ARDMORE – After weeks of considering a program that would open up large loans for new or upgraded energy-saving projects in commercial buildings, Carter County commissioners on Monday declined to approve the Commercial Property Assessed Clean Energy Program, or C-PACE, on a county level. Officials expressed reservations regarding the county’s full role in the program and potential liabilities if approved.
According to the U.S. Department of Energy, commercial PACE programs started to appear across the country in 2009 two years after a similar residential PACE program was introduced. The program proposed in Carter County was launched in 2020 and saw the first C-PACE project approved in Tulsa County in May 2021.
In general, C-PACE loans for energy-saving builds or upgrades in commercial buildings come from private lenders but are not directly loaned to a property or business owner like a traditional loan. The loan is instead tied to the building itself and repaid through a special assessment on the property’s tax records.
“These assessments enable longer term loans, up to 30 years, and require no upfront payment. This mechanism lowers the upfront costs of such projects and allow property owners to utilize the realized energy savings to pay the loan,” said Nancy Graham, a C-PACE administrator in Oklahoma, when announcing the first C-PACE project approval in 2021.
Graham is with the Indian Nations Council of Governments, or INCOG, and was among the group that developed the program’s legislative template for county governments across the state to adopt. She originally presented the program to Carter County commissioners during the Jan. 9 regular meeting and returned each week to answer questions about the program.
Commissioners originally asked District Attorney Craig Ladd to review the template that includes a resolution and a contract known as a “memorandum of agreement” all establish the program locally and to appoint a program administrator. Ladd responded on Jan. 23 and claimed contradictions between the program summary and proposed action, specifically regarding the county’s appointment of someone to administer the program on the county’s behalf.
Commissioners on Jan. 23 tabled any action on a local C-PACE program for one week for further consideration.
Graham said she met with Ladd to address concerns in his letter and that he was comfortable with the template being proposed. Commissioner Berry Lee-Brinkman on Monday said he was still concerned about appointing someone to be tasked with levying assessments on properties.
“We do not assess these values and approve these sorts of applications. For me to give this authority to an outside entity that is not controlled by the constituents of Carter County via a vote of their elected officials, it’s giving a power to an outside authority. I have reservations,” said Lee-Brinkman.
The program is limited to specific energy-saving upgrades or new construction and must be thoroughly vetted by the program administrator, lender, and any potential mortgage holder or other lenders before final approval is given by local governments. No loans under $250,000 are available from the 15 lenders associated with the Oklahoma C-PACE program administered by INCOG.
While commissioners would have to approve individual projects in order to allow a special assessment be levied, no public funds are used in the process. Appointed program administrators are compensated from application fees, and private capital providers handle billing and collections for the C-PACE assessment, according to Oklahoma C-PACE.
Graham said that while an appointed program administrator would handle any administrative tasks associated with a proposed project, each project would have to receive final approval from the commission to allow a special assessment be levied against a property.
“The contract, that’s the one that I wanted your district attorney to be okay with, and he is. He wanted to make sure that you all were comfortable,” Graham told commissioners. “I’ve got to bring you back an assessment contract if there’s an approved project that you will sign.”
Oklahoma C-PACE is a collaboration between INCOG, Tulsa County, the Oklahoma Department of Commerce, and the Oklahoma Office of the Secretary of Energy & Environment with nine participating counties. Oklahoma County has an independent C-PACE program administered by the Oklahoma Industries Authority.
Graham admitted the complex nature of the lending mechanism that must be rolled out on a local basis but told commissioners that the proposal for Carter County came after an incoming health care facility showed interest in applying for a C-PACE loan.
“I do have a viable project. They’re on hold waiting to apply,” she told commissioners.
According to the U.S. Department of Energy, legislation allowing for C-PACE lending has been approved in 37 states. Graham said 11 C-PACE loans have been approved in Oklahoma when the sixth loan in Tulsa County was finalized in December 2022. Marshall, Comanche, and Pontotoc counties are among southern Oklahoma counties participating in the program.
While commissioners unanimously voted against the proposed C-PACE program administered by INCOG, Graham said that counties can administer their own programs independently. She said that INCOG hopes to administer the program while it expands initially before turning administration over to local or regional authorities.
In other business, the Carter County Commission on Monday:
- approved minutes from regular meetings held on Jan. 17 and Jan. 23;
- approved road crossing permit for Citation Oil and Gas;
- declared a patcher from District 2 and a Chevrolet crew cab pickup from the Sheriff’s Department as surplus equipment;
- approved a resolution for a fair board election;
- approved county officers’ reports;
- approved requisitions and purchase orders for County Highway, General Government, and all cash accounts;
- conducted an annual tour of the Carter County Detention Center.