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A loan program to help businesses retrofit their buildings with energy-efficiency upgrades is now underway in Pulaski County after more than a year of discussion.

Last week county officials finalized the Property Assessed Clean Energy program and are ready to accept applications from business and property owners within the county limits.

The program allows owners to borrow money for energy-efficiency improvements -- like adding insulation, installing solar panels, or upgrading cooling systems -- and pay it back over time, therefore mitigating the sticker shock of upfront costs. Instead of making traditional loan payments, the money would be paid back as an add-on to property-tax bills.

Upgrades under the program are required by state law to cost less than owners would save on utility bills over time; any program loan payment must be less than the customers' energy savings.

Fayetteville became Arkansas' guinea pig when the city adopted a program in 2014. By the next year the program's first participant, the nonprofit Communities Unlimited, had opted in.

"We are very interested in trying to reduce our energy use to be more green and help the environment, but we are also motivated by the financial savings," said Bruce Darr, the nonprofit's director of lending.

After $27,000 in energy improvements on its building -- including replacing all fluorescent lighting with LEDs and planting trees for shade -- the nonprofit is projected to save $5,370 per year, resulting in a five-year loan-repayment period.

Pulaski County moved toward creating its own program after a Quorum Court vote in 2015 established a seven-member program commission with representatives from each of the county's cities. The county then selected three third-party companies to administer the program: Arkansas Advanced Energy Equity, or A2E2, which already administers Fayetteville's program; Jordan Inc., a real estate company; and Ygrene Energy, a California clean-energy financing company.

North Little Rock also put together its own program in 2014 and for the past 12 months has been working with McCain Mall to develop a proposal to take to the city's program commission. A North Little Rock spokesman said the city intends to merge its program with the county's once the mall's proposal has been completed.

Little Rock also has been establishing a program. Despite invitations to join the county's program, the city has so far chosen to operate individually, said Stuart Mackey, the chairman of the Little Rock Property Assessed Clean Energy Commission. With a separate city program in place, property owners living within the city limits could choose between the county's program or the city's.

And rather than bring in third-party administrators, the city's program plans to hire internal administration.

"We feel that's going to lower the cost for the end user, and we think that's ultimately the benefit that we're trying to achieve -- to keep this as inexpensive as possible," Mackey said.

Barry Hyde, county judge of Pulaski County, said he feared having separate programs for the city and county could create unneeded competition and redundancy.

Under the county's terms, the program's three administrators are prohibited from working with Little Rock's program to avoid conflict of interest, County Attorney Adam Fogleman said.

But Hyde still hopes the city's program may one day fold into the county's to create a stronger program with a bigger marketplace more attractive to investors.

"The big thing about this is it's attracting money. This is a lending program, this provides capital for sustainable renovation-type projects," Hyde said. "It's all about having a large enough and strong enough program that it attracts lenders or investors."

"It's a chance for us to take a regional view as opposed to just our little areas -- that's the whole idea of it," Hyde said.

Originally established in 2008 in Berkeley, Calif., Property Assessed Clean Energy programs now exist in 29 states and across more than 1,000 municipalities, according to PACENation, an advocacy organization that tracks the program.

In Arkansas, business interest in energy efficiency is blossoming. The Arkansas Advanced Energy Association, a business coalition dedicated to new energy technologies, has seen its membership grow over the past four years to more than 90 businesses, association Director Steve Patterson said. Patterson also is an operating partner of A2E2.

"Businesses are becoming more conscientious about their energy costs," Patterson said. "Most of this technology is now affordable, whereas before it wasn't."

In Pulaski County, four businesses already have expressed interest in the county's program. Three of them are in Little Rock, Hyde said.

But this kind of loan program is still in its nascent stages -- no other municipalities or counties around the state have anything similar in the works, Patterson said.

"Much of this is driven by the business community, and as businesses in other communities see what's happening in these PACE programs, we're hopeful that they'll apply more pressure on their political leaders to adopt a [PACE] ordinance," he said.

Metro on 07/28/2016

Print Headline: Energy-efficiency loans on tap

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