Texas LoanSTAR program helping governments curb energy use, save money

The program is built around a revolving loan mechanism. As payments on the loans are made, money goes back into the fund to be loaned to another entity. Loans are for a maximum of $5 million, but it is possible to qualify for two concurrent loans, providing one of the loans is in the "repayment" cycle.

Since the first loan was approved in 1990, the Texas LoanSTAR program has made available more than $241 million to nearly 200 entities. Program officials report another $35 million in loan applications are in the queue. Among them is a $2.6 million loan application from the El Paso ISD where the goal is to save $344,000 per year. The City of El Paso also has a $5 million loan application that will be used as part of a $14.7 million project anticipated to save the city $1.7 million per year.

The most recent success story is a $1.5 million loan to benefit the Austin-Bergstrom International Airport. The airport will install energy-efficient equipment and the estimated savings is expected to be $260,000 per year. The $260,000 savings projection annually will allow the loan to be paid off in 10 years. And once the loan is paid off, the savings each year will continue - meaning fewer city dollars for energy costs and less burden for taxpayers.

These loans can be used for energy efficiency retrofits, lighting, heating, ventilation and air conditioning upgrades. Officials with the program say lighting and HVAC projects are the most popular. The City of Austin used a loan from the Texas LoanSTAR program to change its traffic lights from regular incandescent lighting to LED lights. The funds can also be used on building shells - for adding insulation or repairing dry wall. Water conservation projects qualify as do thermal storage projects.

Some of the larger loans since the program began include:

• $4.6 million loan to The University of Texas at Austin (that should save the university $1.4 million per year);
• $3.8 million loan to a state agency (hoping to save more than $1 million per year);
• $1.1 million loan to Del Mar College in Corpus Christi (that may save more than $287,000 per year);
• $3.2 million loan to the Texas A&M University System (expected to result in more than $1 million in savings each year);
• $6 million loan to the City of Dallas (that should result in $1.1 million in savings); and
• $5 million loan to the Galveston ISD (that may net more than $628,000 in energy savings annually).

There are loans, such as the $347,000 loan to the Ward Memorial Hospital that was expected to produce an annual savings of more than $48,000 and a $113,000 loan to the City View ISD that projected savings annually of more than $11,000.

The program has become quite popular, thanks in large part to engineering firms and energy services companies familiar with the program. Good news spreads quickly and today, the LoanSTAR Revolving Loan Program is the largest state-run conservation program in the country. It is administered by the State Energy Conservation Office, a division of the State Comptroller's Office.