A helpful bill that would enable more localities to embrace unique financing for energy and conservation projects has successfully finished its journey through the General Assembly and will be signed into law by the Governor.
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 will rectify this, creating a statewide framework that any locality could decide to take advantage of.
HB 654 already passed the House of Delegates by a wide margin and is expected to see similar success on the Senate floor. The Senate will take a final vote on this measure within the next few days.
VACo supported HB 654 and was been pleased to speak in favor of the bill multiple times throughout the legislative session.
VACo Contact: Chris McDonald, Esq.