By Jeremy Ogul

The financial picture at La Mesa-Spring Valley School District has improved dramatically since the peak of the Great Recession a few years ago, but surging gas and electric bills are threatening the district’s ability to stay on track.

Assistant Superintendent David Feliciano said he was shocked when he compared recent electricity bills to those from a year earlier. In the first half of the 2014-2015 school year, the district reduced its energy usage by approximately 20 percent compared to the same period in the 2013-2014 school year. Despite the reduced usage, the district actually saw its gas and electric costs increase by 40 percent.

“The cost per pupil to pay our gas and electric bills are $120 per pupil per year,” Feliciano said at a school board meeting in early March. “When you think about a district of 12,000-plus students, that number blows me away.”

Air conditioning, classroom technology and lighting make up the bulk of the district’s energy use, said Superintendent Brian Marshall.

La Mesa-Spring Valley is not the only local district to see such a dramatic rise in energy bills. An informal survey of school districts in San Diego County found that from July through December 2014, districts on average used 10 percent more electricity but saw an increase of about 43 percent in their total electricity bills compared to the same six-month period in 2013.

Energy rates for schools are different than energy rates for residential customers. School districts are placed in a commercial/industrial rate class, and therein lies the problem, Marshall said.

“I don’t have a variable funding source. I can’t charge more per kid,” Marshall said. “I am like your fixed-income user, because I’m gonna get what I’m gonna get, and if you’re charging me 40 percent more, I’m gonna have to find that somewhere. Our funding stream is fixed.”

A group of officials from districts around the county met with San Diego Gas & Electric executives in late February to vent their frustration with the higher bills. The school officials suggested putting schools in a different category. Food processors, for example, are in a separate agricultural rate class. Marshall suggested that perhaps school districts could be charged at the agricultural rate since some of their energy is used to prepare food in school kitchens.

SDG&E spokesperson Stephanie Donovan said part of the cost increase is because the state is requiring SDG&E to deliver energy from particular sources.

“While renewable power is a policy goal California has embraced, it’s simply more expensive than other fuels,” Donovan said in an emailed statement.

Another factor that has driven up bills, according to Donovan: State regulators took much longer than expected to approve SDG&E’s energy rate structure that was supposed to begin in 2012. Because regulators did not finalize it until mid-2013, SDG&E has had to charge customers more to catch up on revenues that were not collected while everyone was waiting for a decision from regulators, Donovan said.

A number of other arcane regulatory-related issues, including a mandate to collect funds for a greenhouse gas emissions reduction program, all came together in the middle of last year to significantly drive up costs, she said.

“We certainly understand the school’s concerns over rates that they really have no control over,” Donovan said. “Believe me, we understand that they have a unique problem because they can’t raise their rates to offset costs.”

One area of opportunity is Proposition 39, a voter initiative that provides $550 million a year for energy efficiency upgrades at California schools through fiscal year 2017-2018. SDG&E has worked with 29 local school districts to help them apply for funds through the program. La Mesa-Spring Valley has not yet completed all the steps necessary to receive funds through the program.

SDG&E will also consider proposals to make energy bills more manageable for school districts, Donovan said, but there is a strict regulatory process that is designed to insure any changes are fair to all users.

“If you’re going to somehow change the rates for one group of customers, that’s going to have to be picked up by someone else,” Donovan said.

Despite the problems with energy rates, Feliciano suggested there is reason to be optimistic about the fiscal outlook for K-12 schools.

“Even though there is competition out there … for status in the state budget, as it were, for revenues, K-12 continues to get the bulk of the new money, and the reason why is because K-12 really took the bulk of the hit in the recession,” Feliciano said.

Gov. Jerry Brown will release a revised version of his proposed budget in mid-May, giving legislators a few weeks to make amendments and approve a final version before start of the new fiscal year on July 1.

—Reach Jeremy Ogul at [email protected].