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Business Officer Magazine
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Federal File

Coverage of legislation and regulatory activity that affects higher education

By Liz Clark

Fostering Energy Efficiencies, Renewables in Higher Education

Earlier this year, the National Association of College and University Business Officers, Second Nature, and the American College and University Presidents' Climate Commitment (ACUPCC) published the white paper, "Higher Education: Leading the Nation to a Safe and Secure Energy Future." The document presents federal policy options for changes in tax policy and federal grant programs that would better enable colleges and universities to reduce long-term energy expenses and increase operational efficiencies. Recommendations focus on the pursuit of substantial energy savings and new, efficient, and renewable energy production and sourcing.

Positioned to Lead the Way

The white paper argues that opportunities to significantly reduce energy consumption allow institutions to contain costs and make better use of taxpayer dollars-whether those dollars are state operating funds at public institutions or federal grants and contracts supporting university-based research. Additionally, as enduring, well-established institutions, colleges and universities are in a position to plan for and make investments with a long-term view, contrary to many other industries that invest on short-time horizons or in the context of shareholder concerns.

Who Pays the Freight for Energy Efficiency?

See a related article in Business Intel  that provides a closer look at the 2012 Johnson Controls Energy Efficiency Indicator survey. Results point to policymakers' role in lowering expenses for energy-related infrastructure improvements.

As reported in this month's Business Intel, according to the 2012 Johnson Controls Energy Efficiency Indicator survey, 42 percent of U.S. respondents indicated tax credits, incentives, and rebates as elements of an energy policy having the greatest impact on increasing investment in energy efficiency. Survey results underscore the fact that building owners and operators, including those in the higher education sector, are looking to lawmakers to bring down the cost of energy-related infrastructure investments.

Impediments to Institutional Inclusion

The white paper, however, points out that many existing federal energy efficiency or renewable energy incentives were designed as tax incentives for for-profit enterprises, or as grant opportunities for state and local governments. In addition, certain federal grant opportunities, loan guarantees, and other policies have been structured in ways that exclude or limit participation by private nonprofit and public institutions of higher education.

Such corporate tax credits and deductions that currently exist include the corporate tax deduction for energy-efficient commercial buildings, the business energy investment tax credit, the renewable electricity production tax credit, and more. As tax-exempt entities, colleges and universities must partner with commercial developers to find any benefit from these programs.

Meeting in the Middle

Members of the ACUPCC financing committee and NACUBO's sustainability advisory panel contributed significantly to the paper and identified five specific solutions to address this current gap in federal energy policy. Policies such as the following help enable nonprofit higher education institutions of all sizes and types to finance their "deep" energy-efficiency measures (averaging cost savings that reach 40 percent or higher) to reduce energy consumption, increase efficiencies, avoid risks, and improve their long-term financial sustainability:

  • Allow colleges and universities to use tax-exempt and revenue bond financing to prepay power purchase agreements.
  • Develop new energy efficiency and renewable energy loan options open to institutions of higher education, including establishment of a federal loan guarantee program and a federal revolving loan fund for energy efficiency initiatives.
  • Establish, alter, and fund federal grant programs including Section 471 of the Energy Independence and Security Act of 2007.
  • Allow long-term charitable deductions and tax credits for biomass and biomethane contributions.
  • Extend eligibility of clean renewable energy bonds.

In the coming months, NACUBO and others will be working with the next Congress, the administration, and others in pursuit of these goals. In addition to continued guidance from its sustainability advisory panel, NACUBO, along with Second Nature, has established a steering committee to advance these energy efforts.

RESOURCE LINK The white paper is available on the NACUBO Web site at www.nacubo.org/business_and_policy_areas/sustainability. We welcome member feedback on our efforts to advance the policies and goals presented in this paper.

NACUBO CONTACT Liz Clark, director, congressional relations, 202.861.2553