Apple Valley has cut energy bills in half at its newest liquor store by installing geothermal heating and cooling in the state's first liquor store with such a system.

The system, including nine heat pumps and 70 heat-storing wells, cost $113,000 more than a furnace and natural gas pipe system would, said Scott Swanson, director of the city's three liquor stores. But he said the 15,800-square-foot store, which opened in November 2008, will save enough on energy to recover the $113,000 in six years -- by the end of 2014.

"I don't know anyone [other municipal liquor store that] is doing it," said Paul Kaspszak, executive director of the Minnesota Municipal Beverage Association. "It requires a lot of upside investment," he added. "Apple Valley is pretty progressive in that area."

Frank Ball, director of the state's privately owned liquor store association, said he was not aware of any other liquor store using geothermal energy. However, a state Commerce Department official noted that Mora, Minn., built a liquor store that opened in July 2010 with geothermal technology.

"Apple Valley has integrated most of the [energy efficiency] things you can do in their store," said Tim Doherty of Dakota County Electric Cooperative, which gave the city a $10,000 rebate on its geothermal system.

He noted that indoor ice rinks and businesses using a lot of refrigeration save the most by using geothermal systems. A number of metro cities have installed geothermal systems in ice arenas since 2009, including Woodbury, Richfield, Eden Prairie, Brooklyn Park, Burnsville and Eagan. Last year Eagan opened a new fire station with geothermal heating and cooling.

Woodbury officials have said that their geothermal system has halved the utility budget for Bielenberg Sports Center, which has two indoor ice sheets. The city saved $169,000 in annual energy costs and $66,000 in annual operating costs. It also saves 2.6 million gallons of water a year.

Eagan's geothermal ice rink yields energy and operational cost savings of about $130,000 a year, the city has said.

Doherty, a board member of the volunteer-led Minnesota Geothermal Heat Pump Association, said Minnesota has thousands of geothermal systems in homes, and systems in more than 300 businesses, schools, government or other buildings. In Apple Valley, that includes a dental office and a Marathon gas station.

Doherty said the association has found that commercial buildings using geothermal generally consume about half as much energy and pay for the system three to 12 years, depending on how much waste heat is reused. He said the systems will last more than 50 years. Dakota Electric has a 20-year-old geothermal system at its Farmington office that is running fine, he said.

Swanson said the new liquor store's parking lot, at Pilot Knob Road and 157th Street, covers a field of 70 wells sunk 140 feet into the earth, which maintains a natural temperature of about 50 degrees. A series of pipe loops run down and up the wells and into the liquor store. The pipes carry a harmless fluid that runs through heat pumps to absorb heat exhausted by refrigeration and air conditioning.

The pumps send the fluid into the deep wells to dissipate heat during summer months. In winter, the system supplies heat for the store.

"The parking lot is like a huge battery that goes 140 feet into the ground. We pull up or deposit heat into it," Swanson said. "Instead of spending money on natural gas, we are spending money for equipment to move heat from earth to the building or vice versa."

Swanson compared utility costs for the new store with those at the city's two other municipal liquor stores and one in Lakeville. The new store's power bill was half as much per square foot as the other three stores that have traditional heating and cooling, saving about $65,000 in the first three years, he said. The geothermal system needs no furnace or air conditioning unit, resulting in much lower maintenance costs than stores with a furnace and natural gas lines, Swanson added.

Mayor Mary Hamann-Roland noted that the liquor store was the state's first commercial building to win Green Globes certification for energy and environmental efficiency. She said paying the extra money for geothermal was a prudent long-term decision, especially with rising energy costs.

Hamann-Roland noted that the city's three liquor stores generated a net profit of about $900,000 last year. The new store, which is paying off startup costs, produced about $100,000 in profit, enough to cover five police cars that the city will buy this year.

"Going green has saved us green," she said.

Jim Adams • 952-746-3283