Jackson schools consider new cost-cutting approach

Friday, November 29, 2002

A new program sponsored by the Missouri School Boards Association may lower high-energy costs at Jackson and other school districts across Missouri by as much as 8 percent.

With 10 schools and numerous buildings to heat at each school, the Jackson School District paid more than $107,000 last year in natural gas expenditures, and that was during a mild winter. In 2000-2001, the district paid more than $213,000 for natural gas.

The average homeowner in Cape Girardeau County pays $103.58 monthly during the winter season of November through March, said Mike Cleary, spokesman for AmerenUE.

Multiply that amount by about 150 and you'll have the average winter gas bill paid by the Jackson School District -- $16,000 every month between November and March.

At their Dec. 10 meeting, the Jackson School Board will decide whether or not to join an energy consortium program that will allow the district to save a projected $37,000 in natural gas expenditures over the next three years.

By joining the consortium, the district will take part in a pilot program that allows them to purchase natural gas aggregately with schools across Missouri.

Among the 40 schools already signed up for the program are the Chaffee, Sikeston and Charleston school districts.

The Cape Girardeau School District also considered taking part in the energy consortium. However, chief financial office Rob Huff said the district decided to sit out the first year and evaluate the program because of the initial fees involved.

Some downsides

There are a few downsides to the program. According to assistant superintendent of finance Jim Welker, the district is actually expecting to lose around $10,000 in the first year of the program because of a one-time pipeline capacity release fee.

Also, only gas meters that have a certain amount of usage qualify for the program. Those meters that do not qualify will remain on the district's regular plan with Atmos Energy Corporation, headquartered in Dallas, Texas.

Overall, Welker said the savings in the second and third year of the program should overshadow those drawbacks.

"This appears to be something that would be a benefit and a cost savings to the district," Welker said.

According to Jim Cherrington, associate director for school and business services with MSBA, that's exactly what the program is designed to do.

"With the state Missouri is in now, we're constantly looking for ways for schools to save money and make better use of their resources," Cherrington said. "This a step in that direction."

Cherrington said the program is low risk for school districts. There's a clause in the agreement that allows districts to revert back to their former natural gas plan if problems occur.

Cherrington said more than 40 schools have signed up for the program, which is slated to begin Jan. 1, 2003.

The consortium program originated on a voluntary basis three years ago. The participating gas companies limited the schools involved to the 10 largest in the state.

According to Cherrington, those districts saved a combined $600,000 in natural gas costs during the three-year period.

This summer, Gov. Bob Holden signed into law House Bill 1402. The bill allows schools to make aggregate purchases of natural gas and pipeline transportation services through contracts negotiated by a nonprofit school association. The program is limited to public schools for the first year, open to all schools for subsequent years, and expires on June 30, 2005.

Cherrington said the MSBA fully anticipates that after the three-year experimental program is over the Missouri Legislature will make the program permanent.


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