Pace yourself. The term is construed to mean moving deliberately toward a goal, but as advice to elected officials PACE yourself is an opportunity for municipalities to create energy efficiency and economic opportunity without waiting for a higher government to pay the bill.
But if New York is to PACE itself, the state Legislature must act to correct language in the law passed last November that currently limits options for funding the program.
PACE is the Property Assessed Clean Energy program, which allows for communities to create a local development corporation that can provide tens of thousands of dollars to building owners to make energy-related improvements ranging from erecting solar arrays to improving the insulation rating of the structure.
That money is then paid back as part of one”™s property tax bill over a time frame as long as twenty years. If the property is sold, the arrangement remains in place with the new owners until the loan is paid off. The payoff for owners is that the amount repaid each year is less than the savings generated by the improvement.
PACE is only one of an array of options businesses and homeowners can access in New York state to help fund improvements in their buildings to increase their energy efficiency or install renewable energy equipment.
The opportunities were highlighted at the Keeping PACE with Energy Options conference held March 13 at SUNY-New Paltz, with an array of sponsors, including the sloop Clearwater, Central Hudson, Sustainable Hudson Valley and the state”™s energy arm, NYSERDA (New York State Energy Research and Development Agency).
PACE programs originated in 2007 in Berkley, Calif., in a local bid to reduce greenhouse gases. In New York state, 40 percent of greenhouse gasses are emitted by buildings, said Jackson Morris, senior policy advisor for the Pace Law School Energy and Climate Center.
There is no connection between the same-named university in Westchester and the PACE program.
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Since 2007, 27 states have passed PACE-enabling legislation, with New York signing on in November. In New York so far, the Long Island town of Babylon, and Nassau and Albany counties have initiated PACE programs, as has Bedford.
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While climate questions have been part of the debate in favor of PACE, economics play a crucial role in gaining widespread acceptance for the idea. “It”™s OK to save the planet and save money doing it, in fact, it”™s imperative,” said Morris, speaking at the SUNY-New Paltz event. “It must be an opportunity, not just a sacrifice.”
The Town of Bedford and 13 adjacent towns are taking the lead in exploring PACE options, acting initially in a bid to reduce the carbon footprint of the area, but now seeing economic opportunity as another motivation to act.
Bedford town Councilman David Gabrielson has 20 years experience as an investment banker specializing in municipal finance and is leading the efforts by the Northern Westchester Energy Action Coalition. Bedford will serve as the pilot project for the coalition.
Gabrielson said PACE reduces emissions, but also creates jobs and investment in a community. And he said it is voluntary. To access funds, the town can set up a local development corporation, which in the case of the Energy Action Coalition, will be a local distribution company (LDC) that encompasses the 14 participating towns. The LDC will then sell bonds on the private market to raise capital that sets up a revolving loan fund to provide funds up front to businesses and homeowners to make energy efficiency retrofits or add renewable energy equipment.
Financial markets are interested in purchasing such bonds, Gabrielson and Morris said, because tying repayment to property taxes provides enormous reliability since property taxes are paid so reliably. The loan would be capped at 10 percent of the value of the involved property.
There is a glitch in New York. When the original legislation was passed within the span of one week in November, it mistakenly used language that ties the PACE program to federal stimulus funds as the only legal source of funding for the program.
Morris said it could be relatively simple to modify the language and expects to see a bill making the fix introduced this session. But he said municipalities should not await the fix before passing a resolution adopting PACE, because state legislators are more likely to act if they see a backlog of municipalities ready to move on the matter.
