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Burlington Electric to launch pilot energy efficiency financing program that will allow building owners to repay retrofit costs through tax assessments

From the February 9, 2012 issue of Public Power Daily

Originally published February 9, 2012

By Jeanne LaBella
Senior Vice President, Publishing

The Burlington Electric Department in Vermont is preparing to roll out a new financing program for energy efficiency projects that will allow property owners to repay the costs of building improvements as part of their annual property tax payments.

Vermont is one of 23 states that allows local jurisdictions to create property-assessed clean energy ("PACE") districts to support greater deployment of energy efficiency measures. By incorporating the cost of efficiency retrofits into tax assessments, building owners can amortize the cost over a longer time period.  When properties change ownership, the new owner takes over the obligation of repaying efficiency improvement investments.

The program is appealing to Burlington Electric because nearly 60% of the utility's residential electric accounts are rental housing units and a similar percentage of commercial accounts are rented spaces.  Because tenants often pay utility bills, owners of rental properties often are not interested in spending money to improve the energy efficiency of their buildings.

APPA's DEED (Demonstration of Energy-Efficient Developments) program awarded a $34,250 grant to Burlington Electric Department to study the feasibility of using PACE districts as a financing mechanism. The utility's pilot program was stalled because Fannie Mae and Freddie Mac, the federal home loan mortgage corporations, raised concerns about PACE assessments. Legislation enacted in Vermont last year addressed those concerns, clearing the way for Burlington Electric to move forward with its pilot project.

The utility prepared a detailed report on the development and use of PACE districts as part of its DEED project. The report, which is posted in the DEED Project Database, is available to personnel of DEED member utilities.


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