ADDISON COUNTY — Homeowners in a half-dozen Addison County towns who would like to take advantage of voter-approved Property-Assessed Clean Energy (PACE) district provisions to help finance energy-efficiency improvements will have to wait a little longer.
But an official of the Vermont Energy Investment Corp. (VEIC), which is expected to help the 32 Vermont PACE towns administer the program, said progress is being made in what he and others say is a complex process of putting regulations and financial backing in place for the $20 million statewide program.
“It’s all taking a really long time,” said Peter Adamczyk, a managing consultant for VEIC, which in turns operates Efficiency Vermont. “It is complicated.”
The Vermont towns that have approved PACE districts include Cornwall, Ferrisburgh, Middlebury, Monkton, Ripton and Weybridge, and most are looking to Efficiency Vermont to run the program for them.
Homeowners in a Vermont PACE district can qualify for long-term loans for energy improvements — including insulation; more efficient hot-water heaters, wood or pellet stoves or even furnaces; and possibly solar equipment.
Because those loans may run for up to 20 years, monthly payments can be equal to or less than the energy savings realized, making them attractive for many homeowners.
In an interview earlier this summer, Ferrisburgh energy committee chairman Bob McNary said residents most likely to benefit might be those who could not easily refinance — possibly seniors who own older homes and have equity, but not necessarily substantial annual incomes. He expected most loans to range from $5,000 to $8,500.
“There are many people ... who have been in their homes for many decades who could take advantage of this program to make their homes much more energy efficient and make life much more pleasant for them,” McNary said.
Banks will only make such long-term loans, however, if they have what are essentially tax liens on properties and are backed by towns’ tax-collection powers.
VEIC officials and many knowledgeable on the process, including Middlebury town planner Fred Dunnington, said it’s unlikely towns will ever have to step in and enforce the tax liens.
Among what VEIC has accomplished, according to a VEIC memo sent to PACE towns on Aug. 16 and forwarded to the Independent by Dunnington, is lobby lawmakers to set aside $1 million as a “loan loss reserve fund” to help hold towns harmless in case of defaults.
Dunnington also said it was unlikely that a homeowner would risk losing a home over payments for energy improvements.
But creating a new program takes time. Dunnington and Adamczyk both noted an “intermunicipal agreement” must be created that will satisfy lenders, underwriters, all 32 towns and VEIC; that the Vermont Department of Financial Regulations had to create underwriting criteria, a step that has been completed; and that a “credit facility” to serve as a central lender must be founded, which Adamczyk said is in the works now.
“We’re just working through the details,” Adamczyk said.
VEIC has been meeting with the Vermont Bankers Association, and Adamczyk said six or eight banks have “expressed a strong interest” in the credit facility that will service the PACE program statewide.
According to PACE’s Aug. 16 update, VEIC, working with state officials who are mandated by state law to work on the program, has also revised Vermont’s PACE law to address issues created by federal regulators, secured funding through Sen. Bernie Sanders’ office to develop PACE materials and processes for participating towns, and obtained funds through the Vermont Public Service Department for an interest rate buy-down for moderate-income PACE participants.
Dunnington said he is sympathetic to how much needs to be done to get PACE off the ground, especially given the fact it is a commercial program elsewhere in the nation and its newness to the Vermont towns involved, which has left many local officials hesitant.
“You can just imagine the complexity,” he said. “There’s a lot to figure out to assemble this.”
VEIC and state officials have also helped Burlington get its first-in-the-state PACE program up and running with that city’s own funding source. Adamczyk said Burlington’s experience will serve as a model and a learning tool for other Vermont towns.
“That’s good news for everyone else,” he said.
SOME TOWNS FRUSTRATED
Still, some towns have been frustrated. For example, Ferrisburgh officials said they perceived a lack of communication, although selectboard chairwoman Loretta Lawrence acknowledged she had not seen the Aug. 16 PACE memo.
The Ferrisburgh selectboard on Aug. 21 signed a resolution in support of PACE, which voters approved in March. Lawrence said several town residents have said they are interested, and board members are hoping to see more concrete documents soon.
“We are willing to move forward, but we still don’t know where the funding is coming from,” Lawrence said. “We can’t really sign anything until we have a clear understanding of funding.”
Adamczyk said many towns have contacted VEIC wondering when PACE will be made final. But he said VEIC has already kept them in the loop, including by sending the regular email updates, while information is also easily available.
Ultimately, however, VEIC and Efficiency Vermont’s role is to administer the program, and the two related entities have done everything they can to help move PACE forward.
“It (the slow progress) has been frustrating to us because nobody has worked harder to move PACE toward completion in Vermont than us,” Adamczyk said.
Again, Dunnington said he believed many towns “don’t understand the complexity” of what VEIC and state officials are facing. Although he understands their impatience, he said PACE is on the way.
“They would love to have it happen,” he said. “It’s just the complexity of the financing piece.”
PACE officials said they hope soon to announce the program subscription period for homeowners. Those interested may contact program manager Carol Weston at email@example.com; more information is available at www.efficiencyvermont.com.
Andy Kirkaldy may be reached at firstname.lastname@example.org.