NAPA – Napa County homeowners who have been asking local planning officials when they can use innovative property-tax-bill-based financing for energy-efficiency projects similar to the program started in Sonoma County earlier this year likely will have to wait until next fall for the opportunity.
County of Napa government officials are exploring options for extending such financing, allowed for under Assembly Bill 811, which was signed into law in August 2008. The Sonoma County Energy Independence Program started lending in March, topping $13 million in loans through October. Marin, Mendocino and Solano counties are among a number of governments around the state and country looking to do likewise.
"There is a lot of conceptual interest," said Steve Lederer, director of the Napa County Environmental Management Department.
The department has received about a dozen calls about AB 811-funded projects. Most of the callers have been homeowners, but some have been contractors and vendors looking to replace revenues lost to the economic recession with energy-retrofit work.
The goal of AB 811 was to encourage owners of residential and commercial property to retrofit their structures to require energy for lighting and temperature control as part of the state's 4-year-old battle against human-made climate change. The built environment and transportation have been fingered as the largest sources in Napa County for contributors to emissions of greenhouse gases blamed for impacting the climate.
Napa County is exploring three methods for launching an AB 811 program: self-funding like in Sonoma County, use of private equity as in Berkeley's program and participation in a regional or statewide program.
In conversations between officials from Napa and Sonoma counties about branching off an existing program, the need for Napa County to bring its own funds to the effort became evident, according to Mr. Lederer. Sonoma County borrows the money at 3 percent interest and lends it at 7 percent, using the difference to pay program costs and employing bonding to recoup funds.
The Napa County Board of Supervisors has expressed support for a program but has scant funds to make initial loans and market the effort until money trickles back in as loan payments.
Local financiers told the county a similar commitment from the county coffer would be needed, and the participation would be short-term.
Napa County has been looking to the possible Bay Area-wide AB 811 voluntary assessment district backed by the Association of Bay Area Governments (ABAG) and utility Pacific Gas & Electric Co.
ABAG recently shelved the effort because bonding was being quoted at municipal bond rates that would have priced the loans to property owners at an unattractive 8.5 percent to 9.5 percent, according to Ezra Rapport, deputy executive director.
"Because it is a new product, it's not being adequately priced in the market," he said.
Because of such startup costs to local jurisdictions and pricing, ABAG and local governments such as Napa County are looking to California Statewide Communities Development Authority's statewide CaliforniaFIRST program launched in September. Renewable Funding and Royal Bank of Canada Capital Markets were selected as partners.
The program is assembling up to a half-dozen localities in the state as a pilot in spring, with the rest of the counties and cities in the state likely to be invited to participate next fall.
However, the high costs of bonding prompted Renewable Funding to back a provision in pending Congressional climate-change legislation, American Clean Energy and Security Act of 2009 (H.R. 2454). The provision, which could be separated from the bill into its own legislation because of bi-partisan support, would offer bond underwriting information through federally supported mortgage clearinghouses and back the loans with Treasury guarantees, similar to those for student loans, according to Mr. Rapport.
Napa County staff plan to provide the Board of Supervisors in April with a detailed local cost estimate for participation in CaliforniaFIRST. Program costs include $12,500 for the county to join, with $10,000 to $15,000 per city or town, depending on population. All the incorporated governments in the valley have noted interest in participating, and the city of Napa has expressed interest in hosting the loan program office, according to Mr. Lederer.
In September, the Solano County Board of Supervisors called for a study of funding options for launching a Solano County Energy Conservation Program in March 2010 as part of the 14-county CaliforniaFIRST pilot. Mendocino County supervisors started its funding study in July. The Marin Energy Authority is in talks with Sonoma County officials and local banks about creating a program.
