COMMERCIAL PROPERTY ASSESSED CLEAN ENERGY (C-PACE) DISTRICT

Transcription

1 COMMERCIAL PROPERTY ASSESSED CLEAN ENERGY (C-PACE) DISTRICT - Participation Agreement with the Governor s Office of Energy Development Adopt or Not Adopt Resolution The Council will consider a resolution authorizing creation of a Commercial Property Assessed Clean Energy (C-PACE) District in Ogden. The Governor s Office of Energy Development (OED) manages the C- PACE program which provides energy improvement financing to commercial property owners, contractors, and developers. In order to participate, the Council must adopt a Resolution authorizing OED to conduct the C-PACE District in Ogden City in accordance with a Participation Agreement. 2013, 2017 (Enabling Legislation) More than 30 states have passed legislation enabling C-PACE. Utah passed the first enabling legislation in In March 2017, the State Legislature amended the earlier legislation by expanding the scope of eligible projects, establishing a statewide C-PACE District, and more clearly defining the process of developing and financing projects. The complete statute can be found at Utah Code Ann a (2017), also referred to as the C-PACE Act. June 12, 2018 The Council Office received an Administrative Transmittal requesting the Council adopt a Resolution authorizing the Governor s Office of Energy Development to conduct a C-PACE District in Ogden. August 21, 2018 The Council held a work session to review and discuss the proposed C-PACE District and the impacts such a district would have for Ogden. Ogden City Council Meeting: August 28, 2018 Page 1 of 3

2 Governor s Office of Energy Development (OED) OED s mission is to advance Utah s diverse energy sector through planning, policy, and direct engagement with the private sector. OED focuses on fostering economic growth through energy development and conservation activities and through the provision of affordable, reliable energy. OED is responsible for executing the Governor s 10-year Energy Plan and for managing the C-PACE program which provides energy improvement financing to commercial property owners, contractors, and developers. Utah C-PACE Utah C-PACE is an innovative program that helps property owners access private-sector financing to install building improvements that can reduce energy consumption and increase the value of their property. C-PACE projects can benefit the State s economy through new investment, job opportunities, energy savings, and improved air quality. The C-PACE District also manages education and outreach, project development, and reporting on behalf of cities and counties that opt-in. C-PACE financing is provided by capital providers in an open market. The financing is secured through a voluntary energy assessment and assignable lien that is levied against the owner s property and is repaid to the capital provider. The financing term is typically based on the useful life of the improvements and can extend up to 30 years. Because the long-term financing can cover up to 100 percent of a building s modernization project cost, and often requires no money down, C-PACE may enable property owners to make substantial upgrades to their buildings. The project s energy savings may outweigh the C-PACE payments creating a positive cash flow for the property owner. Upgraded buildings may also be more valuable after a C-PACE project. In Utah, and many other states, C-PACE is also available to real estate developers who design and construct buildings using equipment that exceeds energy efficiency requirements established by the commercial Ogden City Council Meeting: August 28, 2018 Page 2 of 3

3 energy code. The financing may help developers fill gaps in their financing plan. (Source: Currently the cities of Orem, Provo, and Salt Lake have all executed Participation Agreements with OED. Box Elder and Summit Counties, along with the cities of Logan, Moab, Park City, and Riverton are also considering authorizing and completing the Participation Agreement with OED. The Administration is recommending that the City authorize OED to create a C-PACE District in Ogden. The primary benefits of the C-PACE District to the City would include potential new investment, job opportunities, energy savings for property owners, and improved air quality. The only obligation of the City is to assist OED in promoting the C-PACE District by including information on the City s website, providing information letters to local businesses, and conducting one or more business roundtable events. Benefits to participating property owners and developers could include the following: Financing of up to 100 percent upfront with no money down Financing term of up to 30 years Assessments transfer upon sale of the property Fixed interest rates over the term of the loan Energy upgrades resulting in lower utility bills Utility bill savings can exceed annual payments, reducing operating costs Energy upgrades can increase property values Energy upgrades can save energy and water Property upgrades can grow the local economy and create jobs Property upgrades can protect against changing water and energy rates Council Staff Contact: Janene Eller-Smith, (801) Ogden City Council Meeting: August 28, 2018 Page 3 of 3

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6 RESOLUTION A RESOLUTION OF THE OGDEN CITY COUNCIL CONCERNING THE AUTHORIZATION OF THE GOVERNOR'S OFFICE OF ENERGY DEVELOPMENT TO CONDUCT THE COMMERCIAL PROPERTY ASSESSED CLEAN ENERGY DISTRICT WITHIN OGDEN CITY. WHEREAS, Utah Code Ann a (2017) (the "Statute") establishes the GOVERNOR'S OFFICE OF ENERGY DEVELOPMENT ("OED"), an independent body.. corporate and politic of the State of Utah and establishes the C-PACE District and provides for the creation of new energy improvement financing, which the District has named "C-P ACE" or Commercial Property Assessed Clean Energy. WHEREAS, Pursuant to Section 11-42a-106 of the Utah Code, OED may only "establish and administer" the C-P ACE District in a Governing Body if a Governing Body authorizes it do so by resolution. WHEREAS, Ogden City ("Governing Body") wishes to authorize OED to administer projects through the C-PACE District within its municipal boundaries. WHEREAS, OED and Ogden City have agreed on the terms of the C-PACE Governing Body Participation Agreement in the form attached hereto (the "Participation Agreement"). NOW, THEREFORE, the Ogden City Council hereby resolves: 1. The Governor's Office of Energy Development shall be authorized to conduct the C p ACE District in Ogden City in accordance with the Participation Agreement. 2. The Ogden City Council hereby: (a) adopts the above recitations as findings of the Governing Body ; (b) authorizes the Governing Body Attorney, in consultation with the Mayor or designee, to make such changes as may be needed to the Participation Agreement in order to co1tect any nonmaterial errors or language that do not materially increase the obligations of the Governing Body; ( c) authorizes the Mayor to execute the Participation Agreement following review and approval by the Governing Body Attorney; and ( d) authorizes the Mayor or designee to execute any and all other necessary letters, orders, or documents as may be required to facilitate the successful implementation of the C-PACE District in the Governing Body. 1

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