A new energy efficiency improvement program, one of the first in the nation that uses energy conservation as an economic development tool, is taking root in the Twin Cities — and one produce company is taking part.

J&J Distributing Inc., St. Paul, signed up to be part of the St. Paul Port Authority’s Trillion Btu (British thermal unit) Energy Efficiency Improvement Program, which distributes federal stimulus funds through the Minnesota Department of Commerce to create a business loan program.

Participating businesses are audited by Xcel Energy Co., and then implement energy-saving practices and procedures, including equipment and facility upgrades, to meet energy saving goals. Their efforts are assisted by the business loans, as well as through rebates from Xcel Energy.

“We’re going to replace all our refrigeration,” said Jim Hannigan, owner, president and chief executive officer of J&J Distributing. “In replacing those, we’re also replacing all our lighting, all our doors, and doing some different types of insulation to cut our energy us in half.”

J&J is looking at spending $1.3 million on the project, Hannigan said.

“Payback is funded by our energy savings,” Hannigan said.

The $1.3 million covers the first of three phases of J&J Distributing’s projects.

“The ultimate goal is to put a hydroponic greenhouse on the roof of a building heated by waste heat from the refrigeration we’re installing, and to create an urban farm,” Hannigan said.

He plans to grow tomatoes or herbs in the greenhouse, and to have it built within two years.

The project focuses on retrofitting existing buildings and warehouses, rather than building new buildings, Hannigan said.

“For years we tore down buildings and built new, but now they’re thinking that was probably wrong,” Hannigan said.

Hannigan said the company also hopes to have its facility LEED certified.