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State Capitol Week in Review

Often it is several years before the affects of legislation can begin to be felt, and so it is with the energy bills the legislature approved last year.

Right now, Arkansas has only a handful of compressed natural gas (CNG) filling stations, but more can be expected in the near future with the rebates and incentives in Act 532 of 2013. This is important because with each vehicle converted to CNG, the U.S. becomes less dependent on volatile foreign countries for crude oil.

In DeWitt, a new “Farm-to-Fuel” refinery is now producing bio-diesel for trucks, buses and farm vehicles largely because of research done at Arkansas State University and Phillips County Community College of the University of Arkansas, which led to the decision to process waste vegetable oil and camelina at the refinery. Camelina, a relative newcomer in biofuels, is a short-season, fast-growing, oil-seed crop that can also be used as livestock feed.

Financing energy-efficiency projects for state government buildings and facilities is made easier through Act 1252 of 2013 by letting the Arkansas Development Finance Authority issue bonds.

Act 1074 of 2013 eases financing of Property Assessed Clean Energy (PACE) projects, and lets cities and counties form Energy Improvement Districts under locally appointed boards of directors.

The districts can issue bonds, accept grants or contract for loans from private investors. The districts would consider loans to property owners to finance improvements to reduce energy costs. Examples would be installation of solar panels, better insulation or more efficient heating, ventilation and air conditioning (HVAC) systems.

Loan approval would depend upon an energy audit showing the improvements would lower energy costs sufficiently re-pay the loan, similar to a lender requiring a house inspection before approving a home loan.

PACE loans are paid through the owner’s property taxes. The property owner saves money through the life of the loan because the energy savings are greater than the increase in taxes, and the savings are even greater after the loan is paid off.

Supporters say that PACE will primarily benefit owners of commercial and industrial properties as well as multi-family units such as apartments because federal regulations place limits on residential homeowners.

North Little Rock and Fayetteville have formed Energy Improvement Districts and an one has been proposed for Little Rock.

Heating and air conditioning companies were major supporters of Act 1074, saying that easing financing of energy improvement projects would create more jobs.

More than 11,000 Arkansans work in the “advanced energy” industry with more than 90 companies in the state that produce energy from renewable and alternative sources such as biofuels, wind, hydro- and solar.

HVAC companies in the state employ more than 2,400 Arkansans.

Production of oil and natural gas, considered traditional energy resources, is not included in the “advanced” energy sector.

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