PACE in a Box: Energizing Texas with Property Assessed Clean Energy Programs

1. 2015 An Opportunity for Creating Economic ActivityWith Property Assessed Clean Energy Act;Advancing Facility Improvements and Conservation Related Retrofitsinto Commercial and Industrial Properties

2. Created in Texas for Texans

3. Local Adoption of PACE in Texas “PACE in a Box” is a toolkit of recommendations and document templates for counties and municipalities to: • Create uniform, user friendly, scalable, and sustainable PACE programs • Encourage and support local discussions about forming regional or multi-jurisdictional programs

4. Impact = Immediate • As soon as the City or County Government officially adopts the PACE resolution! • Model Resolution is already written and included in PACE In a Box guide • Put this on your next Council or Commissioner’s Court agenda for approval • Be a PACE Setter!

5. Support & History • SB 385, Sen. John Carona and Rep. Jim Keffer • The coalition: • County Judges and Commissioners Association of Texas • Independent Bankers Association of Texas • Texas Association of Business • Texas Association of Counties • Texas Bankers Association • Texas Building Owners and Managers Association • Texas Combined Heat and Power Initiative • Texas Conference of Urban Counties • Texas Manufactures Association • Texas Municipal League • Texas Renewable Energy Industry Association • US Business Council for Sustainable Development • US Green Building Council • Dozens of other organizations and companies

6. PACE is a Win-Win-Win • Property Owners – lower utility bills, energy independence (CHP) energy efficiency, property value increase • Contractors – source of increase in business, more local hiring, best practices, keeping up with technology advancements • Lenders – new loans, steady & stable process, fully collateralized, 1st lien position, improved asset value • Communities – increased economic development and jobs, improved building infrastructure, more appealing building stock • State of Texas – reduced peak demand, improved grid loading, renewables as source, improved air quality, better water conservation

7. PACEHow it Works

8. Critical Elements • Economic Activity • Conservation through efficiency • People making a Difference • Industry competitiveness • Removing the Barriers to private investment

9. Energy in Texas Today • Texas leads the nation in energy consumption, accounting for 12% of the nation’s energy use and is the fifth largest energy consumer in the world • Demand for electricity has increased 20% since 2000 • Population and Industry growth in Tx is skyrocketing!

10. Projected Texas Population “More than 1,000 people…move to Texas every day.” Gov. Rick Perry, 12/29/2012.

11. U.S. v. Texas Energy Consumption

12. Industrial Sector Energy Consumption Texas 19% Remainder of U.S. 81% Texas’ industrial sector is a huge, untapped market for energy saving retrofits. They understand the value of making these improvements, but have roadblocks to getting these projects done

13. Texas Drought Impact

14. Water: Supply v. Demand

15. STOP: talking about the problem.START: talking about the solution! • Texas Leadership is investing in water and power infrastructure – Water, Energy, Roads • Private Investment in Building Infrastructure – part IV of the solution • By far the cheapest and most affordable supply we find will be the existing supply we can reallocate because of conservation • Old approaches called for mandates or tax and incentive policies that distorted the market and reduced revenues to local governments • New approach…

16. PACE - Fulfilling Critical Objectives • Economic Activity Opportunities are Key • Conservation through efficiency gains • Property owners enhance building stock • Businesses continually look for ways to lower operating costs and increase competitive advantage • Local government is pressured to lead in areas of conservation and sustainability

17. Example:Retrofit Bid for 5-Star Hotel

18. Economic Impact of 5 Star Hotel • Jobs for • general contractors • water conservation companies • lighting specialists • HVAC designers/developers • energy managers • commissioning agents • architects, PE’s, energy engineers, auditors, estimators, • mechanics, plumbers, electricians • Revenue and business growth for lighting, controls, automation, HVAC, financial companies • $1.8M’s economic impact = $9,000,000

19. PACE Tearing Down Barriers PACE Solutions Barriers No down payment and costs spread over time w/ savings Scarce internal capital budget No access to, aversion to financing • Repayment security through senior lien position • Backed by property, not by owner or equipment collateral • No investment-grade credit rating • Lack of collateral assets that don’t fall under first mortgage PACE obligation transfers to the new owner upon sale Uncertain holding period Owner / tenant split incentives Qualifies as NNN pass-thru cost ESCO/contractor guarantees or third party insures performance Skepticism savings/ROI will be realized

20. Regional PACEis best for Texas 1,200 Municipalities 254 Counties 24 Regional Councils of Government

21. PACE Setters

22. Pick Up the PACE Bring PACE to your Community Create a local PACE Program. PACE in a Box provides everything you need including model docs. Volunteer at http://www.KeepingPACEinTexas.org/support-pace/join-the-effort Join our members: http://www.KeepingPACEinTexas.org/join-pace Questions? Michael West Michael.West.ATX@gmail.com Charlene Heydinger Charlene.Heydinger@KeepPACE.org

23. Charlene.Heydinger@KeepPACE.org Platinum Gold Silver Bronze