Alice Turbiville is Associate Vice President for Finance & Assistant Treasurer at Swarthmore College and an alumnus of the NACUBO Fellows Program. In an interview with NACUBO’s policy and advocacy manager, Neil Gavigan, Alice discusses Swarthmore’s To Zero By Thirty-Five initiative and provides insights into how tax incentives in the Inflation Reduction Act of 2022—the law passed last fall that authorizes nearly $400 billion to address climate change and energy security—will support this monumental effort.
You have a history of advancing environmental efficiency and efforts at Swarthmore, including accepting NACUBO’s 2019 Excellence in Sustainability Award for the institution’s carbon pricing program. What is it about the culture at Swarthmore that leading in sustainability is such a priority? How does this fit into broader Environmental, Social, and Governance (ESG) goals?
Swarthmore’s commitment to caring for the natural environment dates back to the College’s founding. Our stewardship of the environment if a unifying force across our community —including our alumni, current students, to our board, faculty and staff members. In addition to being the right thing to do, we’ve found that our efforts are also financially beneficial. We conducted a comprehensive financial analysis that informed our transition to a fully electrified utility infrastructure, powered by new, renewable energy generation, with the aim of achieving carbon neutrality by 2035. It’s a win-win.
How does your role in finance support this work?
At the end of the day, I see my job as helping to find a way for big ideas to come to fruition. Something like carbon neutrality takes many years of discipline and collaboration to plan, finance, and implement. My role is to help the Facilities and the Sustainability offices think through the financial elements of these environmental initiatives, beyond just budget or staffing requests. Examples of projects I have worked on include the internal carbon charge, a Green Revolving Fund, and most recently implementing an internal carbon charge on all flights. These successes led to deeper discussions on how to have energy resiliency in the face of climate change.
Would you tell us more about To Zero By Thirty-Five? What are the main projects or efforts driving the initiative?
To Zero By Thirty-Five is the College’s plan to achieve carbon neutrality by 2035. This encompasses a comprehensive change-over from a fossil fuel intensive heating and cooling system to a new geoexchange system that is powered by renewable energy. The plan also involves energy efficiency improvements to campus buildings, solar electricity, and off-site renewable energy procurement.
How did leaders at Swarthmore come to the decision that it would make such a huge investment in the geoexchange? Could you give a high-level explanation of the project?
The College’s aging steam distribution infrastructure was past its end of life, and we knew something had to be done. In 2017, working with consultants who specialize in the field, we began researching and planning for the transition to a new energy system. We modeled several higher efficiency and lower carbon options against the “business-as-usual” option of simply replacing the steam infrastructure. In the end, the model showed that the carbon-free geoexchange system would be cost-neutral or better than renewing the steam system over a 30-year life-cycle. We designed the system and the Board of Managers approved the plan in 2021.
The system works by extracting heat from buildings during the summer and storing it underground for use in the winter. The system's powerhouse, the geoexchange plant, will be located in the basement of our new Dining and Community Commons (which, as an aside, will be among the first net-zero campus dining facilities in the country). Buildings across campus will be connected to the plant in phases, with all connections complete by 2035. We have detailed information on To Zero By Thirty-Five on the College’s website.
The Inflation Reduction Act (IRA) is a historic national investment in energy efficiency. At what point did it become clear that ongoing work at Swarthmore could be eligible for tax incentives?
When the IRA was enacted, there was immediately an interest in determining if the geoexchange project would be eligible. In early fall 2022, we began working with our tax advisors to review and document our project eligibility as well as our assembled evidence to lay the groundwork for the credit.
Specifically what tax incentives are you pursuing for the geoexchange? At Swarthmore, what is the process and which departments are involved in identifying incentives and aligning them with new or ongoing work?
The investment tax credit ITC Section 48 is the credit that benefits the geoexchange project investment.
For other energy efficiency projects, I work closely with the AVP for Sustainable Facilities Operations & Capital Planning to help identify possible tax incentives. These might include solar installations, electric car charging stations, or energy efficiency deductions available under Section 179D.
The Treasury Department, IRS, and other agencies are still releasing guidance on many aspects of these credits. How are you staying on top of new and changing requirements and ensuring that you maintain compliance?
I stay informed by working closely with our tax advisor—we work with PwC Partner Ed Tarka and his team of tax professionals—and reading the insights that they produce as well as other whitepapers and all associated tax guidance. NACUBO has some great information in this space. Since these are complex and evolving, having a plugged-in tax advisor is certainly advantageous and helps with the project planning and execution.
The IRA completely re-shaped the Section 179D deduction for energy efficient construction. In addition to extending the deduction to private colleges and universities, the law lowers the floor for qualifying energy savings and provides a much greater monetary incentive provided prevailing wage and apprenticeship requirements are met. How has access to Section 179D changed thinking at Swarthmore? Where do you plan to seek the deduction?
The 179D deduction is a wonderful opportunity to provide cost savings for colleges and universities. We have a host of energy improvements for buildings on the horizon as part of the To Zero by Thirty-Five plan. As we partner with designers and engineers, we hope to maximize our energy savings to generate the maximum transferable tax credit, so long as it’s financially tenable. For starters, we are looking for a single standalone project to pilot this, which will help inform us how to do this on a larger scale.
Any advice for colleagues that are interested in pursuing these credits?
Don’t be afraid to seek them out. Perhaps start with a small-scale project to gain your understanding. Talk with your peers; we are all interested in this topic. The tax credits are meant to incentivize action and will hopefully level the playing field to make environmentally sustainable projects get put in place.