Energy and Climate Revolving Fund
CU facility managers have a new way to stretch dollars. The Energy & Climate Revolving Fund (ECRF) provides funding for energy efficiency and carbon reduction projects in CU facilities—and the fund has already paid back significant savings for campus budgets.
The fund works by funding energy and climate upgrade projects that save operational dollars—and the fund is paid back out of the savings. Projects with short term (<5 years) paybacks can be bundled with projects with long term paybacks—and the whole package can be funded and paid back in five years.
Facility managers can stretch their dollars by providing some funds for a project (a match), the Environmental Center has some additional grant funds available for CUSG projects, and the ECRF can provide gap funding to complete the project. (See examples of funded projects below)
ECRF is staffed and administered by the CUSG Environmental Center Energy Program Manager, but funding decisions are made by the ECRF Board of Directors that include facility managers, Facilities Management Office of Sustainability Director, Environmental Center Director, faculty appointed by the Provost, SOFO Director, CUSG Finance Board Chair, member of Legislative Council, two Students-At-Large.
Projects will be considered that involve infrastructure changes or behavioral change efforts that result in the reduction of energy use, increase in renewable energy supply, or reduction of carbon emissions. Facilities not owned and operated by the University of Colorado are not eligible.
All loans must be repaid in full within five years. Multiple project loans may be bundled together in order to achieve an ROI of five years or less. The applicant for ECRF funding is responsible for determining the project’s energy and cost savings to determine payback potential.Examples of high ROI projects include lighting upgrades, insulation, and HVAC enhancements.
An example of a bundled payback calculation is below. The bundled project would qualify, whereas Project A would not have qualified by itself because of the long payback. However, the savings combined for both projects yields a faster payback under five years.Cost of Project Savings Per Year Payback
Project A: $30,000 $5,000 6 years
Project B: $50,000 $20,000 2.5 years
Bundled A and B: $80,000 $25,000 3.2 years
Applicants may seek funding of a up to $20,000 for feasibility studies that support energy and climate projects from the fund. Feasibility study loans must either be paid back within two (2) years or rolled into the repayment schedule of a funded ECRF project that results from the feasibility assessment. The Board must vote to fund feasibility studies by a two-thirds majority of those present and voting.
An additional consideration in project eligibility is whether the project involves students in conceptualization, design, implementation, monitoring, or follow-up education. While not a prerequisite for eligibility, student involvement enhances a project’s fundability when all other factors are equal.
Applications and Board Approval
Fund Allocation and Repayment
Approved projects will receive funding upon the completion of the ECRF Repayment Agreement. The Agreement will stipulate the repayment schedule, annual dollar values (including administrative costs associated with fund management and a discount rate) and any additional repayment requirements. Annual repayments will be based on expected (estimated) annual cash flow generated by energy savings from the project.
The repayments thus obligated under this legislation are considered ‘unduckables’ for the cost centers until the Repayment Agreement is fulfilled.
The discount rate used to determine payments to the Fund shall be stipulated by the Director of SOFO and shall be based upon the opportunity cost of the funds not being invested by the CU office of the Treasury. The only exception to this rule is if a third party vendor identifies a more appropriate discount rate for a specific project.
For example, if a $100,000 project with a five year ROI is funded, the Repayment Agreement would state the repayment schedule to fulfill the total owed (estimated): $100,000 principal (payments discounted at an 8% rate and repayment over 5 years) yields a payment of $25,045.60 per year. (This will grow the fund at a slight rate so that it will not lose purchasing power because of inflation.)
In January of 2007 CUSG became the first student government in the nation to commit to a climate neutrality plan for student-run buildings. To help accomplish that goal, the CUSG passed bill 66LCB10, creating the Energy and Conservation Revolving Fund (ECRF). The ECRF provides funding tools and sustainable fiscal resources, received from the Supplemental Operational Reserve (SOR), that can be made available so that student-run buildings can proactively reduce their energy consumption, operating costs, and climate impact.
In 2009 CUSG passed legislation to allow for general fund or auxiliary units to apply for ECRF funding. These projects must include significant in-kind or monetary match funding. The nature and extent of the matched funding must be sufficient to win two-thirds approval of the ECRF Board. In no case may projects in general fund or auxiliary units receive 100% funding from ECRF. Some match funding must always be part of the project.
The revolving fund envisioned in this legislation is based on similar funds already successful at other institutions and government agencies. The revolving fund makes low interest loans for high return-on-investment energy and climate projects—and the fund is paid back from the savings accrued by those projects.
Previously Funded Projects
- Recreation Center HVAC System Tuning
- UMC Energy Efficiency Bundle, including occupancy sensors, ceiling insulation, LED lights, temperature monitoring for refrigeration
- Recreation Center PRV (Pressure Regulating Valve) Station Rebuild
- Recreation Center Builiding Automation System Upgrade to Andover