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County Considers Authorizing Clean Energy Project Financing Program

by on November 13, 2019 5:00 AM

Centre County's Board of Commissioners on Tuesday discussed the possible local authorization of the Commercial Property Assessed Clean Energy (C-PACE) program, a financing structure enacted in Pennsylvania last year that allows commercial, agricultural and nonprofit property owners to get low-interest financing for energy efficiency and clean energy improvements.

With C-PACE, property owners can receive the low-cost, long-term financing from a capital provider then pay it back through a special tax assessment applied to their property equal to the value of the loan. 

"It’s something that essentially, other than time and energy from our staff, does not cost the county anything in terms of just pure dollars," board chair Michael Pipe said. "There would be some technical administrative things that would be done through our assessment office but we’ve talked with our assessment director who said that’s certainly doable."

C-PACE is used in 34 states and was made possible in Pennsylvania with the passage of Act 30 of 2018. To be available within a county, a resolution establishing the program and guidelines is required. Under the Pennsylvania law residential and multi-family buildings are not eligible. 

Six Pennsylvania counties — Allegheny, Chester, Lawrence, Northampton, Philadelphia and Wayne — have authorized C-PACE to date.

County planning director Raymond Stolinas said C-PACE can be established on a countywide or district basis, though all Pennsylvania counties that have authorized it have done so countywide. Any municipality that would be included would notified before a resolution is passed.

The county would appoint a third party administrator which would market the program, review and make recommendations on applications, and ultimately remit the assessment payments to the lender, which is selected by the property owner. The nonprofit Sustainable Energy Fund, which Stolinas has consulted with, has offered to act as project administrator for any C-PACE program in the state, providing a uniform, turnkey platform that can be used at no cost to county government.

Stolinas said the county government's main role is in collecting the financing assessment along with the building's tax assessment and remitting financing payments to the program administrator. Nonprofits that do not pay property taxes would simply receive a C-PACE bill. If the building is sold the lien is transferred with it to the new property owner. 

"When we use the term assessment under C-PACE, we’re not talking about the value of real property," Stolinas said. "We’re talking about the financing amount for projects that deal with energy efficiency."

A property owner would need to have an architect or engineer survey energy and water usage and compare that to the anticipated performance measures to be achieved with the improvements, such as annual energy savings, electric demand reduction, water savings or renewable energy capacity.

C-PACE financing, which has a minimum of $10,000, can be used for a wide array of energy savings measures, water conservation improvements and renewable energy projects.

"It's pretty wide open," Stolinas said. 

The property owner would work with the administrator on determining eligibility, completing the application and capital provider registration.

The county, capital provider and property owner would agree to a statement of levy and lien developed by the county and included with the financial agreement. The program administrator then files the financial agreement and lien statement with the recorder of deeds, which will create the special assessment against the property.

"The statement of levy and lien is really the vehicle that ties everything together with the financial agreement," Stolinas said.

He added that commissioners may next wish to consider drafting a letter to municipalities about a potential resolution and hold a public meeting.

Commissioner Steve Dershem said he would first like to find out more about the interest rates for C-PACE financing versus a standard bank loan to determine how much value the program would have. Commissioner Mark Higgins added that it would be valuable information to have for promoting the program, if approved.

Pipe said Ferguson Township, where Stolinas was formerly planning director and noted he had first looked into C-PACE, inquired with the county last year expressing interest in it. Further evaluating local interest is the likely next step.

"The next steps would be to hold that public meeting but also ask municipalities if they had any interest in it," Pipe said. "I think it would seem to me that doing some sort of public gauging of support would be helpful."

Higgins said the county's own energy-saving renovations initiative has already been helpful and local businesses with older building could benefit from similar projects.

"The county’s energy efficiency project has been very successful," Higgins said. "I’m assuming we have a lot of commercial and industrial property owners in the area who have buildings that are 20, 30, 40, 50 years old that could probably very much benefit from this type of project."

Geoff Rushton is managing editor for Contact him at [email protected] or find him on Twitter at @geoffrushton.
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