YSU adopts measures for 10 years

Annual energy cost savings are expected to more than cover the project expense.
By HAROLD GWIN
Vindicator education writer
YOUNGSTOWN -- Youngstown State University will spend nearly $11.5 million on campus energy saving measures, paying off that expense over 10 years through an estimated $15.7 million in energy savings and reduced operating costs.
The $11.5 million includes borrowing $9.7 million for actual project costs plus just more than $1.4 million in interest charges over the life of the debt.
The YSU Board of Trustees approved the financing plan Wednesday with Chase Equipment Leasing Inc. of New York.
It will be a lease-purchase arrangement at an interest rate expected to be between 3.5 percent and 3.6 percent, with Chase buying and having the equipment installed and YSU paying for it over a 10-year period.
The debt is secured by a university pledge to use revenues from any source to pay off the debt except any money appropriated for the university by the state general assembly.
YSU's utility costs reached $4.2 million in fiscal 2005, which ended June 30, and are expected to reach $5.3 million a year by 2015 unless energy saving and more efficient equipment is installed now.
Favorable scenario
Estimates show the energy-saving project should more than pay for itself.
YSU expects to realize annual energy savings ranging from $1.3 million in the first year to $1.7 million in the 10th year. Operational costs are expected to be down by $85,000 each year.
Those combined annual savings will be more than enough to cover the projected $1.1 million annual debt payment to Chase as well as the cost of an annual service agreement to maintain the equipment.
Those annual service fees are expected to range from $140,000 the first year to $190,000 in the 10th.
The bottom line is that university estimates show that, after all expenses, YSU will have netted some $2.6 million in energy-cost savings by the end of the 10th year, a savings that translates into positive cash flow for the university.
The best part of the entire arrangement is that the university is guaranteed annual energy-cost savings of more than $1 million a year, YSU officials say.
A safety net
Johnson Controls Inc., named by the trustees in September to design and implement the energy-savings package, made that guarantee. Should the savings fail to materialize as predicted, Johnson Controls is committed to making up the difference through cash or services to the university.
The goal is to control heating, cooling and lighting costs while upgrading the systems that provide those services.
Among other things, the work includes a new chiller installation to cool water for the air-conditioning system, lighting improvements, hot-water improvements and replacing various heating and other equipment in all 40 buildings on campus.
There also will be a network computer power management system as well as computerized maintenance management. The goal is to have the improved system fully functional next summer.
gwin@vindy.com