Reversing PACE: Bill would disallow clean energy districts

An energy efficiency measure that passed just last year could be voted down by a House committee later today.

The Municipal & County Government Committee will hold an executive session on House Bill 144, which is sponsored by Rep. Carol McGuire (R-Epsom). It would repeal the law allowing cities and towns to create energy efficiency and clean energy districts.

House Bill 1554 was signed into law in August, enabling municipalities to voluntarily establish revolving loan funds to finance energy efficiency and renewable energy projects of up to $35,000 for both residential and commercial properties. These energy efficiency loans are then financed through increased property tax payments that the property owner is assessed, for up to a 20-year period. The program is also known as PACE, or “Property Assessed Clean Energy.”

McGuire, who testified at the public hearing for HB 144 on Tuesday, had opposed HB 1554. She tells Front Door Politics it was “not good public policy” and had too many technical faults. Moreover, she says, it puts local taxpayers in jeopardy of having to pay for loans that go into default. She says PACE puts towns in the in the position of being banks, that the state already has enough energy efficiency programs and that the program interferes with the market process.

“We already have a lot of things. The banks and utilities have programs. The state does energy audits and has a subsidized weather program,” McGuire says. “This program benefits the few at the expense of everybody else.”

That characterization is not shared by Dick Henry, president of the Concord-based Jordan Institute, an environmental nonprofit which advocates reducing energy use and carbon emissions in buildings. Henry testified in opposition to HB 144 Tuesday. He tells Front Door Politics the creating PACE was a painstaking process and covered many of the objections and concerns raised by McGuire and supporters of HB 144. There is a wide range of financial eligibility caveats for the loans, he says, which are designed to help homeowners save more money annually for their energy efficiency and clean energy upgrades than what they are paying back through their property taxes. If property owners can’t show that level of savings, they are not eligible.

Unlike most parts of the country that heat with liquid natural gas, Henry says 81 percent of homes in New Hampshire heat with petroleum (oil, propane, kerosene). PACE fills a large market void for property owners who would like to upgrade but either don’t have the cash in hand, don’t fit into income guidelines for other subsidies, or can’t afford bank loans, which charge a higher interest rate over shorter periods of time.

“If financing is a barrier, this is a way to overcome it,” Henry says. “This is serious because the state’s economy remains very vulnerable to high petroleum prices … We send out of state 89 cents out of every dollar for petroleum products. That’s over a billion dollars a year now and it’s only going to increase as the price of oil rises. The money saved would be spent here, jobs would be created here.”

The main thrust of the new law, Henry explains, is a “conservative, New Hampshire” solution of local control, allowing communities to voluntarily assist their taxpayers in cutting their energy and heating costs. Towns like Durham and Lee have already established or are establishing programs to take advantage of the new law. Henry says other communities across the state are also considering it. “It’s giving local control to individual communities. It escapes me why it is necessary to intervene and take away local control,” he says.

In its executive session today, the committee could offer recommendations to the full House of ought to pass, inexpedient to legislate or not make a recommendation at this time. The committee could also decide on other alternatives such as a legislative study committee. The bill’s due date out of committee is March 10.

>> Jan. 27, executive session of the House Municipal & County Government Committee, Legislative Office Building, Room 301, 1 p.m.

This Daily Dispatch was written by Michael McCord.

Posted by Hilary Niles on Jan 27 2011. Filed under Commerce, electricity, energy sector, Environment & Resources, Property, renewable energy, utilities, Weekly Briefing. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry