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Greater Tulsa Reporter


Energy Assessment Districts to Help with Costs

From Tulsa County by RON PETERS
Tulsa County Commissioner

As an elected official I believe it makes sense to look for opportunities that couple together economic development with energy conservation. Helping commercial property owners lower their energy costs with redevelopment or retrofit projects can be a winning combination for the entire county.

To make this option available to the citizens of Tulsa County, we plan to introduce legislation that would permit counties to create energy assessment districts, commonly known as Commercial Property Assessed Clean Energy, or C-PACE.

PACE programs have been around for about 10 years and now exist in more than 30 states including Texas, Missouri, Arkansas, Colorado and New Mexico.

Under a voluntary PACE program, counties can form special assessment districts to help commercial property owners finance energy retrofits and new construction by placing an additional assessment on their property through private financing. No public dollars or taxpayer funds are used or are at risk.

Implementing a PACE program can address two major roadblocks to clean energy growth at the commercial level: (1) lack of available capital and (2) hesitancy to make long term energy efficiency/renewable energy investments for fear that the indebtedness cannot be recouped.

Unlike other types of assessment districts where the property owners in the district must pay a fee for some improvements, in a PACE assessment district the commercial property owners would have to opt in to participate. There is no requirement that a commercial property owner has to participate. This is the opposite of traditional assessment districts where a property owner has to prove why it should be exempt from paying the assessment.

Financing in a PACE program has many benefits not available through a typical lending arrangement: (1) there is no requirement for any upfront funding by the property owner; (2) the assessment contract on the property transfers with the property upon sale; (3) the commercial property owner has the annual installment included on the property tax statement sent out by the County Treasurer; (4) typical terms allow the property owner at least 10 years and up to 30 years to repay the loan and the energy savings from the improvements to the property often equal or exceed the amount of the annual payment. Finally, if there is a primary lender on the property, the lender must give its consent for the transaction to move forward, ensuring that the transaction is reviewed carefully to insure that the bank is not jeopardizing its collateral. Over fifty (50) national and regional lending institutions have given their consent for PACE funded projects.

Designing a PACE program involves action at both the state and county level. First, a state must establish laws enabling counties to create special energy assessment districts that recognize energy efficiency and renewable energy as public “goods”. Second, once the enabling law is in place, each county would pass a resolution creating the assessment district and authorizing annual assessment lien creation and project financing. Finally, the county would establish administrative and funding processes.

Tulsa County believes the passage of the PACE legislation will provide commercial property owners and developers with a significant tool for economic development, property improvements and energy conservation.

Updated 01-17-2019

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