By Cathie Bird
Unsubsidized energy efficiency financing will make electric service more equitable for many people in rural communities
Clean energy, energy efficiency upgrades and how to make them affordable is a topic that’s been on SOCM’s radar for a number of years now. The Green Collar Jobs and E3 committees have had many discussions and even specific projects that focus on these issues. So have many chapter and at-large members been interested in it.
Last week we got some good news on this front from the US Department of Agriculture.
The Energy Efficiency and Conservation Loan Program (EECLP) is funded by $6 billion in unsubsidized Treasury rate loans available each year through the RUS Electric Program. What’s new is that non-profit utilities serving rural areas can now use that financing to make capital investments for customers, such as energy efficiency improvements, distributed renewable energy systems, and smart grid solutions.
U.S. Secretary of Agriculture Tom Vilsack announced some of the first recipients of these funds last week, including North Carolina’s Roanoke Electric Cooperative. REC will receive up to $6 million to finance improvements for an average of 200 residential energy efficiency upgrades per year over four years.
Roanoke will use the loan to launch a voluntary program called Upgrade to Save, offering to make investments in energy efficiency that allow cooperative members to save money on their bills without making an up-front payment or incurring a new consumer debt obligation. In turn, participants will agree to pay a voluntary tariff on their bill that shares the energy efficiency savings with the utility at a level that assures both immediate savings for the program participants and full cost recovery for the utility.
“Now we can open access to low cost capital for all cost-effective energy efficiency improvements sought by members with sound bill payment history, regardless of income, credit score, or status as renters or home owners,” says REC’s CEO, Curtis Wynn. “This is an important breakthrough for our members because when we worked with a local credit union to offer consumer loans for energy efficiency, we found that few of our members who most wanted energy efficiency upgrades could take on a loan.”
The Upgrade to Save program is based on the Pay As You Save® system (PAYS®) developed by the Energy Efficiency Institute of Vermont. In the Appalachian region, PAYS is the basis for the design of low cost, debt-free, on-bill financing programs that have been successfully operated by utilities in eastern Kentucky partnering with the Mountain Association for Community Economic Development (MACED). Based on experience with these energy efficiency financing programs, the average investment per home is approximately $7,000 with an average annual savings of 25%.
Roanoke’s successful application represents a significant breakthrough for electric cooperatives around the country. Their application and business plan now can be used as a model by other utility co-ops to access this same federal financing for their members.
Rural Utilities Services (RUS) – operating under the USDA’s Rural Development agency, and formerly known as the Rural Electrification Administration (REA) — also administers infrastructure programs that bring broadband, safe drinking water and improved wastewater treatment facilities to rural communities.
Watch the SOCM blog for news on broadband and telecommunications opportunities…coming soon, I hope!
Also, check out this awesome 1999 article about the Roanoke co-op and its CEO, Curtis Wynn. Roanoke Electric Cooperative is the only utility in the United States where people of color are a majority on the board, which is elected by the utility members.