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
