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Investment in Efficiency Produces Big Energy Savings for 36 Minnesota Facilities

December 19, 2011

For Immediate Release

ST. PAUL, MN – Thirty-six facilities across the state will realize more than $3 million in permanent, ongoing energy savings every year for the foreseeable future. That’s thanks to a one-time, $4.1 million energy upgrade grant program administered by the Minnesota Department of Commerce, Division of Energy Resources (DER). The grants, funded by the American Recovery and Reinvestment Act (ARRA), were targeted to make energy efficiency improvements to commercial, industrial, and nonprofit facilities across Minnesota.

Commerce Commissioner Mike Rothman says the results of the program can be measured in dollars and sense.

“Energy savings projects like these are good for business, good for our environment, and good for our economy, said Commissioner Rothman. “This targeted investment of one-time funds will pay for itself over and over again. It has helped dozens of facilities dramatically reduce their energy consumption and realize millions of dollars in ongoing cost savings.”

As a result of the program, the Chippewa Valley Ethanol Plant in Benson has estimated it will save about $700,000 a year in natural gas costs. St. John’s Hospital in Maplewood will save about $200,000 every year in energy cost reductions, and Gerdau Ameristeel U.S. Inc. in Duluth will save $50,000 a year.

“Commercial buildings and industrial facilities like these consume about half of our state’s energy,” said Rothman. “That’s why it makes sense to target large buildings. Targeted retrofits using one-time investments deliver the biggest bang for our buck. And every dollar a business or nonprofit saves is a dollar they can be using to expand their operations, hire new workers, and get our economy moving again.”

More than 90 percent of the energy grant projects funded by the program have been completed and are achieving energy savings today. The program, which launched in December 2009, received 150 proposals out of which 39 were selected to receive grants. Most of the grants were awarded for direct energy improvement projects, and three were given to nonprofit entities to operate revolving loan programs to help finance energy efficiency projects.

For the direct improvement projects, the program required a financial match component. Projects were ranked according to projected energy savings, payback, leveraged additional spending per grant dollar, and job labor hours of work generated by the funding. Overall, the projects will save an estimated 440,000 MMBtu per year, or enough energy to heat 8,150 homes per year, and will have an average payback of four years.

Grantees included a cross section of for-profit and nonprofit entities. Efficiency measures achieved included upgrades to lighting, heating, ventilation, and air-conditioning systems and controls and to industrial processes. For-profit and nonprofit companies to benefit from the state energy grant program included:

• Gerdau Ameristeel
• Chippewa Valley Ethanol Plant
• St. John’s Hospital
• 3M Company
• Aeon
• Aitkin Iron Works
• Arrowhead Promotion and Fulfillment Company Inc.
• Caledonia Care and Rehab
• Cambria Company LLC
• Center for Energy and Environment
• City Center Retail/AG 800 Washington LLC
• City of Minneapolis CPED
• Coastal Seafoods
• Community Reinvestment Fund
• Davisco Foods International Inc.
• Douglas Machine Inc.
• Earl Brown Tower LLP
• Fairview Health Services (Maple Grove)
• FourCrown Inc. (Wendy’s)
• Habitat for Humanity of South Central Minnesota
• Honeywell
• J&B Group Inc.
• Le Sueur Inc.
• LifeCare Medical Center
• Mall of America
• National Sports Center Foundation
• North Memorial Health Care (Maple Grove)
• Northern Plains Dairy
• Pequot Tool & Mfg. Inc.
• Prospect Foundry LLC
• Resource Inc.
• Rolco Inc.
• Seagate Technology LLC
• Spruce Tree Center LLP
• SuperValu Inc.
• Walker Art Center
• Wausau Paper Mills LLC
• YMCA of Greater St. Paul
• YWCA of Minneapolis

Examples of Savings from Energy Efficiency Initiative

St. John’s Hospital (Maplewood, MN)
St. John’s Hospital in Maplewood recently completed a building automation system upgrade and retro-commissioning project that included all facility air handling systems and heating and cooling systems. The work included operational improvements and control of heating, ventilation, and air-conditioning systems to attain maximum energy performance. Premium efficiency motors were installed. Equipment was programmed to be turned down or turned off when the spaces served were unoccupied. Equipment adjustments were made and special pump controls and valves were installed for precise control to meet heating and cooling needs. St. John’s received a $300,000 grant for the $1 million project.

The grant, combined with more energy efficiency improvements financed by the St. Paul Port Authority and the Trillion BTU Program, will allow St. John’s to save 30 percent on its total energy consumption.

Jed Field, system director of engineering for HealthEast Care System, that means big savings, “Reducing our energy consumption by 30 percent will amount to about $200,000 of energy cost savings per year. The state grant allowed us to take the extra step or two from an energy efficiency perspective to achieve the maximum energy savings for our building.”

Field said virtually any commercial or industrial facility that is 20 years or older figures to save 20 percent on their energy bill if they make significant energy upgrades. “There are great opportunities for retrofitting buildings,” Field added. “But budgets are tight, so it’s hard right now for many companies to make those types of investments unless they receive government assistance or other incentives.”

Chippewa Valley Ethanol Plant (Benson, MN)
Chippewa Valley Ethanol Plant in Benson used its grant to improve the process to recover waste heat from a stream of hot exhaust gases discharged from a regenerative thermal oxidizer. The process captures heat that normally would be exhausted into the atmosphere, runs it through a heat exchanger, and then uses it to avoid burning natural gas to produce heat needed for other parts of the ethanol production process. Chippewa Valley received a $500,000 grant to help fund the $2 million project. With estimated savings of $700,000 in natural gas costs per year, the project will pay for itself in about three years.

Gerdau Ameristeel (Duluth, MN)
Gerdau Ameristeel in Duluth replaced two 30-year-old 900 kW power supplies with new energy efficient 1,125 kW power supplies. The power is used to heat steel bar stock which is cut and forged into steel balls varying in size from 1 inch to 6 inches in diameter. Steel balls produced from the operation are used extensively in the taconite mining industry of Minnesota as well as other ore processing operations globally. The $1.5 million project, which received a $95,000 grant, is projected to reduce Gerdau’s energy consumption by 7 percent and save about $50,000 per year.