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Energy upgrade loan program gets no takers

Posted: September 12, 2013 - 12:11am

JUNEAU — A loan program designed to help cover energy upgrades to schools and other public buildings has gotten no takers even as school districts struggle with energy costs.

The state spends $100 million each year on school district utility costs. In 2010, the Legislature created a loan program to help bring down the costs, with the loan to be repaid with money saved on heating fuel.

The Alaska Housing Finance Corp., or AHFC, which manages the program, can issue up to $250 million in loans to districts, boroughs, municipalities and the university system, but so far, none have taken advantage of the program, APRN reported Monday.

Eric Havelock, who administers the program, said the agency has gotten lots of calls and some basic questions but only received two applications from the cities of Kenai and Seward, and neither went through with a loan.

Under the program, if a public entity wants an energy upgrade, it would get a building audit where a contractor would guarantee a certain percentage of energy savings. AHFC would then provide a loan to cover the cost of the audit and any retrofitting.

After upgrades are made, the building owner repays the loan with money that otherwise would have gone toward heat and electricity. When the loan is repaid, energy savings could be put elsewhere.

If the promised savings don’t materialize, AHFC CEO Bryan Butcher said, the contractor would be on the hook for the difference.

He said the idea behind the program was to bring the same benefits to public buildings as AHFC offered for residential buildings. Private property owners have turned to AHFC for other energy efficiency programs.

Butcher said AHFC has advertised the loan program for public buildings and is looking at reasons why school districts aren’t interested.

Bruce Johnson, head of the Alaska Council of School Administrators, said it comes down to who can make long-term commitments about budgeting. Districts budget for one year ahead, making committing to a loan of five years or more difficult. That would leave the decision for an energy efficiency loan up to the state or local governments that own school buildings.

Johnson said districts in the past also have had success getting state grants to cover energy upgrades.

However, Johnson said there may be renewed interest in the program with the state looking at limiting spending amid declining oil production. He said energy upgrades will be discussed at the Alaska Council of School Administrators’ conference this month.

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