Greener buildings, with no upfront spending?

Sen. Al Franken

Over the past decade, about $12.5 million has been spent on county building retrofit projects in Anoka County, in the Twin Cities’ northern suburbs.

The improvements are helping to cut the county’s energy bill by hundreds of thousands of dollars annually, and yet taxpayers haven’t had to front one penny.

The projects were financed through a tool called energy savings performance contracting, in which a private partner foots the bill for energy efficiency projects in exchange for a percentage of the money customers save on their energy bills.

Sen. Al Franken, D-Minnesota, hosted a webinar Friday at the University of Minnesota’s St. Paul campus to promote performance contacting and other energy efficiency financing tools for government and commercial buildings.

“What’s great about this is it just is common sense,” said Franken, a member of the Senate energy committee.

In October, Franken launched an initiative called “Back to Work Minnesota” to encourage building retrofits as way to cut energy use and create jobs.

The White House has also recently promoted energy savings performance contracting as an energy-cutting, job-creating strategy.

Andrew Dykstra, director of facilities management and construction for Anoka County, was among the speakers at Friday’s event.

A decade ago, the county faced aging infrastructure, rising energy costs and increasing budget pressure, Dykstra explained. The county decided to partner with Honeywell’s Energy Services Group on a series of efficiency projects.

The county has 2.5 million square feet of facilities to manage. Energy Services Group proposed several improvements, including lighting retrofits, insulation replacement and heating and air conditioning upgrades.

The energy services company guaranteed the county a level of energy savings. Instead of asking for payment upfront, the company collects a portion of the county’s annual energy savings each year until the projects are paid for.

If the energy savings don’t materialize, the company pays the county what it expected to save. “Anoka County is not on the hook,” Dykstra said.

Franken also spotlighted property assessed clean energy, or PACE, financing. Edina, a Minneapolis suburb, recently became the first city in Minnesota to establish a PACE ordinance.

Under PACE, a local government issues a bond on behalf of a building owner to finance a renewable energy or efficiency project. The bond is sold to a private investor and secured with a special property tax assessment on the building.

The Benefits of Energy Savings Performance Contracting (from Friday’s webinar):

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