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Proponents of local renewable and efficiency retrofit financing programs are coming back on the legislative, legal, and regulatory fronts. Property Assessed Clean Energy (PACE) programs to finance distributed renewable projects were sidetracked last year when mortgage backers Freddie Mac and Fannie Mae pulled their support at the direction of the Federal Housing Finance Agency. Speaking Feb. 24, California Public Utilities Commission president Mike Peevey observed the Department of Energy and other parts of the Obama Administration support PACE financing and called it “annoying” that the Federal Housing Finance Agency could be diametrically opposed. Peevey urged the state to exert more pressure on the federal agency to reverse it’s stance to reinvigorate PACE programs. In the state Legislature, Assemblymember Nancy Skinner (D-Oakland) introduced an urgency measure Feb. 17 to provide $50 million in state-backed funding to local governments that rekindle or launch PACE financing. Under these programs, municipal governments arrange upfront funding for solar energy or energy and water efficiency installations on homes. In exchange, the property is marked by munis with a lien to pay for the improvements. The $50 million authorization underlying Skinner’s ABX1 14 was established through SB 77 by Senator Fran Pavley (D-Santa Monica) enacted last spring. Pavley’s measure authorized the state treasurer’s financing authority to direct $50 million from the Renewable Resource Trust Fund to support regional solar and efficiency retrofits. That effort, as well as the numerous PACE programs in and outside California, were derailed last July by Fannie Mae and Freddie Mac’s parent, the Federal Housing Finance Agency. The federal agency viewed the muni programs as threatening federally-backed mortgages because the local property assessments were first in line for repayment in the event of a default. Skinner’s urgency legislation directs the California Energy Commission to develop a Clean Energy Reserve Program and secures $550,000 for its work. The Reserve Program is to be overseen by the treasurer’s Alternative Energy and Advanced Transportation Financing Authority. Skinner’s ABx1 14, which requires a two-thirds vote for approval, also directs the state authority to create lending criteria for interested homeowners, including that the loan not exceed 10 percent of the cost of the property. It calls on the authority to provide lawmakers updates on the lending program. On the legal front, a federal panel rejected the federal housing agency’s effort to consolidate in one federal court lawsuits against it. The U.S Judicial Panel on Multidistrict Litigation rejected earlier this month the federal agency’s call for consolidating a half dozen lawsuits challenging its actions effectively halting PACE programs in and outside of California. The judges wanted to avoid slowing down California’s legal challenges. Sonoma County, Palm Desert, and the state sued the federal housing authority (Current, Jan. 27, 2011). “Centralization could disrupt, or at least delay, the progress of the California actions,” the six-member panel ruled earlier this month. Federal Housing Finance Agency spokesperson Corrine Russell said the agency had no comment on the suit and was unfamiliar with a National Association of Regulatory Utility Commissioners resolution supporting PACE programs adopted Feb. 18. “The importance of PACE programs to profoundly influence and broaden adoption of energy efficiency and clean, distributed generation in the residential sector has been recognized by the Obama Administration, as well as over 20 State governments which have adopted PACE-enabling legislation and/or policies,” states NARUC’s resolution. Peevey authored the resolution adopted by the utility commissioners’ organization last week.

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