New energy efficiency loan bills panned

Starting today your municipality or your utility can lend your business money for cleaner or more efficient energy improvements to your property, and you can pay it back through your property tax bill or your utility bill. The question is, will anyone want to lend the money.Two laws, remarkably similar, go into effect Aug. 27, and both include residents as well as businesses.House Bill 1554 would enable municipalities to establish clean energy and energy-efficient districts, where the municipality could lend as much as $60,000 to commercial, industrial or multifamily-residential properties. The business could then pay back the loan through an assessment on its property tax bill.House Bill 1377 would allow utilities to establish loan programs that could lend businesses (or residents) as much as $5 million, under terms approved by the Public Utility Commission.In both cases, the loans would stay at the property being improved, even if they were sold, or the utility customer moved out. Thus, the business that would be getting the energy savings would have to pay for it. But apparently no utility and municipality is prepared to adopt such a program.”It puts us in the position of being a bank,” said David Graves, a spokesperson for National Grid New England. “It’s not something we plan to implement in the near future,” said Carlos Baia, Concord deputy city manager for development department.The municipal bill is one of the many Property Assessment Clean Energy, or PACE, bills that have been passed around the country. In New Hampshire, the local governing body – be it a city council or town meeting – would have to pass an ordinance that would create a district where the town, though bonding or using federal Energy Efficiency and Conservation Block Grants, would create a revolving fund to lend property owners money for various improvements recommended by a certified energy audit.The amount of the loan — including all the various rebates, grants and tax credits from other energy programs — could not exceed the estimated energy savings. The loan must be at least $5,000 and be capped at $35,000 per resident and $60,000 per business, provided that the loan is less than 15 percent of the assessed value of the property. And the loan term can’t be for more than 20 years.But such PACE programs have ground to a halt because of a tug of war with the Federal Housing Authority.The agency is worried that the lien would have priority over those issued by Freddie Mac and Fannie Mae.”The blow up at the federal level has left everyone in a standstill,” said Stephen Burrington, chief strategic officer at the Jordan Institute, an energy conservation organization in Concord, who helped move the bill though the Legislature.Of course most commercial mortgages have nothing to do with those federal and quasi-federal agencies, but it would mean “that right now they [municipalities] would need to enact a law that would only serve businesses and there is hope that the gridlock in Washington may get broken. Maybe if we wait two months we could pass a law that would include everyone,” Burrington said.While Burrington said there was a lot of municipal interest in the law when it was first passed, no one is currently going forward with it.No one has contacted the state Department of Revenue Administration about it. The utility law is similar, but instead of a lien, there will be a “tariff” attached to the utility bill at that location.There are also some other caveats – the utility could not finance the program through its rate base nor earn a regulated rate of return.The tariff worries National Grid New England’s Graves. “We are responsible to collect the loan from someone who did not take out the loan. That will be a difficult to apply,” he said.And Martin Murray, spokesperson for PSNH, said, “The law has us looking like banks, but doesn’t permit our normal rate of return. We have real reservations.”PSNH does have a program where it will lend to residents for energy efficiency loans, but that is using federal stimulus money, not its own capital.”We are very interested in doing something similar for businesses, but just not proposing that under this law,” he said.Unitil also said it was not participating at the current time.No other utility has contacted Public Utilities Commission about setting up a program, said Jack Ruderman, director of the agency’s Sustainable Energy Division. – BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW