It was one of the few surprises nestled in Gov. David Ige’s State of the State address Monday, under a section entitled “For the Sake of the Children.”
The state intends to use $100 million from an obscure funding source — initially meant to help make green energy infrastructure more affordable for underserved consumers — to finance efforts to cool 1,000 public-school classrooms by year’s end.
While at first blush we commend Ige’s creative thinking to help fix a longstanding problem within our school system, the governor will need to be much more forthcoming with his plans.
Following his address, Ige offered very few details about how the funding program would work, and critical questions remain unanswered.
“We are going to get this job done,” Ige said in his address. “To start, we will use $100 million of Green Energy Market Securitization funds to immediately install energy-efficiency measures and air conditioning units in classrooms where our children need it the most.”
He pledged that by using these funds, the state Department of Education (DOE) and its energy-efficiency partner, OpTerra, “can quickly access affordable financing for a large portion of its cost to air condition our classrooms.”
But the devil is in the details.
The governor’s plan highlighted the fledgling Green Energy Market Securitization (GEMS) program, which lawmakers authorized in 2013.
The following year, the Hawaii Green Infrastructure Authority (HGIA) was formed to oversee GEMS under a mandate “to make renewable energy investments accessible and affordable to Hawaii’s consumers, especially underserved communities, low- and moderate-income homeowners, renters and nonprofits,” according to the HGIA’s 2015 report to the Legislature.
The state issued bonds in November 2014, making $145 million available to finance clean-energy improvements through low-interest loans.
The bond is paid back through an electricity-bill surcharge of about $1.40, an amount not expected to increase under Ige’s plan.
GEMS is set up as a revolving fund, meaning consumers or nonprofits apply for low-interest loans for photovoltaic systems or other infrastructure and pay back those loans, plus interest, over time, or enter into power purchase agreements.
Ige’s office confirmed that the interest on the $100 million loan would be paid from general funds, meaning taxpayers foot the bill. The total cost is unavailable since final terms of the loan have not been determined — but it’s information that will need to be shared publicly.
Still unknown is whether the governor’s proposal to use GEMS funds to outfit schools with cooling systems is an acceptable use.
Under the state Public Utilities Commission’s September 2014 Decision and Order regarding the GEMS program, “heating, ventilating and air conditioning and related systems” are pre-approved eligible technologies, but just how the DOE fits into that picture remains unclear.
It seems unlikely that state government agencies were intended beneficiaries of GEMS; in any event, the PUC will have to determine if Ige’s plan is compatible with the program’s intent.
For the DOE, $100 million would be a welcome infusion of funds to tackle a problem that has plagued public schools for years — and one the DOE estimated would cost $1.7 billion to solve by air conditioning all schools.
Ige’s “proposal to cool 1,000 classrooms is ambitious and we look forward to working with him and the other state departments to accelerate heat abatement projects that move toward that goal,” DOE spokeswoman Donalyn Dela Cruz said.
OpTerra was awarded a DOE contract to perform energy audits at all schools and install photovoltaic systems under the DOE’s Ka Hei energy efficiency program.
There’s little doubt the company would benefit from the $100 million infusion; that in and of itself deserves public scrutiny.
Ige’s end goal of providing energy-efficient cooling systems in public schools is certainly commendable, and he should be lauded for coming up with a new way to meet that goal.
However, it’s just as important to support his plan with details, and those should be shared publicly sooner rather than later.
