AETL Frequently Asked Questions

AETL Question Categories 

 

Program Eligibility and Overview Information


 

Can utility companies participate in the program?

Yes, if the utility has a North American Industry Classification System (NAICS) code of 22.


 

When does the program start?

The program will be launched in January, 2010.


 

How many projects will you fund?

AET loans will be made as long as funds are available.  Once the first round of projects are completed, the loan repayments will be used to issue additional loans.   The AEO aims to make this loan fund a permanent, or long-term, funding option for Arkansas industries.


 

Once the first round of projects is funded, how long before the second round will be funded?

It will depend on how quickly the first round of loans is repaid.


 

Will it affect other tax incentives or the ability to participate in other funding opportunities?

No.  Participants are still eligible for all other incentives, however the incentives may reduce the loan amount (still researching that requirement) and the loan can be used in a bundle for as part of an overall financing strategy for a larger loan.


 

Is there a list of projects in queue for the rest of the companies to see?  Will there be a way to gauge how much loan funds are left?

Yes, information on number of projects in progress, and loan funds available will be posted on the AEO website.


 

Is there a list of clean technologies that are acceptable?

There is no all inclusive list of specific projects.  All projects have to be performed using commercially available technology.  Program funds cannot be used for research and development purposes.  


 

Energy Calculations, Assessments and Measurements


 

How will future markets be assessed in conjunction with energy saved?

Project will look at energy saved- not the cost of the energy.   Since energy rates are subject to change, the program’s results are based on the change in energy used.  Program assumes similar weather and loading of equipment, unless evidence is provided to the contrary in the application.


 

Are there licensed energy consultants who can be used by companies for energy assessments?

A list of Energy Service Company’s (ESCO’s) that wish to do business with these types of services  can be found on the Arkansas Department of Finance and Administration’s Energy Savings Project’s Page.  Regional Industrial Assessment Centers can also offer information about these types of services at no additional charge for companies that meet certain criteria.


 

Can the energy assessment be paid for with loan funds?

Yes, the price of the energy assessment can be included in the loan.


 

Can a certified energy manager (CEM) be considered for conducting energy assessments as opposed to utilizing a licensed professional engineer (PE)?

A PE or CEM may perform the energy assessment provided that the individual is current in their certification and has the appropriate experience and expertise to perform the assessment.  If the proposed project involves a change in system design, installation of a new system (for example something other than simple lighting modifications or “like for like” component replacements with higher efficiency components) the project shall have a PE review.  The PE review may be performed by either the company or the independent technical review as long as the company agrees to modify the design based on results of the PE review.  


 

What are the requirements for hardware to verify energy measurements?

A maximum metering cost of 3% of the energy efficiency measure would be allowed as part of the coast of the loan.  Any additional measurement and verification (M&V) equipment needed that can be directly linked to the M&V for the project would be the property of the company purchasing the equipment. 


 

Budget and Finance  


 

What is the range of interest for the loans?

Interest rates will be below market and determined during the underwriting process.  The market rate at the time of closing will be used to determine the starting point of the interest rate with an option to lock in the rate at an earlier time. To encourage companies to commit to energy efficiency projects with longer returns on investments, a lower interest rate will be considered for the extended period. Market rate to be utilized is the rate at time of the loan closing. Examples of typical loan rates include: 

  • Loan Term 6 – 10 years = 2% below market rates
  • Loan Term 3 – 5 years = 1.5% below market rates
  • Loan Term 0 – 2 years = 1% below market rates


 

Is early payoff of the loan acceptable?

Yes.  


 

What happens if quotes become obsolete within the application time frame?

Participants are allowed to include a maximum of 10% of the loan amount for contingencies.  Participants should inform the AEO if projected costs are significantly over or under budget.   It should be noted that only actual costs are reimbursed.


 

How do you handle “suspended” items?

AETL funds are dispersed to industries based on invoices.  Only actual costs are reimbursed.  If the project ended under budget the remaining budget reserve is released and used for additional loans. 


 

What happens if the 10% contingency reserve is not enough to cover actual expenses?

The project must be completed at the company’s expense.


 

Is cost segregation required?

Yes.  There must be sufficient detail in submitted invoices to support the reimbursement.  All major equipment and specific energy saving components will need to be reported to verify that the appropriate equipment is being used.  


 

Reporting and Disclosure  


 

Will all of our information regarding the AETL become publically available?

No information that is proprietary or could be used to gain a competitive advantage will be released.  DOE reporting requirements focus on energy use/demand reduction (on a total project scale not individual project), greenhouse gas reductions, and jobs created etcetera.


 

What about compensation data?

Compensation data will be required only if the criteria stated in the bullets below is correct.  Names and total compensation of each of the five most highly compensated officers of the company for the calendar year in which the loan is awarded is required if in the company’s preceding fiscal year, the company received:

  • 80 percent or more of its annual gross revenues from Federal contracts (and subcontracts), loans, grants (and subgrants) and cooperative agreements;  
  • and $25,000,000 or more in annual gross revenues from Federal contracts (and subcontracts), loans, grants (and subgrants) and cooperative agreements; 
  • and the public does not have access to information about the compensation of the senior executives through periodic reports filed under section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 78o(d)) or section 6104 of the Internal Revenue Code of 1986.    


 

What information will be required of company reporting?

Please see the reporting section of the AETL Project Implementation page for a participant’s reporting responsibilities.

Arkansas Energy Office (AEO) will summarize a participant’s programmatic information for quarterly and annual reporting to the Department of Energy (DOE).  The report to DOE will only have information by sector, not individual company or facility.  AEO will report the following information that is applicable to the individual project:

Energy Savings (kwh equivalents) 

  • Annual reduction in natural gas consumption (mmcf)  
  • Annual reduction in electricity consumption (MWh)
  • Annual reduction in electricity demand (MW)
  • Annual reduction in fuel oil consumption (gallons)
  • Annual reduction in propane consumption (gallons)
  • Annual reduction in gasoline and diesel fuel consumption (gallons)  

Renewable Energy Capacity and Generation

  • Amount of wind-powered electric generating capacity installed (MW)
  • Amount of electricity generated from wind systems (MWh) 
  • Amount of photovoltaic generating capacity installed (MW) 
  • Amount of electricity generated from photovoltaic systems (MWh)
  • Amount of electric generating capacity from other renewable sources installed (MW)
  • Amount of electricity generated from other renewable sources (MWh)  

Emissions Reductions

  • Amount of green house gases reduced (CO2 equivalents) 
  • Amount of criteria air pollutants reduced (tons)  


 

Do we have to worry about company information being released to competitors? 

The AEO will work with participants to ensure that no information will be disclosed that will give a competitive advantage to other companies.  Participants should clearly mark in their loan application information and project reports information that is not to be publically disclosed.  No proprietary information will be released.

  

  • Arkansas Energy Technology Loan Fund

    Now accepting loan applications for industrial energy efficiency and clean technology projects. 
    Read more >>