New loan fund will help Alaska businesses lower energy costs

Across Southeast, especially in communities not linked up to affordable hydroelectric power, energy costs are one of the biggest challenges to doing business. Whether a small retail outlet or a large industrial operation, we all know the high price of keeping our workplaces bright and warm to maintain productivity and attract customers. The commercial sector in Alaska pays approximately twice the national rate for energy, and with diesel prices on the rise, it's an issue we can't run from. 

This year the Alaska State government did something about it. The quickest and most effective way of reducing energy costs is through efficiency upgrades. Noting that the state currently provides energy efficiency relief for the residential and public sectors, the legislature this year set out funding for a program to ease the energy burden born by our commercial sector. 

The Alternative Energy Conservation Revolving Loan Fund, created in the Alaska Sustainable Energy Act, will provide loans to businesses and non-profits for energy efficiency retrofits. Most owners and managers understand the high rate of return on investment found in energy upgrades (often over 25 percent in Alaska) but find difficulty amassing the necessary up front capital. These loans will be low interest, and capped at $50,000, making them great opportunities for small- and medium-sized outfits around the state. Created as a long-term resource, the fund revolves such that when one loan is paid back, another will go out. Thus, the Alternative Energy Conservation Revolving Loan Fund will be supporting businesses in Southeast and around Alaska year after year. 

Getting the $2.5 million seed funding for the measure was not easy, but Senators Wielechowski and McGuire worked throughout the session to speak up for Alaska's businesses and non-profits. In the final days of session money was included in the capital budget. Governor Parnell still needs to approve this funding, but he expressed support for a commercial energy efficiency loan program early in the session. 

The program could begin as early as this fall. This is a great opportunity to strengthen our economy in Southeast. From general stores to tour operators, savings on energy bills can be passed on to customers or reinvested in our communities. It's time to turn down our energy use and turn up the profits in our region. Any Alaskan-owned business is eligible, and the sooner you enroll in the program, the sooner those bills come down. 

Kiel Renick is the Legislative Liason for Energy Issues at the Alaska Conservation Alliance. He lives in Juneau.