The Saint Paul Port Authority officially launched an innovative program earlier this month that is one of the first in the nation to use energy conservation as an economic development tool.

The Port will use a $5 million federal stimulus grant, administered by the Minnesota Department of Commerce, to create a revolving loan fund that will help finance energy efficiency improvements in commercial and industrial businesses. Xcel Energy Co. and local Economic Development Agencies (EDAs) also fund the program. The program is called, “Trillion Btu Energy Efficiency Improvement.”

“This program emerged from our efforts to help the Rock-Tenn paper recycling plant reduce its energy use and become more competitive in its industry,” said Pete Klein, the Port’s vice president of finance. “In that yearlong process we saw how energy conservation measures helped turn that facility into one of the company’s most cost-effective producers.

“We now understand that the payback for energy efficiency and conservation is there for businesses. This is bread and butter technology that hasn’t been given the capital to work.”

The program would work in this way:

Businesses voluntarily would agree to energy audits paid for entirely by Xcel Energy. Engineering studies would follow to provide a blueprint to specific improvements that would reduce a company’s energy usage. Businesses in this program would pay about one quarter of the cost of these studies.

The Port, Xcel and local EDAs then would finance 100 percent of the capital improvements. The monthly loan repayment by businesses would be structured to be less than the expected energy savings. This structure will provide the business with an immediate positive cash flow from the project without the use of any of its own capital.

“This is a great idea because it puts people to work,” Port President Louis Jambois said. “This is a perfect fit for the times.

“The program increases the competitiveness of existing business and retains existing industrial jobs,” he said, adding: “It reduces our energy use and our carbon footprint. And it leverages the resources of Xcel Energy and potentially other energy companies to achieve our energy conservation goals.”

This project was made possible by a grant from the U.S. Department of Energy and the Minnesota Department of Commerce through the American Recovery and Reinvestment Act of 2009 (ARRA).

For more information contact Pete Klein at 651-204-6211 or email him at pmk@sppa.com

 From the President

In late January, U.S.Treasury Secretary Timothy Geithner came to town to listen to Minnesotans talk about opportunities in the green economy.  The meeting was organized by the Blue Green Alliance and hosted at Honeywell in Golden Valley.  Blue Green Alliance Executive Director David Foster moderated the event.  The meeting was an invitation only affair, and I was fortunate to have received an invitation to make a brief presentation.

U.S. Treasury Secretaries don’t show up in these parts every day, so when they do it’s a pretty high profile visit.  My presentation was one of many, and was preceded by Saint Paul Mayor Chris Coleman, Minneapolis Mayor R.T. Rybak, and U.S. Representatives Betty McCollum and Keith Ellison.  State Building Trades President and Port Authority Commissioner Harry Melander presented as well.  All expressed gratitude that the Secretary selected Minnesota for his visit and all identified ways that Minnesotans and Minnesota businesses could help lead the way to economic recovery.  

My role was to highlight a specific example of a public-private partnership where being “green” would also improve the economic competitiveness of Minnesota businesses.  Of course, I provided a brief description of our new Trillion Btu program and its link to the federal economic stimulus package.  I emphasized the revolving loan nature of the program and the notion that loan repayments are made from the positive cash flow resulting from the borrower’s energy improvements. 

The audience with Secretary Geithner also provided the perfect opportunity to endorse the federal New Market Tax Credit Program (NMTC) – an existing program that is delivered and administered by the U.S. Department of Treasury.  Too often, change agents (and all new administrations view themselves as change agents) are quick to discount existing programs in their quest to create something new.  But the NMTC program is well run and with access to credit being a major challenge these days, it is more important than ever.  Call me a shameless panderer, but I put in a plug for the program, and a plug for our upcoming request for a new allocation of tax credits. 

The event was clearly a welcome relief to Secretary Geithner, who has been subjected to continual criticism for his efforts to calm the financial crisis and revamp the nation’s financial regulations. Under the best of circumstances that’s no small task.  But when the atmosphere in Washington is factored in – an atmosphere where ideological polarization is pervasive and no idea is ever a good idea – the contrast between our “can do” approach and his daily routine must be very stark indeed. 

More than once he expressed his appreciation for our positive attitude.  And he repeatedly stated what we all intuitively know is true – the future will belong to the people and places that can transcend political differences and forge partnerships.  

Will there be any tangible positive outcomes from the meeting?  We might have sown a few seeds about our activities and our ability to collaborate, to innovate and to deliver. And If the Port Authority receives a 2010 NMTC allocation or additional funding for Trillion Btu, well, maybe the event was worth a couple hours of my time.