Multnomah County is partnering with the Portland Development Commission and Energy Trust of Oregon this week to launch a $3 million pilot program that will finance energy efficiency and renewable energy upgrades on commercial buildings.
The PDC will identify up to 10 projects to test and refine its Commercial Property Assessed Clean Energy plan during the next two years. Meanwhile an interagency team will develop a private lender participation model to expand the program beyond Portland’s urban renewal areas.
“A lot of time and effort went into getting this right,” said Commissioner Jules Bailey during Thursday’s board meeting. “This is a proven model. It’s good for jobs, good for the environment and good for safety.”
Lawmakers in 2009 passed legislation that allows local governments to back energy upgrades on commercial property using a special assessment lien. Susan Steward, executive director of the Oregon chapter of the Building Owners & Managers Association said some of her members have struggled to get suitable loans for major retrofits that result in gradual saving over many years.
“We’ve been talking to the county about this for years,” Steward said. “This is such a big deal and such a victory.”
More than 6,000 commercial buildings in Multnomah County have no history of energy upgrades, and commercial buildings overall account for about a quarter of the county’s carbon emissions.
If the Commercial Property Assessed Clean Energy program works, it would help the county stick to its Climate Change Action Plan, said Sam Baraso, a senior policy analyst with the county’s Office of Sustainability. That plan calls for a 40 percent reduction in emissions by 2030.
“The existing incentives are great, but they’re limited for deep retrofits where we get the largest emission reductions,” he said. “We want to stimulate economic development and we believe green jobs are good jobs.”
The Board of County Commissioners Thursday voted to execute an intergovernmental agreement with the PDC to administer the program, starting with a two-year pilot.
Should the pilot prove successful, here’s how the project will work:
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A commercial property owner requests an energy audit from the Energy Trust of Oregon.
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Energy Trust evaluates the property then draws up a list of efficiency upgrades. Those could be anything from changing light bulbs or insulating windows to replacing the HVAC system or installing solar panels.
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The property owner gets bids for the work and submits both the audit and the bids to the PDC for approval.
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Once PDC signs off, the owner secures a loan through a private lender.
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PDC files a benefit assessment lien with Multnomah County. That way, if a property owner were to default, the county could collect through property taxes or even foreclosure.
“This structure gives lenders a lot of security,” Baraso said.
The PDC has fought hard to convince lenders that energy efficiency is a good investment, said executive director, Patrick Quinton. That added security could make a big difference.
Peter West, director of energy programs at the Energy Trust of Oregon, said they work with as many as 8,000 businesses a year to reduce electricity use and costs.
“One tool we have been missing is the easy affordable financing for customers who can’t go to the extent they would like. We need these tools,” he said. “It may have been a long time coming but this is the right time to do it. It’s powerful and we appreciate that.”
CPACE has been implemented in 15 states, where residential properties are a big part of the program. State law in Oregon limits the use of the financing mechanism to commercial properties, although Commissioner Bailey said that could change.
County Chair Deborah Kafoury said she hoped that it would, but the commercial incentive was a good place to start.
“We do talk a lot about climate change in Multnomah County,” she said. “It’s very exciting to be able to do something that could have real benefit to our community.”
