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Climate Policy Initiative takes on Prop 39 implementation

In a matter of weeks, Governor Jerry Brown and state legislators will finalize a plan to spend $2.75 billion in new revenue from the passage last November of Proposition 39 – a ballot initiative to fund energy efficiency and renewable energy projects in public buildings.  While there has been widespread disagreement between the Governor’s office and legislative leaders as to how best to spend the new funds, the general consensus is that schools should be the primary recipients.

As the program details are being finalized, experts at Climate Policy Initiative (CPI) have released a report with key findings and policy recommendations to help maximize the program’s impact in California’s schools.

The study showcases findings from CPI's energy efficiency finance model and from interviews with school districts across the state on their experience making energy efficiency upgrades. Three crucial insights and recommendations from the study offer promise in making an effective Prop 39:

1) Schools are interested in making energy efficiency investments yet face a relatively ubiquitous barrier; a lack of technical assistance in selecting energy-saving projects and the best options to finance them. Prop 39 should help.

2) Presently, different districts have different levels of access to financing for energy efficiency projects – in the form of bonds, public or private loans, or no access at all – and Prop 39 should be used flexibly to augment, not replace, the existing financing options in each district.

 3) Results from CPI’s finance model show that deeper energy upgrades become possible when Prop 39 funds supplement existing finance options and provide financial leverage for projects with higher up-front costs or longer payback periods.

The Governor and leading legislators in Sacramento have proposed to spend the bulk of Prop 39 revenue --up to $550 million annually over the next five years-- in K-12 schools, and seem to agree that districts should receive some kind of technical assistance. However, the method for distributing Prop 39 funds remains contentious. Governor Brown’s  May budget revisions continue his push to distribute all funds in direct grants to districts on a per-pupil basis--in amounts as low as $15,000 per district--a fraction of what a deep retrofit at a single school could cost. Leading legislators have resisted the Governor’s proposal and call for leveraging the funds to extend their life beyond five years and to encourage the deeper energy savings schools need.

Across the country, K-12 schools spend $6 billion on energy costs each year, an operating expense second only to personnel costs. Investments that save energy and cut monthly utility bills offer schools the chance to spend limited cash to save threatened curricula, retain key faculty and staff, or to purchase teaching supplies.

In addition, improved student health and learning stem from efficient, well-lit and ventilated classrooms and facilities. These improvements often require the deep retrofits that leveraged Prop 39 funds could deliver.  

In the words of Dian Grueneich, former Commissioner at the California Public Utilities Commission and a national energy efficiency expert, “The report calls for technical assistance and prudent financing strategies to help all schools get the greatest energy savings from Prop 39.” 

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