Peter Lindstrom, a government outreach coordinator with the Clean Energy Resource Team (CERTs) came before the Cook County Board of Commissioners on December 15 with information about a relatively new program that helps businesses and nonprofits get financing for renewable energy and conservation improvements.
Lindstrom appeared with Cook County Local Energy Project (CCLEP) coordinator Virginia Danfelt and unveiled the property assessed clean energy (PACE) program.
For Cook County to take part in PACE, said Lindstrom, the county board would have to execute a joint powers agreement with the St. Paul Port Authority which oversees and runs the program. This agreement would allow the Port Authority to provide financing for improvements located within the boundaries of Cook County.
PACE is not a subsidy, Lindstrom said, and projects must be submitted for processing and to narrow down projects. Projects that are selected are then eligible for awards, he added.
The final step in an application is for the county to approve a project and set the special assessment that will be used to pay back the loan. But that is all that Cook County would be on the hook for, said Lindstrom.
“There is zero risk to the county,” he said, because the program is run by the St. Paul Port Authority, and the Port Authority is solely responsible for implementation and administration of loans through PACE to finance improvements.
How it works
To date 20 plus cities and 11 counties participate with the Port Authority and 18 counties in southern Minnesota have banded together to form a PACE program.
The program promotes savings by providing low-cost, long-term financing. Lindstrom said PACE eliminates high up-front costs, reduces dependence on credit, and allows for comprehensive retrofits that allow programs to recoup their costs.
To start with the property owner identifies potential energy savings that will be used to repay investing in renewable energy. Once those have been identified the owner completes the PACE application and submits it for review and approval. Upon approval the Port Authority sells revenue bonds or uses the revolving loan funds and loans the money to the property owner who then hires contractors to complete the job. The energy savings are used to repay the special assessment against the property, said Lindstrom.
Currently the Port Authority loans out $300,000 per month and gets back a like amount. It was seeded with $15 million by the state and works as a revolving loan fund. Due to the success of the program, the Port Authority is currently seeking more funds to help it grow, Lindstrom said.
Why is PACE run by the St. Paul Port Authority? When this program first became available to Minnesota— it is a nationwide program— Lindstrom said there were too many complications and initial hurdles for towns, cities and small counties to start up and run the program on their own. To make PACE workable, a larger governmental entity had to take on the paperwork/legal duties for the counties and cities and the Port Authority was selected. Today the Port Authority has a staff that is trained to run PACE, he said. Before the Port Authority was picked, said Lindstrom, “Only the city of Edina was able to create a PACE program in Minnesota,” he said.
Who uses it?
Lindstrom listed several places that have used the program to achieve savings on their energy bills. One was a hospital in Mountain Lake, another was a restaurant in the Twin Cities and there was also a solar project in Stearns County. More locally, the Miller Hill Mall is undergoing a $2 million installation of solar, lighting, and insulation improvements through the program.
PACE is new to the Northland, Lindstrom said, adding he expected it to grow through the region.
Qualifications to participate in PACE
Property owners, said Lindstrom, must be current on mortgage and property taxes to qualify for the loan program. “There can’t be any liens against the property and they must not be in bankruptcy proceedings,” he said.
Any improvements must not exceed 20 percent of the assessed value of the property, he said, and the terms of financing must not exceed the “weighted average” of useful life improvements.
Property must be identified as commercial or industrial and businesses include multi-family housing, and nonprofits including places of worship.
There is a maximum of 15 years to repay a loan. Before an application is accepted there an energy audit by an approved energy auditor must be performed, which must show that significant, cost savings can be accomplished. The maximum loan will be 20 percent of assessed value of $100,000, with a minimum PACE loan of $5,000.
Currently the Port Authority is charging 4.5 percent interest, said Lindstrom, with half of one percent (.5) paid to the Port Authority to run the program.
The county does not become liable for debts for PACE that go unpaid if a property owner is delinquent in payment of taxes, so long as the county takes the required steps to keep the assessment in place, Lindstrom said.
Commissioners expressed appreciation for Lindstrom’s presentation, and following a few questions, a motion was made, seconded and passed unanimously to sign a joint powers agreement with the St. Paul Port Authority to start a PACE program in Cook County.
What’s next?
Following the meeting Virginia Danfelt said CCLEP would invite a PACE representative to the county early next year to meet with interested business owners or people who are in charge of nonprofits that could be helped by this program. For more information contact www.cookcountylocalenergy.org.
On December 16, 2015 President Barack Obama announced plans to make PACE financing available to American homeowners so they can invest in clean energy technologies for their homes. When this would be available in Minnesota isn’t known at this time.
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