PACE Energy-Efficiency Program In Tug of War

Cutting energy use is akin to a pay raise. When landlords and homeowners cut power consumption, they reduce costs. And, as we know, there are only two ways to increase revenue: make more money or reduce expenses.

And here in the San Joaquin Valley - where summer temperatures can climb past 110, power bills are heart-stopping high, unemployment exceeds Appalachia rates and incomes are low - the effects of a lower power bill are magnified.

So, it is particularly maddening to watch the pitched battle around Property Assessed Clean Energy programs, otherwise known as PACE. With them, property owners can finance energy-efficiency upgrades through a line item on their property tax bill, basically an assessment.

Fresno and Kern counties were in line to be pilot cities in a PACE program until the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, decided they were too risky for lenders - even though studies show a low default rate.

And now comes the Western Riverside Council of Governments, which filed a lawsuit claiming its energy-efficiency program was ignored when $33 million in federal funding was distributed. The California Energy Commission said the council's $20 million bid was disqualified because it ignored required energy-efficiency provisions.

Thursday, a Riverside County Superior Court Judge issued a temporary restraining order against the California Energy Commission, essentially blocking it from distributing money and stopping PACE. Now some would say the decision is moot because the Federal Housing Finance Agency's opposition to the program had already effectively suspended things anyway.

But that leaves the Energy Commission with $33 million worth of unspent money, which must be distributed by Oct. 21. The state has come up with a new energy-efficiency program called Energy Upgrade California, but the Riverside judge, according to this account in the Los Angeles Times, (which contains a link to transcripts of the Thursday court hearing) said it is similar to PACE and set a Nov. 4 hearing to consider making the temporary injunction permanent.

The judge also says the Energy Commission could be held in contempt of a July ruling that prohibits issuing PACE money unless Riverside County's bid was considered, according to this story in the Sacramento Business Journal.

But the Energy Commission is arguing that the Riverside County lawsuit should be dismissed since the Federal Housing Finance Agency's ruling put the kibosh on Riverside County's own PACE program too.

"There is absolutely no basis for this order - this litigation centers on a solicitation that the Energy Commission has canceled," said Karen Douglas, chairman of the CEC. "Western Riverside's lawsuit threatens to derail a comprehensive statewide jobs program by holding up $33 million in stimulus funds - funds that would benefit the entire state, including citizens of Riverside County."

So, there we are. Things are murky and in limbo. Stay tuned.