Building upgrades give downtown St. Paul smaller energy footprint

Energy efficient LED lights that will soon replace the neon lights on the iconic First National Bank sign in downtown St. Paul are just the most visible part of a major overhaul that will shrink the city's energy footprint.

Soon, First National Bank and two other large downtown buildings will be using so much less energy that it'd be like giving a small town a permanent power outage.

In a matter of months, First National Bank, U.S. Bank and 375 Jackson have entered a new era. At a cost of $12.5 million, owner Madison Equities is updating heating, cooling and lighting systems designed before anyone cared about climate change and limiting the burning of fossil fuels to create heat and electricity.

"It cost us almost $100,000 just for the crane and the rigging crew," said Scott Goltz, a Madison Equities vice president, as he examined a gaping hole in a roof level room in the U.S. Bank building where workers busted through to get the old equipment out and new equipment in.

Three shiny new boilers now occupy the space where one of the two old ones sat. "We had 48 trips down and nine up," he said.

Today's energy efficient boilers and chillers are a lot smaller than their predecessors. For instance, a new chiller is about the same size, yet has twice the output. And the motors on water pumps and ventilation fans were swapped in favor of more efficient ones. The variable frequency drive motors are being added to everything from airport escalators to milking machines on dairy farms to save electricity when they aren't in use.

"If the building isn't requiring more air, it will ramp down, so it can run at variable speeds, using less energy," Goltz explained. "In the old days, two weeks ago, when we had a fan on, it had to run full speed."

Goltz says the upgrades were driven in part by tenants' interest in energy efficiency. Energy use experts say that's a significant change from when buildings in many downtowns were built.

"In those days, it was geared more toward tenant and occupant comfort," said Michael Hepfler, an energy efficiency specialist with Xcel Energy. He says the timeline for the St. Paul project was impressive and shows what's possible.

"If you had a motivated customer that had the right building, you could replicate it," he said.

For most building owners, doing something good for the planet isn't enough — it has to also be good for their bottom line. Sometimes that means changing out big equipment, like Madison Equities did, but other times it's trying to squeeze savings out of existing equipment.

Mark Hancock, who specializes in building recommissions for the Center for Energy and Environment in Minneapolis, looks for changes that result in a one-year payback in energy savings on the investment. Sometimes, he said, it just means turning stuff off when no one is around or being smarter about how you heat and cool a building.

"It could be some simple low-cost no-cost items that you go in, such as modifying the schedules to make sure they are appropriate for how the building is being used," Hancock said. "We often find simultaneous heating and cooling going on — a big energy waste."

Businesses can often stomach a one-year payback through energy efficiency without taking out a loan. But bigger projects need outside financing. The Madison Equities project used a federal program called PACE that gives building owners a loan they pay back through property tax assessments.

The St. Paul Port Authority, which administers PACE projects in Minnesota, has helped finance 40 or so since the Legislature created a statewide program in 2010. The projects range from a solar array on a church roof to an energy efficiency overhaul at a shopping mall.

PACE financing covered most of the project cost, though Xcel Energy is providing $1 million in rebates through the state's Conservation Improvement Program. Madison Equities expects to pay back the PACE loan over a 20-year period, and energy use will be cut by 40 percent, said Peter Klein, vice president of financing for the St. Paul Port Authority.

"The three projects are the largest combined PACE project in the nation," Klein said. According to Xcel, the energy savings in all three buildings would be enough to power more than 1,200 homes.

Klein said private investors are lining up because they see the loans as low risk. At least six investors put in proposals for the Madison Equities project, he said.

"There is significant interest in financing these projects," he said. "We're working on a $20 million project."