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Utility savings, increased productivity can often result

MDA Energy Investment Loans can cut power expenses

With energy costs spiking, energy conservation for businesses and industry has taken on new urgency. Help available from the Mississippi Energy Loan Investment Program has allowed businesses ranging from Gail Pittman to the Mississippi River Corporation to use the best of new technology to reduce energy usage.

The Mississippi Development Authority (MDA) Energy Division offers free assistance in the form of energy audits that make recommendations for conserving energy. And the Energy Investment Loan Program provides low-interest rate loans for improving energy efficiency and lowering utility bills.

The program can pay big dividends. After Mississippi River Corporation, a paper company in Natchez, went through an energy audit and used the loan program to make improvements, the company realized energy cost savings of $1,800 per day, said Demetra Foster, manager of the Energy Investment Loan Program.

“Laurel Lumber Company also saved a great deal with the energy improvements,” Foster said. “Many of these lumber companies use a lot of natural gas for purposes such as drying wood. A lumber company customer I talked to recently was paying $350,000 per year for natural gas. They are trying to reduce that cost.”

The loan program requires collateral, and generally companies must have been in business three years “so we know they are in business to stay in business,” Foster said.

The loan funds are used to make improvements in equipment, processes and buildings in order to reduce utility bills.
Companies both large and small can take advantage of the program that offers loans from $15,000 to $300,000 at a rate of 3% below prime. Generally the loan terms are seven years. As money is paid back into the revolving loan fund, it becomes available for other businesses doing energy upgrades. Because the program has been so successful and rewarding, Foster said a waiting list now exists which far exceeds the amount of available funds. As funds are replenished through loan payback, additional loans will be made to qualified applicants.

Sometimes companies don’t have enough collateral for a loan. But they can still benefit from getting advice on reducing energy use.

“Just about every person who calls gets some technical assistance,” Foster said. “No-cost and low-cost energy savings that don’t require a loan can sometimes be a big help. Some suggestions are basic, things as simple as cutting lights off when everyone leaves, adjusting the thermostat at night when no one is in the building, closing off part of a facility to heating and air conditioning when it is not being used, and using compact florescent light bulbs that are very energy efficient.”

Kenneth Calvin, director of the MDA Energy Division, said typically the loans are paid back by energy savings over the life of the loan.

“Basically you are paying the loan back through the amount of money you are saving each month in utility bills,” Calvin said. “This program is probably one of the purest forms of economic development. We have existing companies we want to keep here in Mississippi. So we need to help them be competitive. One way to do that is help them manage their utility bills. This is a great thing to help our existing industries remain competitive.”

Calvin said at this time of year with winter heating costs looming, there is always a surge of interest in reducing energy bills. Often that goal can be achieved through technology that allows improved efficiency.

“When we start looking at efficiency, our energy auditors look at what can be done within the confines of their building to better manage energy consumption,” Calvin said. “We start looking at everything from the shell of the building to the internal workings including lighting, windows, air handling equipment and boilers.

“When a company comes to us and has expressed a concern because of high utility bills, what we normally do is dispatch an engineer out of this office who sits down with the company and does an energy audit. Our energy engineers will then develop a proposal for this industry. He gives them a document that says, ‘If you make these modifications, these are the kind of savings you should experience.’ It gives recommendations on the types of equipment that could be placed in the facility. We promote a lot of energy efficient equipment when we make our recommendations.”

Considering the factors

Calvin said the most common time for a company to contact their office is when it is experiencing unusually high utility costs, or when it is going through an expansion and wants to do it in the most energy efficient manner possible.
When calculating cost savings, labor has to be considered. An example Calvin gives is an old boiler that requires two maintenance people available 24/7. If a new boiler reduces that to one maintenance person needed a couple of hours per day, there can be significant labor-cost savings that can be factored into justifying the upgrade.

Calvin said originally $5 million was placed in the program and was approved by the Legislature.

“The program has been so successful, about 90% of resources are allocated,” Calvin said. “Companies seeking assistance must wait until the program recharges itself. It is a self-perpetuating loan fund.”

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

About Becky Gillette

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