Cold Calculation

Seeking a return to the governor's office after eight years out of politics, Kitzhaber pitched an idea he called "Cool Schools." His plan called for $100 million worth of energy-saving projects for school buildings across Oregon.

Kitzhaber claimed Cool Schools would create jobs, cut costs and save energy.

Last week, Kitzhaber—now seeking re-election to a fourth term—had his Department of Energy introduce an updated version that promises to throw $20 million more at the idea, potentially buying goodwill with school officials, trade unions and environmentalists.

But there's a problem. His first Cool Schools program was a flop. The state can't account for any jobs it might have created, and it invested only 15 percent of the money Kitzhaber pledged for energy efficiency. 

"The first round of Cool Schools was not successful," says Kevin Owens, general manager of the Columbia River People's Utility District in St. Helens. "Based on my experience, they are trying to push a rope."

Moreover, school officials say they don't want money for energy efficiency programs—they need help with far more urgent requirements, such as new buildings or upgrading older ones for safety.

"When you look at the overall need, $20 million is a drop in the bucket," says Jim Green, who represents the Oregon School Boards Association. "We'd rather have an investment in our overall facilities than an energy upgrade."

Kitzhaber spokeswoman Rachel Wray says the governor is pleased with the results of the program, which has saved energy and made some schools a better place where kids can learn.

"The governor believes that Cool Schools has provided worthwhile investments to districts across the state," Wray says.

Kitzhaber faces state Rep. Dennis Richardson (R-Central Point) in the Nov. 4 election. Richardson voted for Cool Schools in 2011, but he's a lot less satisfied with the result than is Kitzhaber. 

"Dusting off a program that had high hopes but failed is not a good idea," Richardson said in a statement to WW. "If there is an extra $20 million available for education, I would prefer it go directly into the classroom."

Kitzhaber made energy policy a cornerstone of his third term as governor. (He previously served from 1995 to 2003.) In 2012, one of his blue-ribbon panels produced a 10-year energy plan with the heft, if not the usefulness, of a phone book.

The Department of Energy damaged its reputation with the wildly generous business energy tax credit programs in the past decade, and has struggled on Kitzhaber's watch—it's currently on its third director in three years.

The Cool Schools idea echoes Kitzhaber's own challenges. He has a reputation as a governor who is long on big ideas but short on following through.

He pushed through education and health care reforms, but has accomplished little. The $250 million health care exchange Cover Oregon is a fiasco that threatens to overshadow Kitzhaber's health-care reforms and expansion of Medicaid.

From a policy perspective, Cool Schools is a smaller version of another top Kitzhaber priority—the proposed $2.8 billion Columbia River Crossing project. He promoted both as job-creation programs, but to many they didn't make economic sense.

Jim Moore, a professor of political science at Pacific University in Forest Grove, says politicians across the country proposed public works projects during the recent recession as a way to help the economy recover. Many never happened.

"These programs are hard to get funded," Moore says. "Even if they happen, they rarely employ nearly as many as they said they would. And the customers often want something else—you have a mismatch between the intent and what people need."

As part of the schools energy efficiency plan, Kitzhaber pledged to make $100 million in loans available to fix schools. He said that would create 1,000 construction jobs and many more indirect jobs, and make schools healthier and more energy efficient.

After Kitzhaber defeated Republican Chris Dudley in November 2010, he pushed Cool Schools in the 2011 legislative session.

"What makes Cool Schools such an amazing thing is, it's a triple bottom-line win," Kitzhaber said in an April 11, 2011, speech at Ashland's Helman Elementary School. "It's a jobs program because it puts people back to work, an education program because it puts money back in the classroom, and a health program that creates a healthier place for teachers to teach and students to learn."

Lawmakers passed Cool Schools unanimously.

Fast forward to 2014. What's happened? Not much.

Officials at the Department of Energy say Cool Schools didn't come anywhere close to lending the $100 million figure Kitzhaber floated. Investments so far total just $15 million.

Michael Kaplan, interim director of the Department of Energy, acknowledges Cool Schools fell far short of expectations.

"The initial challenge of Cool Schools was the capacity to borrow," Kaplan says. "The complexity of getting money out the door is certainly a challenge."

The borrowing mechanism for Cool Schools called for districts to repay the cost of efficiency projects with the savings they generated. The repayment time frame was long in many cases, complicated, and unattractive to districts struggling to pay existing bills. 

The results in terms of job creation are even less impressive. Asked how many jobs Cool Schools created, Kaplan could not provide an answer.

"That I don't know," Kaplan says. "Our data is not where it needs to be."

In retrospect, it's not surprising that Cool Schools fizzled. For starters, the program wasn't really needed.

School districts have been working on making their buildings more energy efficient since the oil crises of the 1970s, so most of the cost-effective work has been done.

Second, there were already sources of money for such projects that come out of Oregonians' pockets.

In the areas of Oregon served by investor-owned utilities, such as Portland General Electric and PacifiCorp, customers pay a 3 percent public purpose charge on each bill. Some of that money, about $7 million annually, goes to school districts for energy efficiency.

Areas of the state served by customer-owned or publicly owned utilities get money from the Bonneville Power Administration for similar projects.

Yet last week, the Department of Energy proposed putting up $20 million in lottery-funded grants aimed at consumer- and publicly owned utilities.

Kaplan says the legislative concept is preliminary and that his agency welcomes constructive criticism from utilities and school districts. 

Wray says Kitzhaber will also seek more input before making a decision. 

"[The Oregon Department of Energy's] proposal reflects some of the lessons learned since 2011," Wray says. "The governor will be weighing the proposal and making tough choices on what to propose going into the next biennium."

Columbia River PUD's Owens—citing a long list of school efficiency projects his and other utilities have completed without the help of Kitzhaber's plan—says this revival of Cool Schools is unnecessary.

"It's just one of those things that sounds good, like Mom and apple pie," Owens says. “It’s one of those programs that won’t die.” 

WWeek 2015