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Clean energy financing bill reports out of Senate Local Government, heads to Senate Finance

Delegate Nancy Guy’s bill aimed at helping localities more easily take advantage of creative clean energy financing mechanisms has survived its first hurdle in the Senate, reporting out of the Senate Local Government Committee, 14-1, on February 17.

HB 654 (Guy) authorizes the Department of Mines, Minerals and Energy (DMME) to sponsor a statewide clean energy financing program.  More specifically, this legislation would enable DMME to engage with a private entity in order to develop and administer a statewide Commercial Property Assessed Clean Energy (PACE) program.

PACE is an innovative financing mechanism that enables low-cost and long-term funding for energy efficiency, renewable energy, and water conservation projects.  The appeal of PACE is that it can cover up to 100 percent of a project’s upfront hard and soft costs, and then can be repaid on the property tax bill over a period of up to 30 years, enabling longer payback periods that can be cash flow positive from day one.  PACE financing is repaid as an assessment on the property’s regular tax bill and is processed the same way as other local public benefit assessments (such as sidewalks or sewers).

While several localities have already adopted their own local C-PACE programs, many localities do not have the time or resources to develop and administer their own.  HB 654 seeks to rectify this, creating a statewide framework that any locality could take advantage of.

HB 654 initially passed the House by a wide margin, 75-23.  VACo spoke in favor of the legislation before the Senate Local Government Committee and will continue to support the bill before the Senate Finance and Appropriations Committee, where it will next be heard.

VACo Contact: Chris McDonald, Esq.

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