero percent) for costs incurred in connection with improving energy efficiency, implementing renewable energy measures, and teaching STEM (science, technology, engineering, and math) academic curricula.
As part of the QZAB process, NextEra committed to make an in-kind contribution of products and services equal to 10% of the overall project cost. This included two 10-kW solar arrays that not only produce electricity, but also provide a teaching platform to support STEM curricula.
The work at Mt. Pleasant ISD encompassed over 20 buildings, including elementary, middle and high schools as well as special education, administration, warehouse, and sports facilities. The total savings result from lower energy costs, reduced maintenance expense, and capital cost avoidance over 15 years.
NEE is trading up 0.34% at $70.79 on Tuesday. The stock has been trading between $58.57 and $72.22 for the past 52 weeks.