(Editor’s note: This story is based on an interview with Kris Holmen that was conducted with the Newsleader the day after he appeared before the Rice City Council. The post-council interview was necessary because the city council does not use microphones, thus much of the council members’ conversation with Holmen could not be heard by the audience or this reporter.)
by Dennis Dalman
Energy savings for the City of Rice would be a “win-win situation,” according to an option presented by Kris Holmen at the March 21 Rice City Council meeting.
Holmen, a resident of Rice, is a business-development specialist for Sundance Energy Solutions and is also an electrical contractor with his own company, Cedar Pine Electric.
Holmen presented a “shared-savings program” to the council. Such a program works like this:
First, the city agrees to have the Hastings-based Sundance Energy Solutions do a free audit of energy used by the city in any or all of its facilities. After the audit, Sundance proposes energy-saving solutions, which can be anything from LED light bulbs to insulation, from solar panels to wind energy. Installations and any other energy-saving changes are made, at no cost to the city, by Sundance along with its alliance investment partner, Phoenix-based Energy Surety Partners. ESP, the investor in the energy-saving programs, contracts with Sundance to do the audit and the energy-saving changes.
What’s in it for Sundance and ESP? Any energy cost savings realized by the city will be split among the city, ESP and Sundance. If there are no cost savings in a given period, the city pays its energy bills, as usual, but the city does not owe any money to Sundance or ESP.
The percentages of savings that would be split would depend on the project and on negotiations with the city, Holmen noted.
“We call it ‘no-cost analysis,’” Holmen said. “We don’t charge the city for services. If it’s not a good fit for the city, so be it. The city will have no out-of-pocket expenses. It’s a great opportunity to have energy savings, to go green and to help the city.”
Energy-saving options, such as solar solutions, have come down dramatically in price in recent years, and the technologies have improved, but sometimes cities are reluctant to make the initial investments to make the structural changes, Holmen noted. This way, Sundance makes the changes for a city at no cost to the city.
Another plus of the plan is the structural energy changes to the city would be repaired and/or maintained by the investment company (ESP) via the contractor (Sundance). The city would have no repair and/or maintenance costs as long as the contract lasts – up to a period of 20 years, and renewable after that.
Another option is after the structural energy-saving changes have been made by Sundance, the city can pay for the changes and be on its own. However, the city would then be responsible for any repairs and/or maintenance for those changes.
The council members appeared to be interested in Holmen’s proposal. The next step is for the council to get together again with Holmen and work out a plan of which city facilities, if not all of them, they would like to have audited. The next step would be to examine which energy-saving changes would be made and whether there would, in fact, be enough savings to make the project worthwhile to the investors.
Holmen noted Sundance Energy Solutions has been working with the cities of Royalton, Belle Plaine and Duluth on cost-savings programs. It works with any non-profits such as schools and counties for the same kind of projects. It also works with for-profit enterprises such as farms and small companies to do energy audits and to help them network to initiate affordable energy-saving changes. It cannot, however, offer them the kind of shared-savings programs available only for non-profits.
Just a week ago, there was an open house on the Jim Jorgenson farm in Westbrook in southwest Minnesota that contracted with Sundance to install solar panels that can produce up to 30kW of electricity. To defray the cost, Sundance helped Jorgenson acquire a grant from the U.S. Department of Energy and a 30-percent federal energy-savings tax credit. It is estimated Jorgenson will see an energy-savings payback within four years, according to Sundance.
For more about energy savings via Sundance, call Kris Holmen at 320-492-0544.