NRDC lawsuit urges federal housing finance regulators to stop obstructing money-saving clean energy program for homeowners
Now more than ever, states are paving the way to a clean energy future for our nation -- leading the way in innovation, and creating the clean energy models that can ultimately be adopted at the federal level.
One great example of this are state programs that make energy efficiency upgrades and small scale renewable energy projects more affordable for homeowners and lower their electricity bills. With these programs, called PACE (Property Assessed Clean Energy) programs, homeowners are already financing clean energy projects like this in California, Colorado and New York – and enjoying the savings. Twenty other states and the District of Columbia have also authorized the programs to move forward.
Unfortunately – federal housing finance regulators have recently interfered, taking administrative actions that have effectively halted these programs nationwide. NRDC today filed a lawsuit against the regulators (which oversee Fannie Mae, Freddie Mac & the national banks) to stop this obstruction.
Americans are lowering their electricity bills with PACE programs
I’ll get to the lawsuit later. But first let me give you a little background on why PACE programs are so good for the environment AND homeowners’ wallets. With PACE programs, municipalities finance the initial cost of energy efficiency improvements or small scale renewable energy projects for homeowners, who pay them off in small increments that are added to property taxes over an extended period of up to 20 years. From the start, homeowners often save more on their bills thanks to the clean energy projects, than the cost of the payments. Participation in PACE programs is entirely voluntary and the payments are transferred to the next property owner if the current resident decides to move. They can be used to fund anything from better insulation, to more efficient windows, more efficient heating and cooling systems, and solar panels
These programs help real people in real ways. PACE programs give American homeowners the opportunity to improve their quality of their live, fight global warming and lower their energy bills – all in their own homes. Just ask Ria Muriello of Babylon, NY, on Long Island. Ms. Muriello, a grandmother of five who was recently laid off from her job, is participating in the Village of Babylon’s pioneering PACE program. As a recent article in NRDC’s OnEarth magazine recounts, she was approved for weatherization improvements, to be paid off in increments of about $899/year for seven years , with help from utility company rebates and federal tax credits. She hired contractors to make her home more energy efficient, including blowing fiberglass into areas around her porch and stuffing dense-pack cellulose into the garage walls. The work was finished in a day and is projected to save her $925 a year on her energy bill. That means even as she pays off the improvements over seven years, she’s projected to save about $26/year – and after it’s paid off she can pocket the full annual savings. The take-home message from Ms. Muriello?: "I'm not feeling drafts and my bills have gone down," she says.
And she's not alone - as this video from OnEarth shows:
New York State received $40 million in Dept. of Energy stimulus funds for PACE energy efficiency programs, out of $150 million that DOE allocated for this service nationwide. In New York, at least 24 communities and three counties have already implemented or are considering PACE programs, including New York City, Babylon, Bedford, Binghamton, Ithaca, Nassau County, Albany County and Tompkins County.
Federal housing finance regulators are standing in the way of homeowners’ savings
This brings me to the roadblock we’re currently facing.
Unfortunately – despite the Obama Administration’s previous support of PACE programs, including providing over $100 million in stimulus funds – the federal housing financing regulators have derailed the programs, instead of applauding their success.
In a backdoor administrative action in July, federal housing financing regulators (the Federal Housing Finance Agency and the Office of the Comptroller of the Currency) issued statements to Fannie Mae, Freddie Mac and the national banks, respectively, that effectively halted PACE efficiency programs nationwide. The result has been a freeze on nearly all existing and planned PACE programs, leaving millions of dollars in federal stimulus funds in question, and thousands of jobs implementing the projects in limbo, in addition to putting climate change goals and economic development plans across the country on hold.
It defies common sense that the federal government is blocking programs that could create jobs, jumpstart our economy, put money in homeowners’ pockets, and fight climate change at the same time. Instead of shutting them down, the federal government should help these programs grow.
That’s why, faced with no other pathway for rescuing PACE efficiency programs, NRDC went to court today in federal district court in New York City (home of NRDC’s headquarters) to file a complaint challenging FHFA and OCC’s actions. Our suit joins similar federal lawsuits already underway in California, and pending federal legislation aimed allowing states and localities to move forward with PACE programs.
Millions of American homeowners in towns across the United States can and should be able to enjoy the same benefits as Ms. Muriello. And we already know how to provide the tools they need to get there — whether it’s adding insulation to attic walls, fixing leaky doors or putting in more efficient windows. Not only does this put money in their pockets and get rid of those drafts, it helps our entire country cut back on harmful global warming and air pollution.
Let’s hope the courts or Congress do the right thing – and give Americans back the PACE programs.