Thursday, April 5, 2012

SEI Suspends Green Report Card


A few weeks ago we received a new file from a company seeking to enforce a lien against the University of Kentucky for non-payment on an Energy Savings Contract.  Investigation revealed the UK Board of Directors signed an agreement with a company that promised to provide energy saving upgrades / remodeling to 61 buildings on campus and promised at least $25 million in savings on utility costs over the life of the 12 year contract.  Interestingly, the entity agreed to put its money where its mouth was in the sense that it agreed to be paid out of the savings over the 12 year period.

Why the entity that hired us to file the lien has not been paid is not clear, and the entire contract may be completed with flying colors before all is said and done.  I am posting the information here as a cautionary tale.  I have long advocated contractors and designers negotiate for compensation tied to reduced energy consumption and agree to take a portion of such savings in compensation over time.  That compensation model depends, however, on the delivery of a high performance building and the ability to accurately predict and track the performance of the building over time.  In other words, don't agree to such a compensation model unless you are delivering BIM enabled infrastructure that is superior, energy performance wise, to the infrastructure you contracted to replace.

With that information as back ground I'm linking to an article from the Chronicle of Higher Education reporting the demise of the Green Report Card produced by the Sustainable Endowment Institute.  I'm not sure why the Green Report Card will no longer be published but I suspect it has a lot to do with the fact that the report card measures / rewards the use of green / alternative energy which institutions of higher education found to be far more expensive that fuel oil, natural case and coal.  In other words alternative energy solutions were not sustainable.

There is a reason Solyndra failed and other solar companies are failing in droves.  Alternative energy costs too much and cannot compete with energy derived from fossil fuels.  Further, governments around the world have given up on subsidizing those programs.  Spain stopped subsidizing solar energy and the market there  collapsed.  The market for Carbon Credits / Carbon Offsets has collapsed in Europe and Canada withdrew from the Koyoto Protocol.  The US Senate, of course, refused to put the gun to the head of the US economy in the first place.  Universities, like governments, have budgets to meet.  Arithmetic is cruel and unforgiving discipline and it ruthlessly dictates the long term failure of socialist policies; you will, eventually, run out of other peoples money.  The recession and the slow recovery here in the US accelerated that phenomenon and entities like the Sustainable Endowments Institute are coming to grip with that reality.  Frankly, its long past time the environmental movement put adults in charge.

SEI Suspends Green Report Card


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James L. Salmon, Esq.
Collaborative Construction
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3 comments:

Allan @ Chain Cables said...

The contractor should get the $25 million and any additional savings recorded for the 12 years as "damages". Only a school would try to worm out of a bill that is suppose to save money.

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Michael Bordenaro said...

James, Environmental Leaders have stepped up. The Sustainability Officials at Universities and Colleges have replaced the Green Report Card with their own STARS system that more accurately reflects their conditions and concerns. You wouldn't drive the first car that was made, so it is not surprising that the first University and College sustainability assessment vehicle is being replaced by a newer model. Environmentalists are doing a very good job.