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Supporters of PACE Programs Fighting Back
Local governments across the country are picking up the PACE in their efforts to continue a popular method of financing energy-efficiency upgrades. Meanwhile, California's governor signed a law making it easier to fund such programs should they get started again.
Leon County, Fla., is the latest local government to file a lawsuit to allow jurisdictions to participate in Property Assessed Clean Energy programs, which allow property owners to finance energy improvements through a line item on their property tax bills.
PACE-type programs were stymied when the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, recommended against them, saying they are risky.
That "guidance" essentially stalled PACE just as many programs, including one that featured Fresno and Kern counties as test cases, were rolling out. The state of California, several counties and cities and consumer groups filed legal complaints to jump-start the financing measures. Leon County filed its lawsuit against the Federal Housing Finance Agency on Oct. 8.
In a related matter, California Gov. Arnold Schwarzenegger has signed a bill allowing the California Public Employees Retirement System, the State Compensation Insurance Fund and the Pooled Money Investment Board to invest in local bonds to fund PACE programs, which could have the effect of lowering interest rates on PACE financing.
The new bill, AB 1873, will likely sit on the shelf until the PACE issues are resolved. Supporters of PACE say the program allows homeowners and businesses to cut their energy costs, would create thousands of jobs for contractors and help the environment.
Leon County Attorney Herbert A. Thiele said county officials hope the lawsuits will lead to a resolution. "It is our hope that Congress will act to resolve the FHFA, Fannie Mae and Freddie Mac’s interpretations so that we can continue to offer LEAP (Leon Energy Assistance Program, its version of PACE)."
Leon County, Fla., is the latest local government to file a lawsuit to allow jurisdictions to participate in Property Assessed Clean Energy programs, which allow property owners to finance energy improvements through a line item on their property tax bills.
PACE-type programs were stymied when the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, recommended against them, saying they are risky.
That "guidance" essentially stalled PACE just as many programs, including one that featured Fresno and Kern counties as test cases, were rolling out. The state of California, several counties and cities and consumer groups filed legal complaints to jump-start the financing measures. Leon County filed its lawsuit against the Federal Housing Finance Agency on Oct. 8.
In a related matter, California Gov. Arnold Schwarzenegger has signed a bill allowing the California Public Employees Retirement System, the State Compensation Insurance Fund and the Pooled Money Investment Board to invest in local bonds to fund PACE programs, which could have the effect of lowering interest rates on PACE financing.
The new bill, AB 1873, will likely sit on the shelf until the PACE issues are resolved. Supporters of PACE say the program allows homeowners and businesses to cut their energy costs, would create thousands of jobs for contractors and help the environment.
Leon County Attorney Herbert A. Thiele said county officials hope the lawsuits will lead to a resolution. "It is our hope that Congress will act to resolve the FHFA, Fannie Mae and Freddie Mac’s interpretations so that we can continue to offer LEAP (Leon Energy Assistance Program, its version of PACE)."
Housing Regulator Still Won't Support PACE
The agency that oversees Fannie Mae still doesn't like or will support PACE programs, telling Congress that the program is unlikely to go forward.
GRIST has all the depressing news in this blog post. PACE, or Property Assessed Clean Energy program, is an innovative way for homeowners and commercial landlords to pay for energy-efficiency upgrades through a property tax assessment.
It's not a loan, but the Federal Housing Finance Agency still can't seem to approve it. It matters to us because Fresno and Kern counties were getting ready to participate in a pilot PACE program and there was hope it would be rolled out to other cities and counties in the San Joaquin Valley - where families suffer from high power bills and low incomes, both of which PACE would help address through energy and cost savings.
The San Joaquin Valley Clean Energy Organization is a nonprofit dedicated to improving our region's quality of life by increasing its production and use of clean and alternative energy. The SJVCEO works with cities and counties and public and private organizations to demonstrate the benefits of energy efficiency and renewable energy throughout the eight-county region of the San Joaquin Valley.
GRIST has all the depressing news in this blog post. PACE, or Property Assessed Clean Energy program, is an innovative way for homeowners and commercial landlords to pay for energy-efficiency upgrades through a property tax assessment.
It's not a loan, but the Federal Housing Finance Agency still can't seem to approve it. It matters to us because Fresno and Kern counties were getting ready to participate in a pilot PACE program and there was hope it would be rolled out to other cities and counties in the San Joaquin Valley - where families suffer from high power bills and low incomes, both of which PACE would help address through energy and cost savings.
The San Joaquin Valley Clean Energy Organization is a nonprofit dedicated to improving our region's quality of life by increasing its production and use of clean and alternative energy. The SJVCEO works with cities and counties and public and private organizations to demonstrate the benefits of energy efficiency and renewable energy throughout the eight-county region of the San Joaquin Valley.
State Energy Officials Consider Alternatives To PACE
California energy officials stood by the embattled PACE program today, but said they also will consider alternatives to the plan that has drawn fire from a federal housing finance agency.
California Energy Commission staffers were adamant that the Federal Housing Finance Agency was wrong, and is essentially punishing homeowners, by derailing Property Assessed Clean Energy (PACE) programs that several counties in California were undertaking.
But commissioners also acknowledged the obstacles - and wanted to ensure $30 million in PACE financing doesn't disappear because it's not committed by the Dec. 31 deadline. So, they reluctantly agreed to consider a Plan B if Plan A - PACE - falls apart. They are scheduled to revisit the issue Aug. 6.
Claudia Chandler, chief deputy director of the CEC, said the staff is conducting a "full-court press" to come up with an alternative. Failing that, the ultimate fall back is to add the $30 million to an American Recovery and Reinvestment Act energy-conservation loan program that has considerable demand.
Chandler and others said PACE remains the preferred option because it enables homeowners to cut energy bills, add value to their homes and creates jobs. In Sonoma County, an in-progress PACE program has financed more than 1,000 upgrades in 16 months, put $30 million of new investment into the community and directly and indirectly created an estimated 330 jobs.
Sonoma County plans to keep its PACE program regardless of concerns by the Federal Housing Finance Agency and the two mortgage giants it oversees, Fannie Mae and Freddie Mac, said John Haig, energy and sustainability manager for Sonoma County.
PACE was designed to allow California homeowners to finance energy-efficiency upgrades through an assessment on their property tax. FHFA opposed the program, saying the PACE debt takes priority of mortgage debt.
California officials say that's not true. The assessments are tied to the property, not to the borrower, and data shows pilot PACE programs have default rates significantly below mortgage debt. And they pressed their case in court when Attorney General Jerry Brown filed a lawsuit July 14 against Fannie and Freddie.
Sonoma County also has filed suit, and an array of legislators have submitted bills to keep up the PACE. In addition, Senate Majority Leader Harry Reid (D-Nev.) said he is willing to add PACE language to a watered-down energy bill if a Republican joins in, according to grist, an online clean-energy publication.
The San Joaquin Valley Clean Energy Organization is a nonprofit dedicated to improving our region's quality of life by increasing its production and use of clean and alternative energy. The SJVCEO works with cities and counties and public and private organizations to demonstrate the benefits of energy efficiency and renewable energy throughout the eight-county region
California Energy Commission staffers were adamant that the Federal Housing Finance Agency was wrong, and is essentially punishing homeowners, by derailing Property Assessed Clean Energy (PACE) programs that several counties in California were undertaking.
But commissioners also acknowledged the obstacles - and wanted to ensure $30 million in PACE financing doesn't disappear because it's not committed by the Dec. 31 deadline. So, they reluctantly agreed to consider a Plan B if Plan A - PACE - falls apart. They are scheduled to revisit the issue Aug. 6.
Claudia Chandler, chief deputy director of the CEC, said the staff is conducting a "full-court press" to come up with an alternative. Failing that, the ultimate fall back is to add the $30 million to an American Recovery and Reinvestment Act energy-conservation loan program that has considerable demand.
Chandler and others said PACE remains the preferred option because it enables homeowners to cut energy bills, add value to their homes and creates jobs. In Sonoma County, an in-progress PACE program has financed more than 1,000 upgrades in 16 months, put $30 million of new investment into the community and directly and indirectly created an estimated 330 jobs.
Sonoma County plans to keep its PACE program regardless of concerns by the Federal Housing Finance Agency and the two mortgage giants it oversees, Fannie Mae and Freddie Mac, said John Haig, energy and sustainability manager for Sonoma County.
PACE was designed to allow California homeowners to finance energy-efficiency upgrades through an assessment on their property tax. FHFA opposed the program, saying the PACE debt takes priority of mortgage debt.
California officials say that's not true. The assessments are tied to the property, not to the borrower, and data shows pilot PACE programs have default rates significantly below mortgage debt. And they pressed their case in court when Attorney General Jerry Brown filed a lawsuit July 14 against Fannie and Freddie.
Sonoma County also has filed suit, and an array of legislators have submitted bills to keep up the PACE. In addition, Senate Majority Leader Harry Reid (D-Nev.) said he is willing to add PACE language to a watered-down energy bill if a Republican joins in, according to grist, an online clean-energy publication.
The San Joaquin Valley Clean Energy Organization is a nonprofit dedicated to improving our region's quality of life by increasing its production and use of clean and alternative energy. The SJVCEO works with cities and counties and public and private organizations to demonstrate the benefits of energy efficiency and renewable energy throughout the eight-county region
Boxer Offers Up Bill To Keep PACE Alive
U.S. Senator Barbara Boxer (D-CA) and colleagues from three other states have joined the fight to keep Property Assessed Clean Energy (PACE) programs in place, offering a companion bill to a House version introduced earlier.
Boxer, Jeff Merkley (D-OR), Kirsten Gillibrand (D-N.Y.) and Mark Begich (D-AK) introduced a bill Thursday to protect the energy-efficiency and job generating PACE programs. "The current uncertainty surrounding PACE programs is jeopardizing $110 million in federal investments for California communities, which is simply unacceptable," Boxer said in a statement. "We must take action to protect these initiatives because they create jobs, save homeowners money on their energy bills and help our environment."
PACE programs create bond-financing mechanisms to loan money for energy-saving retrofits. Owners repay the loans over 20 years through their property-tax bills.
Mortgage giants Freddie Mac and Fannie Mae, along with the Federal Housing Finance Agency, opposed the program because PACE debt is higher priority than mortgage debt should property owners default.
The FHFA ordered Fannie and Freddie to take additonal actions to limit the use of PACE programs in connection with their home mortgages. And there is some concern the controversy could spread to commercial properties even though Fannie and Freddie have no authority over them.
It's anybody's guess what happens at this point. There has been talk of creating a large pilot program to test PACE or abandoning the residential program in favor of one focused on commercial buildings - where there is likely to be more bang for the buck anyway.
The San Joaquin Valley Clean Energy Organization is a nonprofit dedicated to improving our region's quality of life by increasing its production and use of clean and alternative energy. The SJVCEO works with cities and counties and public and private organizations to demonstrate the benefits of energy efficiency and renewable energy throughout the eight-county region of the San Joaquin Valley.
Possible Pilot Program For Embattled PACE?
A New York legislator is proposing that 300,000 homeowners participate in a 30-month demonstration project to determine the effectiveness of embattled Property Assessed Clean Energy (PACE) programs.
The Federal Housing Finance Agency may decide Wednesday whether to adopt the idea, according to grist, an online alternative energy news source, which quoted Rep. Steve Israel (D-N.Y).
"Right now you've got the regulatory community advancing a theory about PACE bonds," he told grist. "You have PACE advocates advancing their theory. Let's test out which theory is valid. At the end of the 30-month period we'll have hard data on which to base decisions."
PACE programs, which allow property owners to pay for energy-efficiency upgrades to their homes through property-tax assessments, have drawn fire from FHFA and mortgage giants Fannie Mae and Freddie Mac.
The three agencies say the program creates risk because PACE loans have priority over mortgage debt if the property owner defaults. Their reluctance to support the program has basically shut it down.
As a result, several counties in California, including Fresno and Kern, that planned programs are in limbo. State officials sued Fannie and Freddie and a House bill that would enable the programs to continue has been introduced.
Israel told grist that he would rather settle the dispute without going to court. His priority, he told grist, is to reinstate PACE programs in regions where they were suspended. Whether Fresno and Kern counties would be included is uncertain.
The San Joaquin Valley Clean Energy Organization is a nonprofit dedicated to improving our region's quality of life by increasing its production and use of clean and alternative energy. The SJVCEO works with cities and counties and public and private organizations to demonstrate the benefits of energy efficiency and renewable energy throughout the eight-county region of the
central San Joaquin Valley.