California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA)

Senate Bill (SB) 77: Property Assessed Clean Energy (PACE)-Bond Reserve Fund

On April 21, the Governor signed SB 77 (Pavley) into law. SB 77 authorizes the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) to develop and administer a state Property Assessed Clean Energy (PACE) Bond Reserve Program. The purpose of the PACE Bond Reserve Program (Program) is to assist local jurisdictions in financing the installation of distributed generation of renewable energy sources or energy or water efficiency improvements permanently affixed on residential and commercial properties through the use of a voluntary contractual assessment.

Soon after the passage of the legislation, CAEATFA staff began conducting research on existing PACE programs in the State of California and engaged key stakeholders to receive feedback on best practices, program structure and sound bond underwriting criteria in an effort to develop regulations for the Program. In addition to conducting research on PACE programs across the State, CAEATFA staff also endeavored to become familiar with other successful energy efficiency financing programs across the country to become informed on their best practices.

Workshops

In June 2010, CAEATFA held one public workshop in Van Nuys, California. The focus of the workshop was to obtain input from local jurisdictions and other stakeholders familiar with PACE financing. Soon after CAEATFA began the initial outreach to develop the Program, most residential PACE programs were stalled as a result of legal and legislative challenges at the federal level.

While CAEATFA has not scheduled future public workshops, CAEATFA staff anticipates scheduling additional public workshops and developing Program regulations in the Fall or Winter of 2011.

To learn more about CAEATFA’s ongoing efforts to develop the PACE Bond Reserve Program and to learn about the status of the Program, please refer to CAEATFA’s 2010 Annual Report on SB 77.

Sign up for additional information, updates and notice of future public workshops..

Below is general information on the PACE Bond Reserve Program and the requirements for program implementation as specified in SB 77.

What is the PACE Bond Reserve Program?

Launched in California in 2008, the PACE programs are being pursued across the nation by municipalities to accelerate the retrofitting of residential and commercial buildings with renewable energy and energy efficiency improvements. PACE programs provide loans to property owners to finance energy retrofits. The loans are repaid over 20 years via an annual assessment on the property tax bill. PACE bonds can be issued by municipal financing districts to assist in financing these loans.

If developed and implemented, the PACE Bond Reserve Program will be used to reduce the overall costs of PACE bonds issued by a local jurisdiction. Specifically, SB 77 creates a $50 million fund and authorizes CAEATFA to use this fund to finance reserves for qualifying PACE bonds. The purpose is to minimize the cost of the PACE bonds and to reduce the cost of underlying PACE loans. As a result, it is anticipated that these savings would be passed on to the consumer.

• More information on program eligibility and qualification criteria

Please refer back to this website for future updates or sign up to receive email updates from CAEATFA if you wish to stay informed on the progress of this Program.

If you have any questions about this Program, please contact Martha Alvarez at (916) 651-5105.