HomeMy WebLinkAbout05062020 PACAB Laydown - Kaluza Rural Energy 5 /46jaoao
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To: Laura Schneider, Chair and PACAB Members, Christy Terry, Mayor
From: Phil Kaluza
Date: 05/04/2020
Subject: Support for the Rural Energy Savings Program (RESP)
I am writing to you for support of the USDA Rural Development loan program for rural
communities. I had solicited interest last fall as the program funding cycle was coming to an
end in hopes Seward would take advantage of the program as future funding was not certain.
Fortunately, a new funding cycle has recently been announced.
Though, not surprised, I am very disappointed in the negative comments our electric utility
manager recently made regarding the program. I am very pleased with the research city
council member Tony Baclaan made that clearly refutes the negative disinformation being
provided by our electric utility manager.
The first round of funding beginning in 2017-2019, 19 rural utilities in 11 states participated for
a total funding of$51 million dollars. Not just three recipients as the electric utility manager
alluded to.
The concept of using on-bill financing programs to support energy efficiency programs have
been around for over 30 years in one form or another. The key to the success of these
programs is the well established extremely low default rates of less than 1% that have been well
documented. These facts clearly dispel the gloom and doom suggested by the unsupported
electric utility manager's comments.
ACEEE provides an excellent overview of on-bill financing past and present:
https://www.aceee.org/toolkit/2020/02/bill-eneray-efficiency
Eligibility is available to all ratepayers. Rich, poor, homeowners, renters, small business
property owners and renters... Generally any ratepayer in "good standing" is considered
eligible. No credit reports, no financial disclosures, no leans. I read where utilities have used
the program to assist struggling homeowners making utility payments become a more reliable
customer by helping reduce their energy costs. Again, because the loan can be tied to the
meter, if a property is sold, the future owner will assume the debt and the energy savings
benefit. Interesting concept how even renters can work with landlords to make efficiency
improvements that are then passed on to the next renter. So, a long term rental with a business
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could be financed as an example. The goal is to include essentially ALL ratepayers and save
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energy.
Though the program is designed to operate under a utility billing structure, for Seward as a city
owned electric and water/sewer utility, the electric utility department does not, nor need be
involved. In fact, given our electric utility manager's recent comments to dissuade the city from
participating, the electric utility department is the least appropriate city department to run such a
program as it would certainly languish and die unused. I would suggest a more appropriate
department such as, the Community Development. They appreciate the need for a sustainable
future for Seward and the need to reduce our community's burden on energy costs and address
climate change as a serious problem for Seward's long term survival. In partnering with the
Finance department I believe we have the capability to make a difference.
The program funding is available for essentially any energy saving measure. Last fall, my initial
thoughts were a way to fund heat pumps and provide benefit to both the ratepayer and the
electric utility and expand into other measures as we build up the program. In my meetings with
the Rural Development folks in Palmer, this was an acceptable approach. Contrary to the
electric utility manager's misstatement that it was an all or nothing program.
I could go on about the economic benefits of injecting say a million dollars into our economy
during these troubling times and the jobs it would create or all the environmental benefits that
would result. All at little or no cost to the taxpayer as the program is designed to be
self-supporting with the low interest rate applied to each loan. I would also think as city funding
is seriously diminished and city employee jobs at stake. now would be a good time to consider a
program that could help pay to keep staff.
In a previous life I was the State Energy Program Manager for AHFC. For over 5 yrs I was
responsible for implementing the AHFC Home Energy Rating Program. Managed the
development of the rating software, coordinated the training and certification of dozens of
energy raters across the state and ultimately oversaw thousands of energy ratings that were
tied to mortgages and rebates. Yes. I think Seward can easily manage the Residential Energy
Savings Program. We have trained Alaska home energy raters, weatherization assessors, and
commercial auditors qualified to assist us. AHFC, AEA and many other state organizations are
available to offer help. I would be happy to offer my assistance as a volunteer to work with a
dedicated group to implement RESP.
I urge your support of the Rural Energy Savings Program through a motion/resolution to the City
Council that we submit a letter of interest, under no obligation, to USDA to begin the process
ASAP while funding is available.
Thank-you.
USDA United States
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Rural Energy Savings Program (RESP)
What does this program do?
The Rural Energy Savings Program(RESP) provides loans to entities that agree to make affordable loans to help consumers
implement cost-effective,energy efficiency measures.This program,authorized by Congress in the 2014 Farm Bill,helps to build a
cleaner and more sustainable domestic energy sector for future generations.RESP will help lower energy bills for rural families and
businesses and will reduce barriers to investment in energy efficiency projects or activities.
Who is an eligible borrower under this program?
Eligible applicants include current and former Rural Utilities Service(RUS)borrowers,subsidiaries of current or former RUS
borrowers,and entities that provide retail electric service in rural areas.
How is RESP different from the Energy What are the Loan Terms?
Efficiency and Conservation Loan The RUS borrower is eligible to apply for a loan of up to
Program (EECLP)? 20 years at a 0 percent interest rate.(Up to 4 percent of the
• RESP offers a lower-cost financing option—a zero percent loan total may be used for startup costs.)The RUS borrower
interest rate; can charge an interest rate of up to 3 percent for relending to
• RESP also has a broader pool of eligible borrowers(utilities, qualified consumers.
nonprofit organizations,municipalities and states),while
EECLP program borrowers are limited to utilities that serve What governs this program?
rural areas; These loans are made available under the authority of
• RESP offers longer loan terms:20 years versus 15 years for section 6407 of the Farm Security and Rural Investment
EECLP loans. Act of 2002(7 U.S.C.81O7a)(Section 6407).
How may funds be used? How do I learn more?
Funds may be used to implement energy-saving measures, For more information about the program,please contact
or for energy costs incurred by qualified consumers. Robert Coates at Robert.Coates@wdc.usda.gov.
How do we get started?
Applications for the RESP program will be accepted on a
first-come,first-served basis until funds are depleted.To be
considered for funding,applicants should submit a letter of
intent to RESP@wdc.usda.gov.More information is available
in the annual funding announcement published in the
Federal Register.
NOTE:Because citations anc other informaticn may oe subject to please always consult
the program instructions listed in the section above titled'•what Governs this Program?'You
may also contact your General Field Representative for assistance.You will find additional
forms,resources,and program information at www.rd.usda.gov.USDA is an equal opportunity
provider,employer,and lender.
Last Updated December 2017