A Megawatt Saved Is a Megawatt Earned (PDF-693kb)
A Megawatt Saved Is a Megawatt Earned
Los Angeles Unified School District Demonstrates Leadership in Rooftop Solar
The Los Angeles Unified School District serves 694,288 students, and employs 45,473 teachers and 38,494 staff—making it the second-largest school district in the U.S. and the second-largest employer in Los Angeles County. After L.A. residents passed a $7 billion school bond initiative in November 2008, the District had funding to launch an extensive construction and modernization program—an opportunity to not only upgrade their schools and facilities but also provide much-needed economic stimulus throughout the county.
One of the District’s first moves was an innovative plan to generate 50MW of renewable electricity by 2012 using solar power systems placed on the rooftops of schools and other facilities. The benefits would be numerous: saving $12.5 million on electricity costs each year for 20 to 25 years, generating economic stimulus and creating jobs, and providing educational opportunities for the District’s adolescent and adult students—from teaching about renewable power in the classroom to supporting a certified solar energy technician training program.
But LAUSD was also entering uncharted waters with the renewable energy project. The District lacked specific experiencewith renewable energy project finance and construction, and faced a range of real estate land use issues related to the use of its rooftops as a platform for generating electricity. Further, the District was served by two utilities, Southern California Edison and the L.A. Department of Water and Power, with differing regulations governing rooftop solar.
To be successful, the ambitious project would require careful risk assessment, extensive negotiations with the solar system provider, and a financing structure that would limit upfront cost—cost being of utmost importance given that each dollar of capital expense saved was another dollar available to the schools themselves.
LAUSD selected Pillsbury to advise on the critical first stage of the project: the financing and construction of 3.7MW on top of seven schools, and a large 1MW system atop a 400,000 square-foot warehouse. A Pillsbury team of Real Estate, Finance and Energy lawyers worked to structure two separate deals, one in which the District purchased power from the solar facility at favorable prices, and another in which it purchased the systems outright.
The result of this successful representation was made clear on a sunny day in April 2009. LAUSD students and officials gathered at Canoga Park High School in western L.A. for a ribbon-cutting ceremony celebrating the District’s first solar installation on a school rooftop—and demonstrating the District’s innovation and leadership in renewable energy use.