Arkansas Department of Corrections (DOC) makes up roughly 6% of the state’s annual budget, so any opportunity for savings is hugely beneficial to taxpayers. The DOC announced today that it has launched a new energy efficiency project that, combined with the first phase completed in 2019, will help the department save more than $3.2 million per year between energy savings, operational savings, and capital expenditure avoidance. Additionally, the project benefits from new Arkansas solar laws, which allow public entities to take advantage of federal tax credits and net metering rules. The improved efficiencies are yet another step the agency has taken under the leadership of Arkansas Corrections Secretary Solomon Graves to fulfil Governor Asa Hutchinson’s initiative for streamlined state government. 

“Since taking office six years ago, my administration has taken steps to transform Arkansas state government to become more streamlined and cost-efficient,” said Governor Hutchinson. “The latest project from the now consolidated Department of Corrections is exactly the type of transformation we hoped to see. I applaud Secretary Graves and Secretary Keogh for the work they have done with their respective agencies in allowing cost saving projects like this to occur.”

In 2013, the Arkansas General Assembly passed Act 554 creating the Arkansas Energy Performance Contracting (AEPC) program. Act 554 allows Arkansas’ state agencies to participate in energy performance contracts, in which a project’s annual energy and maintenance savings are used to fully cover the cost of work over a specified period. Under the terms of the legislation and AEPC program guidelines, a project’s annual savings must be guaranteed by the company performing the work. 

Secretary Graves said, “I’m excited for yet another initiative that will help us become more efficient in our operations without cutting services. This will result in improved delivery of services and will ultimately save the state and taxpayers money by allowing the Department to reallocate savings to meet other capital needs. I want to thank Governor Hutchinson, the General Assembly, and E&E for giving us the opportunity to improve our facilities with the AEPC program.”

The Arkansas Department of Energy and Environment’s (E&E) Office of Energy oversees the AEPC program, providing technical guidance and oversight on all projects. Becky Keogh, E&E Cabinet Secretary, said the AEPC program “promotes efficiency in state government, having guaranteed Arkansas taxpayers nearly $500 million in savings since 2013. We commend the DOC for its collaborative and innovative approach to reducing costs, conserving energy resources, and creating efficiencies.”

In 2017, the Division of Correction and Division of Community Correction, both now part of the consolidated Department of Corrections, signed Performance Contracts with Entegrity, a Little Rock-based Energy Services Company (ESCO). The Phase 1 Projects concentrated on the Division of Correction’s East Arkansas Regional Unit in Brickeys and Delta Regional Unit in Dermott as well as the Division of Community Correction’s correctional centers in Texarkana, Little Rock, Osceola, Fayetteville, Malvern, and West Memphis.

The 2017 projects included converting more than 17,000 light fixtures to LED, composting food waste for use in prison farm operations, comprehensive heating and air upgrades, and conserving water through a variety of strategic upgrades. In addition, both projects featured 300 kW solar arrays at the Division of Correction’s East Arkansas Regional Unit and the Division of Correction’s Osceola facility.

Since completion, the actual annual savings from the first phase have exceeded the $1.1 million guaranteed by Entegrity to the Division of Correction and the $612,000 guaranteed by Entegrity to the Division of Community Correction. The projects not only paid for themselves but also redirected funds back into the agency’s budget. Building on the success of the first phase, both divisions have approved second phases. The latest projects will include comprehensive upgrades covering the Tucker Unit, Tucker Max Unit, and Tucker Re-Entry Center as well as multi-megawatt solar installations for the Division of Correction and the Division of Community Correction.

Chris Ladner, Entegrity’s founding partner, said, “We’re honored to continue our work in assisting the DOC improve performance and reduce waste. This project will create numerous short-term and long-term benefits that will benefit the agency and its facilities for decades to come.”

Implementation is expected to start at the beginning of the year and be substantially complete in early 2022. This second phase of the projects are guaranteed by Entegrity under Performance Contracting to not only pay for themselves but to also put money back into the state agency’s budget. Phase 2 savings will be realized by:

• Replacing 4,800 lighting fixtures with tamper-resistant LED lighting fixtures, reducing lighting energy and maintenance expenses by 60%.
• Installing 2,300 smart water fixtures, reducing water and sewer costs by 35%.
• Composting food waste through in-vessel, rotary drum digesters, reducing water and natural gas use by more than $150,000 per year.
• Replacing HVAC equipment, performing tune-ups, and control upgrades, reducing operating costs by $100,00 per year.
• Educating select inmates on basic maintenance and operation of mechanical systems.
• A 6.5 MW Solar Services Agreement for the Division of Correction and a 2.5 MW Solar Services Agreement for the Division of Community Correction, pending approvals from the Arkansas Public Service Commission. Together, the solar arrays will save the agency more than $250,000 per year.

The biggest differences between Phase 1 and Phase 2 are the SSAs made possible by the 2019 Solar Access Act (Act 464), which passed with near unanimous support in the Arkansas General Assembly. The SSA will involve zero debt and enables the agency to purchase clean energy that takes advantage of federal tax credits. Combined, the projects result in guaranteed savings of $3.2 million per year for Department.

Secretary Graves said, “We are eager to start this second phase. It is one of many steps we will take in the coming year to improve our outcomes and do our part to continue the transformation of state government.”