Legislation would help fund water, energy upgrades

A. Lee Graham lgraham@bizpress.net

Homeowners and businesses wanting to make their properties more energy-efficient have an ally in two companion bills under consideration in Austin. With legislative approval, the bills collectively known as PACE would allow Texas property owners to finance water conservation and energy-efficient upgrades to existing property with long-term loans repaid through local taxing districts under voluntary property taxes. “Older infrastructure is not efficient, period,” said Charlene Heydinger, executive director of Keeping PACE in Texas. She is hoping to push through the Property Assessed Clean Energy (PACE) financing program. Newer water and climate-control systems use less energy than older technology, yet property owners often encounter difficulty in paying for those innovations. That’s where PACE comes in. Proponents say it would create a secure repayment structure, allowing private-sector lenders to make loans to fund improvements at what some proponents of the legislation consider low interest rates. “If banks can loan against property and loans can be paid back through an assessment, you’d be loaning against property instead of the person,” Heydinger said. Almost 30 other states have adopted the approach, which would make several upgrades eligible for funding. For example, property owners could gain assistance in adding insulation, replacing windows and upgrading heating and air-conditioning systems. Water efficiency upgrades could include low-flow plumbing fixtures and pool pumps. Among entities supporting the effort is the Texas Association of Business. “The traditional approach to energy or water conservation has been to create financial incentives through tax credits or exemptions, or worse, discriminatory tax or regulatory policies,” Stephen Minick, the association’s vice president for governmental affairs, wrote in a February letter to Sen. Juan “Chuy” Hinojosa (D-McAllen), chairman of the Senate Committee on Intergovernmental Relations. “The key to the program authorized by SB 385 is a cooperative arrangement between private property owners, lenders and local governments that enables property owners to make valuable improvements to property that reduce demands for energy and water in a way that benefits all parties to the arrangement,” Minick said. Sponsoring SB 385 is Sen. John Carona (R-Dallas); Rep. Jim Keffer (R-Granbury) is sponsoring the companion bill, HB 1094. The Energy Resources Committee adopted a substitute bill for SB 385 on Wednesday April 24, unanimously recommending that it be referred to the Local and Consent Calendar Committee. As of that date, HB 1094 was in the House left pending in committee. Both bills seek to overcome barriers to investment in energy efficiency and water conservation. Although Texas passed PACE-enabling legislation in 2009, officials must either amend or replace the existing statute due to issues raised by federal housing lenders regarding loan repayment. With Texas accommodating new residents every day, the need to provide them with adequate electrical and water services becomes critical, Heydinger pointed out. And increasing the efficiency of infrastructure would allow that with less money. Even if legislators pick up the PACE, Heydinger foresees more challenges. “Figuring out how to implement it? That’s a whole other issue,” Heydinger said. More information on the Property Assessed Clean Energy financing program is available at www.keepingpaceintexas.org.