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Bill clears way for green-energy funding

MILLIONS IN FINANCING POSSIBLE FOR PROJECTS SUCH AS AIRPORT CENTER

SANTA ROSA – Sonoma County’s largest business park could get the green light to become a model green community through a newly enacted state law that allows local governments to extend inexpensive loans to residents and businesses for renewable energy and energy-efficiency upgrades.

The new law also could help local governments encourage such improvements to existing commercial and residential property, helping property owners finance high up-front costs, even after rebates and other incentives and before enjoying potentially significant savings on rate-payer energy bills over years or decades.

Assembly Bill 811, pushed primarily by Palm Desert, Berkeley and San Francisco, allows California cities and counties to sell municipal bonds to fund “permanently fixed improvements” to private property the way they can for public works projects. The governments could then pay off the bonds via special districts in which residents or businesses can opt for loans paid back over a certain period via property taxes.

For Airport Business Center, a 450-acre business park near Charles M. Schulz–Sonoma County Airport north of Santa Rosa, AB 811 could be a key funding vehicle, in addition to any grants or public money, for a list of energy- and water-efficiency upgrades envisioned by a group of tenants and property owners, according to a spokeswoman for the Sonoma County Water Agency.

“The county is in full gear to figure out how financing is going to occur,” said Amy Bolten.

The Airport Green Business Group organized earlier this summer and is led by the water agency and businesses in the park such as Jackson Family Wines, which has headquarters and production facilities there. The group wants to lower water and energy bills with efficiency upgrades to their facilities as well as by pumping treated wastewater from nearby county treatment facilities throughout the park to heat and cool buildings via a geo-exchange system. The recycled wastewater also could be used for irrigation.

The water agency relocated to the park a few years ago and has a stated goal to make its operations throughout the North Bay produce no net carbon emissions in coming years.

For further guidance on bond funding for these upgrades, the county auditor’s office is closely watching Palm Desert’s evolving financing program, which the California Public Utilities Commission is looking to as a model for financing such energy improvements statewide. A hearing on the funding structure there is set for Aug. 26.

Palm Desert is exploring bonding options, but one possibility is issuance of two- to five-year bond-anticipation notes based on the forecasted amount of loan volume, allowing loans to be issued immediately rather than a several-month delay during bond underwriting and appraisal, according to Patrick Conlon, director of the city’s Office of Energy Management and a former Sebastopol resident.

Such notes could be rolled into municipal bonds, which would be taxable because improvements were made to private property. To get the program moving even faster, Mr. Conlon asked the city to front $2.5 million from its general fund to kick-start lending.

Berkeley’s city council plans on Sept. 16 to discuss its residential-upgrade loan program tied to property taxes. Like Palm Desert’s program, these loans can be transferred to the next property owner at the time of sale or paid off during escrow, but Berkeley’s program is based more on the Mello-Roos Community Facilities Act of 1982 model presented in pending Assembly Bill 1709, according to Nils Moe, assistant to Berkeley Mayor Tom Bates.

Sonoma County officials hope to complete by year end an AB 811 bond-financing feasibility study, including cost estimations of the Airport Business Center geo-exchange loop, but the study may take longer depending on the scope of envisioned projects, according to Ms. Bolten. Early estimates for the cost of business park upgrades range from $50 million to $300 million.

“We have to know the cost before we can go our for a bond measure,” she said.

For details on Palm Desert’s Energy Independence Program, call 760-837-0287 or visit www.settosave.com. To contact the Airport Green Business Group, call Airport Business Center at 707-578-5344.