The state Department of Education Wednesday announced the creation of a renewable energy and efficiency program at public schools statewide that it estimates will save the department roughly $1 billion in operating costs over 25 years while expanding educational opportunities in science, technology, engineering and math.

Features of the program, which include the installation of solar panels and small wind turbines, improved energy management techniques and water conservation measures, will be rolled out at all 255 DOE schools statewide.

Chevron Energy Solutions, a subsidiary of Chevron Corp., was selected through a competitive bidding process to undertake the program for the DOE. Chevron Energy Solutions will pay all the upfront costs, including the installation of 100 megawatts of renewable-energy generating capacity, and sell the electricity to the DOE at a fixed price below what the department pays for utility-provided power.

The DOE is in the process of negotiating a power purchase agreement to buy the electricity from Chevron Energy Solutions that is yet to be finalized. The rate to be paid by the DOE will vary from school to school based on site-specific factors, such as the type of energy generation required, what energy efficiency improvements are needed and what additional conservation measures are being added.

The program is expected to result in about $1.1 billion in savings over its 25-year lifespan, DOE officials said.

Specific sites for the installation of PV panels have not yet been determined. Chevron and Hawaiian Electric Co. will work together to determine which schools can accommodate more solar energy production given issues of high PV saturation on circuits in some areas served by HECO.

The project will not affect a separate initiative to increase the installation of air-conditioning systems in schools, a DOE spokesman said.

The new project, dubbed "Ka Hei," follows a successful 2011 pilot program in which the DOE installed rooftop PV systems at 47 schools on Oahu and Kauai. The DOE negotiated power purchase agreements for the pilot program priced at 19 cents a kilowatt-hour on Oahu and 17 cents a kilowatt-hour on Kauai. Those rates compare favorably to current residential rates of 34.7 cents a kilowatt-hour on Oahu and 42.3 cents a kilowatt-hour on Kauai.

The Ka Hei project is expected to make a significant dent in the DOE’s electricity, gas, water and sewer bills, which total more than $62 million a year, said Kathryn Matayoshi, schools superintendent. In the first five years, the department is expecting to reduce its energy consumption by 25 percent and its water consumption by 30 percent.

"Ka Hei offers exciting opportunities on a number of levels, from educating our students about a multitude of energy components and workforce opportunities to strengthening communities and partnerships in the state’s energy sustainability goals," Matayoshi said.

Chevron Energy Solutions’ proposal was chosen over a competing bid submitted by Prime Solutions Inc. A former DOE employee, Sarah McCann, who was assigned to evaluate the two bids, filed a lawsuit against the department last summer, saying she was fired for recommending that Prime Solutions be selected over Chevron Energy Solutions.

However, a DOE selection committee concluded the Chevron Energy Solutions bid was superior to the one submitted by Prime Solutions, said Ray L’Heureux, DOE assistant superintendent for facilities and support services.

"As it was scored, and I wasn’t on the selection committee, there was just a huge gap between the two proposals," L’Heureux said. "It was an issue of capacity — being able to deliver a very, very complex program."