School district’s $50 million energy contract lacks savings guarantees, verified data

CONCORD — When Mt. Diablo Unified School District staff first presented a plan that promised quick-build, money-saving retrofits in the fall of 2021, trustees of the cash-strapped district got on board without objection.

But what district staff failed to say was that by quietly signing a string of Schneider Electric’s “energy services” agreements for new ceiling tiles, light fixtures and HVAC systems districtwide, the board was waiving its right to negotiate guarantees that the purported savings in utility bills and operational costs would exceed the project’s $50 million sticker price — a key legal requirement of the deal.

It’s unclear whether the MDUSD board was aware that its unanimous vote may have crossed the line into problematic — while still technically legal — territory, according to several attorneys knowledgeable about this project, who spoke to both oversight officials and this news organization.

California’s complex web of contract laws aims to weed out corruption, fraud, favoritism and mismanagement by setting strict standards for how local agencies can dole out funding.

But MDUSD took advantage of an exception to these traditional rules; the projected energy savings tied to the deal allowed the district to expedite Schneider’s contract to design and build the multiphase construction project.

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