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Weber State Funds Its Entire Decarbonization Program with a $5M Internal Revolving Loan and Has Generated $3.1M in Annual Savings
Weber State University set a goal of carbon neutrality in 2007.
Justin Owen, Interim Director of Plant Operations, is responsible for the energy usage at Weber State in Ogden, Utah, a 3-million-square-foot campus with about 28,000 students. When the university decided to pursue its carbon-neutral commitment in earnest, Owenâs team passed on performance-based contracts from ESCOs and low-interest loans and instead borrowed from the universityâs own cash management pool. A $5 million internal revolving line of credit. Energy projects generate savings, savings pay down debt, free up capital for more projects, and the cycle compounds. Fifteen years in, the program has produced $3.1 million in annual savings, a 51% reduction in utility costs, 57% of campus electrified, and a credible path to carbon neutral by 2040.
The financial model works because of two rules set by the administrative VP at the outset: savings must be documented, and savings must be real. Owen doesnât weather normalize his reported savings, a deliberate choice grounded in how his CFO thinks. The universityâs utility budget is calculated at $2 per square foot across 3 million square feet, totaling $6 million annually. This budget allows the energy and accounting teams to maintain credibility with one another. If Justinâs team believes theyâve saved $3M in energy, the $6M utility budget account better have $3M in it at the end of the year.
The programâs success relies on the bridge between financial communication and engineering communication. Owenâs point is that energy engineers who canât translate their work into accounting terms will lose their CFOs. Weather normalization makes engineering sense, but the CFO doesnât think in weather-normalized dollars. Owen instead negotiated a risk-sharing arrangement: the energy program absorbs the cost of weather variability and changes in space use. At the same time, the administration has agreed to adjust the utility budget upward as electricity and gas rates rise and the campus grows. Both sides of that bargain are easy to measure and document objectively, which is what makes the arrangement durable.
The savings compound in a way that makes the math increasingly attractive over time. A lighting retrofit from 2012 is still generating savings today. Owen augments capital improvement dollars the university would be spending anyway, redirecting energy program funds toward higher-impact investments. When a chiller reaches the end of its life, the program steps in and installs a ground-source field there instead. The $1.7 million solar array beside Lindquist Hall was funded entirely from energy savings. A 10 MWh battery storage system is currently under construction and is also funded by energy savings.
Owenâs advice to energy managers at other institutions: the program only works if the administration trusts the numbers. Building that trust means learning to speak the CFOâs language before asking for the first dollar.
â
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Weber State University set a goal of carbon neutrality in 2007.
Justin Owen, Interim Director of Plant Operations, is responsible for the energy usage at Weber State in Ogden, Utah, a 3-million-square-foot campus with about 28,000 students. When the university decided to pursue its carbon-neutral commitment in earnest, Owenâs team passed on performance-based contracts from ESCOs and low-interest loans and instead borrowed from the universityâs own cash management pool. A $5 million internal revolving line of credit. Energy projects generate savings, savings pay down debt, free up capital for more projects, and the cycle compounds. Fifteen years in, the program has produced $3.1 million in annual savings, a 51% reduction in utility costs, 57% of campus electrified, and a credible path to carbon neutral by 2040.
The financial model works because of two rules set by the administrative VP at the outset: savings must be documented, and savings must be real. Owen doesnât weather normalize his reported savings, a deliberate choice grounded in how his CFO thinks. The universityâs utility budget is calculated at $2 per square foot across 3 million square feet, totaling $6 million annually. This budget allows the energy and accounting teams to maintain credibility with one another. If Justinâs team believes theyâve saved $3M in energy, the $6M utility budget account better have $3M in it at the end of the year.
The programâs success relies on the bridge between financial communication and engineering communication. Owenâs point is that energy engineers who canât translate their work into accounting terms will lose their CFOs. Weather normalization makes engineering sense, but the CFO doesnât think in weather-normalized dollars. Owen instead negotiated a risk-sharing arrangement: the energy program absorbs the cost of weather variability and changes in space use. At the same time, the administration has agreed to adjust the utility budget upward as electricity and gas rates rise and the campus grows. Both sides of that bargain are easy to measure and document objectively, which is what makes the arrangement durable.
The savings compound in a way that makes the math increasingly attractive over time. A lighting retrofit from 2012 is still generating savings today. Owen augments capital improvement dollars the university would be spending anyway, redirecting energy program funds toward higher-impact investments. When a chiller reaches the end of its life, the program steps in and installs a ground-source field there instead. The $1.7 million solar array beside Lindquist Hall was funded entirely from energy savings. A 10 MWh battery storage system is currently under construction and is also funded by energy savings.
Owenâs advice to energy managers at other institutions: the program only works if the administration trusts the numbers. Building that trust means learning to speak the CFOâs language before asking for the first dollar.
â
Register for the next Nexus Labs event.
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This is a great piece!
I agree.