PSU just does it
Partnership with businesses allows PSU to earn money by selling tax credit to Nike
The Oregon Office of Energy (OOE) recently started a program to encourage businesses to make energy-efficient modifications, with significant tax incentives. Portland State has done many things to save energy, but as a non-profit entity PSU cannot directly receive any of those tax credits.
This past spring Nike stepped in to pass through the tax credits, benefiting PSU and the local economy.
Last spring, PSU Facilities replaced 100 light fixtures in the Peter Stott Center with new energy-efficient lighting. In doing so, the University qualified for the energy tax credit, but it needed a business partner to pass through the savings offered by the OOE.
With the pass-through option, if a non-profit entity such as PSU qualifies for the tax program, a third party may claim the credit on PSU’s behalf and pass on some of the savings. In this case, Nike served as PSU’s business partner and delivered a check for $26,997 in exchange for a hefty credit at tax time.
The new energy-efficient lighting system in the Stott Center gym is expected to save the university $7,500 a year and operate 54 percent more efficiently than the old system, far exceeding the OOE’s requirements to receive the tax credit. Total project cost for replacing the lights was $99,987.
Conservation projects, such as weatherization and lighting improvements, must reduce energy use by at least 10 percent to qualify. Lighting projects must reduct energy use by at least 25 percent. The old lighting system was “all or nothing” according to Michele Crim, PSU’s sustainability coordinator. New three-setting lights allow facilities to choose high-intensity lighting for athletic events, medium-intensity for practice sessions and low-intensity for everyday use and energy savings.
According to the OOE Web site, the Business Energy Tax Credit program “encourages investments in energy conservation, recycling, renewable energy resources and less-polluting transportation fuels.”
Designed primarily for businesses, participants can receive tax credits for 35 percent of project costs. The pass-through program was designed to help schools, tribes and other institutions without tax liability to fund energy-efficient projects. Business partners, such as Nike, pay schools about 28 percent of the project cost and get to take a tax credit amounting to 35 percent of the project cost over a five-year period.
Nike is a strong participant in the pass-through program offered by the OOE and has offered around $1 million to state public schools to date. Other recipients of the tax credit include the David Douglas school district and the University of Oregon.
Crim says the university has earned lots of tax credits but has yet to find businesses to pass through most of the savings.
“We’ve done lighting upgrades in Extended Studies, the Education Building, Cramer Hall and the University Services Building,” she said. “PSU also subsidizes mass transit passes for both faculty and students, and we have probably about $80,000 worth of tax credits from that.”
Crim also noted that “green buildings” qualify for the tax credits, and the recently completed Epler Hall earned the university credit in that respect. So far, Nike has been the only business to trade tax credits for cash, but PSU is actively looking for other business partners.
The OOE Web site states that since the program’s inception over 5,000 energy tax credits have been awarded to Oregon businesses, resulting in energy savings of about $100 million per year. Companies ranging from the Deschutes Brewery to PG&E to Mall 205 have taken advantage of the tax credit by making environmentally-friendly modifications to their businesses. For more information on the Business Energy Tax Credit, visit the Oregon Office of Energy Web site at www.energy.state.or.us.