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Fayetteville Energy Improvement District - PACE
Fayetteville's Energy Improvement District will manage innovative financing programs for renewable energy, energy efficiency and water conservation improvements on residential, commercial, industrial and other real properties at the request of the owner. This financing program includes property assessed clean energy (PACE) as a financing option.
PACE is a creative financing mechanism that allows property owners to borrow money for weatherization, energy efficiency, renewable energy or water conservation improvements to their property. The security of tying the repayment of loans to property tax assessments combined with low default rates allow PACE to offer very low and extremely attractive interest rates for these improvement loans. PACE is a completely voluntary program that enables private investment for the purpose of energy savings.
PACE enabling legislation was passed by the Arkansas Legislature in the 2013 session and signed by the Governor in April 2013. That legislation allows Cities, Counties or the State to create Energy Improvement Districts within the State of Arkansas. The Arkansas Legislature noted that Energy Improvement Districts would benefit Arkansas by:
- Creating jobs and stimulating the economy
- Generating significant economic development
- Protecting citizens from the rising cost of electricity and non-renewable fuels
- Providing citizens with options for financing improvements that are otherwise not available
- Providing a positive cash flow on energy improvements
- Increasing the value of real property
- Improving the state's air quality and conserving natural resources
- Promoting energy independence and security for the nation and state
The Energy Improvement District will develop a third party administered program that manages innovative financing for renewable energy, energy efficiency and water conservation projects in the City of Fayetteville. This program could manage multiple types of renewable energy, energy efficiency and water conservation financing mechanisms including PACE, and would allow flexible financing options for the greatest number of improvement projects in Fayetteville. Third party administration of the program provides a replicable model for other municipalities in Arkansas and the most long-term sustainable financing program for Fayetteville due to the reduced municipal program development and operational cost and the reduced workload for City Staff in managing the program. Steps necessary for the Energy Imrovement District Board to implement a third party administrated program include:
- Advertise a Request for Proposals (RFP) for third party program development and administration of the Energy Improvement District.
- District board evaluates RFP's and selects the program administrator.
- Work with selected program administrator to create clean energy, energy efficiency and water conservation financing programs, which would include PACE as a financing option.
Under this recommended program there is no budget impact to establish the Energy Improvement District.
Click to see the City Council ordinance packet that creates the City of Fayetteville's Energy Improvement District.
Click to see the adopted Fayetteville Energy Improvement District Ordinance.