The Helena Housing Authority expects to save $2.4 million in utility costs over the next 15 years after it completes an energy upgrade of its 366 city housing units.
The project marks the first "performance contract" with a public housing authority in Montana and will allow HHA to reduce energy and water costs and apply the savings to repay the project loan.
"About two years ago we replaced 60 furnaces and we saved $25,000 in nine months," said Josh LaFromboise, the housing authority's interim executive director. "That kind of got the wheels spinning."
LaFromboise said HHA will apply about $700,000 in economic stimulus funds toward the project. It will pay for the remainder using $1.7 million financed through Valley Bank, which offered the lowest rate of around 4 percent, he said.
The project is being financed like a traditional construction loan. Money saved through reduced energy costs will be applied back to the loan. The more money the upgrades save, LaFromboise said, the faster the loan will be repaid.
"Some people said we were too small of an organization, but we kept pushing forward," LaFromboise said. "In the end, I think we came up with a pretty good project. We're the first housing authority in Montana to do this, and just the second or third in the mountain plains region."
Natural gas furnaces and the central boiler systems at several properties will be replaced to improve heating and efficiency. The work also includes weatherization efforts to reduce heat loss and improve the comfort of residents.
Solar panels will be used to power HHA's main office. Water conservation and weatherization efforts will be made at Stewart Homes, which are being eyed for possible bigger changes.
"Water conservation has huge paybacks over a shorter period," LaFromboise said. "We limited the items going into Steward Homes, should they decide to go forward with redevelopment. If they don't redevelop, we can always do a second phase."
Work to the aging housing complex will be limited to projects with a faster payback, including weatherization and new light sockets to accommodate compact florescent lights. New toilets, faucets and sinks will help reduce water use, LaFromboise said.
David Koch, director for public housing solutions with Johnson Controls, the company contracted to do the work, said the energy savings could potentially save the authority millions of dollars over the next 15 years.
"Really, the bottom line is to make the homes more comfortable, and, secondly, to make them more energy efficient," said Koch. "It will allow HHA to improve their operation by making things better and more comfortable at a lower cost."
Koch said the upgrades could also reduce the authority's carbon footprint, keeping 1.4 million pounds of carbon dioxide, 795 pounds of sulfur dioxide, and 2,295 pounds of nitrogen oxide from entering the atmosphere.
That, he said, is the equivalent of removing 146 cars from the highway, or planting 220 trees each year.
"We've been in this business for quite some time, where you use energy savings to finance modernization," Koch said. "But the demand is definitely ramping up with all the recent focus on being greener, being more energy efficient, and using more renewable energy sources."
LaFromboise said the energy program will support local contractors and suppliers. He estimated that the project could create 58 jobs and inject $5 million in additional spending into the state's economy.
"The more we save, the faster we can buy down the debt," he said. "Johnson Controls has guaranteed us $210,000 in savings each year, but it may be higher than that."
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