Back to Work - Bill Clinton [60]
The president’s plan includes $25 billion for investments in school infrastructure. It’s a good start, but the money could go even further if put into a loan guarantee fund and/or incentives to utilities to decouple and finance retrofits themselves.
10. States and localities should have their own retrofit initiatives. States can provide their own loan guarantees or mandate decoupling of rates. Beyond that, they can provide for payment of retrofit costs over time on property tax bills, on the theory that even if a building or a house changes owners, the utility bill still goes down, so the current beneficiary should pay the loan off. California has already passed legislation authorizing this procedure.
In some states, the electric co-ops are helping to finance retrofits. And whenever a city is served by a municipally owned utility, the public utility can decide to finance home and building retrofits without seeking federal or state approval. It’s interesting that the only state in the country where all homeowners are served by municipal utilities is conservative Republican Nebraska. Apparently, this is a government function its citizens have decided not to put on the antigovernment hit list. As a result, Nebraska has provided fertile ground for a pioneering effort to offer homeowners an eight-hour retrofit, with utility savings averaging more than 20 percent.
Arkansas has a unique program called HEAL, Home Energy Assistance Loan, in which employers first retrofit their buildings, then take the savings and offer loans to their employees to retrofit their homes. The employer is repaid from employees’ energy savings. The program was developed by my foundation’s Climate Initiative with a small grant from the state’s stimulus funding for clean energy. Martha Jane Murray, the architect who runs the program, also oversaw the Climate Initiative’s work on low-income housing retrofits in New Orleans after Katrina, where 50 percent energy savings were achieved. The idea behind HEAL is to make workplace retrofits the norm and to create both the demand and the financing for employee residential upgrades. The work now under way with HEAL’s employers and their employees is already projected to save $250,000 a year and to create a lot of jobs. This is a public-private partnership that could be set up anywhere. The savings achieved and the jobs created should assure big-time expansion of the program.
The challenge with all these efforts is how to take them to scale. If Congress refuses to establish an infrastructure bank, states, big cities, or groups of states and cities could set up their own infrastructure bonds and perhaps attract some of the capital that would have gone to the national bank.
On retrofits, New York may have found the way to scale them. On August 4, 2011, Governor Andrew Cuomo signed a groundbreaking energy-efficiency financing program called on-bill recovery. Homeowners with modest incomes can all participate because they will repay the loans as a line item on their utility bill. The monthly loan repayment will be less than the savings they will realize from the benefits of the retrofit, thus providing a portion of the economic gain to the home-owner right away. It’s estimated that over the next four years, one million homes and businesses could be retrofitted, creating ten thousand to twelve thousand jobs per year and saving New Yorkers an estimated $1 billion on their utility bills.
11. Get the pension funds involved. Public-employee and labor-union pension funds should finance investments in the infrastructure bank and in energy retrofits, especially for schools, colleges, and government buildings. They offer decent returns at very low risk and, unlike many investments in their portfolios, will create a lot of jobs, many of them for union members. The AFL-CIO’s president, Richard Trumka, and other union presidents, along with CalPERS, the California Public Employees’ Retirement System, have already committed to raise $10 billion for this effort.