1. PACE Property Assessed Clean Energy for Missouri

2. 2 Formula For Getting the Full Story A.K.A. Table of Contents: Who - Invented PACE What - Is PACE Where - Is PACE Found When - Did PACE Happen Why - Is PACE Important How - Is PACE Implemented “Public goods are those which are in everybody’s interest to have, but in no one’s interest to provide.” - The Economist

3. 3 Property Assessed Clean Energy Who? What? Where? When? Why? How? PACE methodology allows for a political subdivision (Clean Energy Development Board) to finance the cost of installing energy efficiency or renewable energy improvements on private property. No upfront payment by property owner Participants repay the costs of the installations through a assessment on their property tax bill. A lien attaches to the property secures the repayment obligation. Lien passes with title.

4. 4 Property Assessed Clean Energy Who? What? Where? When? Why? How? Removes historical barriers to energy efficiency and renewable energy installations: Eliminates initial capital requirements; replaced with yearly payments that correspond to the lifespan of the installation. Will be accessible to residents and businesses of all income levels. Will incorporate both energy efficiency and renewable upgrades to properties. Will be sustainable, scalable, and flexible; it will be self sufficient with little to no public financial support

5. 5 Brief History of PACE Implementation Who? What? Where? When? Why? How? Berkley CA Department of Energy – Pilot ARRA: Jobs Bill – Public Purpose White House  Policy framework (http://www.whitehouse.gov/assets/documents/PACE_Principles.pdf

6. 6 Implementation of PACE Who? What? Where? When? Why? How? “We are going to make it a lot easier to borrow money. We are doing this by encouraging communities to give you the option to pay the expense of retrofitting your home by paying it back on your property taxes”. --Vice President Biden The White House has determined PACE to be a priority mechanism for retrofitting buildings:

7. 7 Brief History of PACE in Missouri Who? What? Where? When? Why? How?

8. 8 Missouri Organizations Supporting PACE Who? What? Where? When? Why? How? City of Kansas City St. Louis County City of Ferguson City of Creve Coeur Kansas City P&l Missouri Municipal League Missouri Bankers Association Missouri Association of Accredited Energy Professionals Missourians for a Balanced Energy Future Renew Missouri Missouri Votes Conservation Missouri Energy Initiative

9. 9 Missouri Ranked 41 st in Energy Efficiency Who? What? Where? When? Why? How?

10. 10 Property Assessment Clean Energy Act House Bill 1692 is Signed by Gov. Nixon In Missouri, PACE was supported by a broad coalition of groups and passed the Missouri General Assembly as part of a bi-partisan effort by a vote of 144-11 in the House as part of House Bill 1692. RSMO § 67.2800 – 67.2835

11. 11 Eligible Measures Who? What? Where? When? Why? How? Insulation in walls, roofs, attics, floors, foundations, and heating and cooling distribution systems; Storm windows and doors, multiglazed windows and doors, heat-absorbing or heat-reflective windows and doors, and other window and door improvements designed to reduce energy consumption; Automatic energy control systems; Heating, ventilating, or air conditioning distribution system modifications and replacements; Caulking and weatherstripping; Replacement or modification of lighting fixtures to increase energy efficiency of the lighting system without increasing the overall illumination of the building unless the increase in illumination is necessary to conform to applicable state or local building codes; Energy recovery systems; and Daylighting systems "Energy efficiency improvement", any acquisition, installation, or modification on or of publicly or privately owned property designed to reduce the energy consumption of such property, including but not limited to:

12. 12 Missouri Model Who? What? Where? When? Why? How? “on July 12th, 2010 Missouri became the 23rd state to pass PACE-enabling legislation. Why is this good news, you ask? Well, for three reasons (at least): Missouri voters have correctly predicted the outcome of every presidential election (save for two, 1956 and 2008) since 1904. Perhaps Missouri will once again be a bellwether, this time for PACE at a national scale? Missouri’s a long way from Berkeley. The passage of PACE in Missouri is an indicator that PACE is a concept that transcends political, geographical, and social lines. We’ve seen this highlighted in other states as well, but this recent news reinforces the trend. Missouri’s bankers backed PACE. A source close to the effort told me that participation from the local banker’s association was critical to getting the bill pushed into law, going as far as saying that their participation was “the only way [the bill] got passed.” Source: Huffington Post

13. 13 Program Steps and Process Cycle Who? What? Where? When? Why? How?

14. 14 Program Process Who? What? Where? When? Why? How? Application: Participant must release access to utility bill Home Energy Audit: From approved contractor. Results determine which measures to install. Cost of audit incorporated into loan. Cost Estimates: Participants obtain written "not to exceed" estimates from pre-approved contractors. Review of Proposal: Review of audit and bid information to ensure the proposed measures have a positive savings to investment ratio. Obtain Funding: Board obtains funding through financing mechanism Notice to Proceed: Issued to contractors. Completion of Projects: Inspection by PACE Program Administrator. Contractor Payment: Board or its designee will directly pay contractor. Repayment: Financing repaid via assessments on participant’s tax bill Measurement and Verification: Review of energy consumption. Determine program performance and which measures have greatest impact.

15. 15 Flow of Funding Process Who? What? Where? When? Why? How?

16. 16 Typical Missouri Community? Who? What? Where? When? Why? How? Owner-Occupied Housing Units...... 4,924 Sample PACE Transaction: Minimum Bond Size Required $5 -10 Million Average Property Improvement $10,000 Assessment Contracts Required 500 Source: U.S. Census 2000

17. 17 Mean: 13,409 Median: 5,180 Std. Dev.: 33,484

18. 18 Mean: 80,800 Median: 37,731 Std. Dev.: 124,842

19. 19 Owner Occupied Residences by RPC Missouri Total: 1,535,202 Ave. by county seat:* 2,527 Ave. by county: 13,350 Ave. by RPC: 80,800 * 290,692 not including City of St. Louis

20. 20 Implementation Who? What? Where? When? Why? How?

21. 21 Aggregation Process Think Carpooling

22. 22 PACE Process Who? What? Where? When? Why? How? Steps  Communities Join Clean Energy Development Board (CEDB)  Accept CEDB Produces Policy Manual  Develop Procedures with Regional Flavor  Accept Applications from Property Owners  Board executes Assessment Contracts  Issue Revenue Bonds When Contracts are of Efficient Scale  Repeat as Demand Requires

23. 23 PACE Stakeholder Perspective

24. 24 Existing Program Comparisons Who? What? Where? When? Why? How?

25. Discussion & Questions John Harris Country Club Bank Columbia, Missouri 573-239-1136 www.midwestpace.blogspot.com www.mocefllc.com