Kansas launches $34 million energy efficiency

KANSAS - Kansas launched a new energy efficiency program to make low-interest loans available to several thousand home owners and small businesses for upgrading insulation, installing new furnaces and sealing air-leaking doors and windows.

Gov. Mark Parkinson said officials have discussed creating such a program a few years, but the state couldn't afford one until federal economic stimulus dollars became available this year. The state will make $34 million in stimulus funds available to private lenders, who will then write loans.

State officials said during a news conference that homeowners and businesses participating in the Efficiency Kansas program will pay back their loans from the savings on their monthly energy bills, so they don't face out-of-pocket expenses for making improvements. Also, the program isn't limited to poor or middle-class families.

Parkinson said state officials decided to set up a loan program so that when the money is repaid, it can be loaned out again.

"We now have a cutting-edge energy efficiency program that will last indefinitely," Parkinson said. "It's the type of program that we had dreamed about two or three years ago. We just didn't have the money to do it."

Homeowners will be eligible for loans of up to $20,000 and small businesses, up to $30,000. But officials at the Kansas Corporation Commission, which regulates utilities, said loans typically should be between $5,000 and $6,000. Interest rates are capped at 4 percent.

To participate, a homeowner or small business must undergo an energy audit and make what the audit determines are the most cost-effective changes first. The state is working through a network of 14 banks with nearly 90 branches statewide.

Dave Hill, president of the MidAmerica Bank in Baldwin City, acknowledged it will be difficult for people with bad credit or little equity in their homes to obtain loans, but he said the program still will help Kansans make improvements — and generate economic activity.

State Treasurer Dennis McKinney said the state will rely upon the banks to screen loan applicants and market the program so that there's no additional government bureaucracy.

"We think we're engaging good, private sector resources to make sure the money's used efficiently and effectively," he said.

State officials said they hope to increase the number of private lenders participating in the program over time. Susan Duffy, the KCC's executive director, said the commission also hopes to have utilities themselves making loans starting next year.

The program's Web site allows consumers to look for participating lenders and companies and individuals trained to perform energy audits.