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276404 PINKE - FINANCERK � 5.,,.��,C A CANARY - DEPARTMENT . G I T Y O F S A I N�T PA U L COUIICII ��V��La BLUE - MAYOR File NO. � i Council Resolution Presented By Referred To Committee: Date Out of Committee By Date WHEREAS, the City of St. Paul recognizes the need for residential energy conservation and establishes conservation as a high priority; and WHEREAS, the Minnesota State Legislature has also recognized the need for residential energy conservation in this state and has mandated the Public Services Commission to initiate a pilot program for Utility Financing of Residential Conservation Improvements by January 1, 1981; and WHEREAS, the City of St. Paul and Northern States Power have designed the enclosed Energy Loan Fund Proposal to best use all available resources, yet creates a simple process for the residential owner to finance energy conservation measures; now, therefore, be it RESOLVED, that the City of St. Paul endorses the enclosed Energy Loan Fund and urges Public Utilities Commission approval. and be it finally RESOLVED, that the Joint Program would take place providing that the City � has commitments from the Legislature to inerease the housing bonding program and that a UDAG grant or another source of funding would be made available be- fore this program would proceed as a �oint program. �,'F l "� i t COUNCILMEN Yeas Nays Requestgd by Department of: 41rwl� � Levine � In Favor Maddox McMahon snowai�r A gainst BY Tedesco Wilso FEB 19 1981 Form Approved by City Attorney Adopte y Coun � . Date — Ce �fied V• sed by ou il Secjetar BY Appro by fVlavor: Dat "�EB 2 3 1981 Approved by Mayor for Submission to Council By BY �.ts�t€o FEB 2 S 19�� . - 1 - SUMMARY Northern States Power Company and the City of Saint Paul have agreed to establish a non-profit corporation, the Energy Resource Center, for the purpose of providing one-stop financing for weatherization and related structural measures for residential structures in the City of Saint Paul. Funding for the Energy Resource Center will be provided by an NSP commitment of $800,000, a City tax-exempt note issue of $1,000,000 and such other funding as the City of Sain� Paul _ is able to obtain through grants or additional bond issues. The Energy Resource Center will provide several types of financing: Deferred Principal and Interest Due on Sale or Transfer vt Property Up to $625,000 of the NSP contribution will be used to make approximately 300 weatherization loans, repayment of the " principal and interest of which will be deferred until the weatherized property is sold ox' transferred . The interest rate for the deferred payment loans will be four points below the City tax-exempt note rate. No income restrictions, except normal credit considerations, will be applied to these funds. Deferred principal and interest financing attempts to balance the increased financing cost with increased attractiveness and, thus, increased par�ticipation in th� program. Installment Loans The $1, 000,000 in City tax-exempt notes will be used to make approximately 40Q weatherization loans, monthly payments on the principal and interest of which would begin immediately after loan closing. The loan term would be ten years and the interest rate four points below the note interest rate, which is expected to be 10-11�. No income restrictions, except credit-worthiness, will be applied to these funds. (This provision requires a legislative action described in , the Funding and Cost Recovery Section below. ) These loans � are identical in terms with the deferred payment loans; those residents who do not wish to have the encumbrances on their property imposed by the deferred payme�t financing will be able to choose installment-tyge loans. Other Weatherization and Structural Loans To the extent that the City of Saint Paul is successful in obtaining additional funds for the Energy Resource Center, additional loans for weatherization and weatherization-related structural measures will be offered by the �nergy Center. The terms and eligibility requirements for these loans will depend on qualifications attached to the monies by the funding agencies. It is expected that these additional funds may provide financing for residents and for building types not eligible for the deferred payment or installment loans. - 2 - � All loans will be secured by liens or other security interest applied to the weatherized property. The exact form of the security interests is still to be determined and may vary by loan and building type. The Energy Resource Center will be located at Saint Clair Avenue and West Seventh Street, the future site of the NSP Saint Paul Learning Center. NSP will provide the major share of the administrative funding for the Center for the first two years of operation; the City of Saint Paul will provide staff for the Center from its Energy and Housing/Redevelopment offices. Energy audits for weatherization loans will be provided through the NSP Minnesota Energy Conservation Service (MECS) program. Weatherization loans will be made for all _ energy conservation measures found to be cost-effective by the MECS audit for individual structures. Deferred payment and installment loans will be limited to buildings of four or less units. The maximiun amount of a deferred or installment loan will be $3 ,500 per dweliing unit; the minimum amount will be $500 per unit. The Energy Resource Center will also provide referrals to other sources of conservation assistance and will distribute energy-related information. It is anticipated that the Energy Resource Center will operate in two phases: an initial two-year lending phase followed by a repay- ment phase of approximately eight to ten years. The Energy �Resource Center will be evaluated following the lending phase to determine its future operations. . _ 3 _ REGULATORY AND LEGAL CONSIDERATIONS,_, While NSP is committed to the establishment and operation of the Saint Paul Energy Resource Center, it must be recognized that we can do so only in conformance with legal, regulatory and other constraints which may impose restrictions or necessitate changes in any or all program elements described in this proposal. This plan for the Energy Resource Center represents our best effort to design a program which can operate within known constraints but, _ should any additional constraints be discovered during program design or operation, they will, of course, take precedence. NSP' s participation in this and other Conservation Investment demonstration programs is also dependent upon receiving a satis- factory ruling from the AZinnesota Public Utilities Commission regarding treatment and recovery of program costs, as described in NSP' s Application f or Rehearing and Reconsideration of January 19 , 1981. In order to obtain tax exempt financing at reason- able rates the lenders must have assurances that they will receive timely repayment of principal. As is detailed in the Funding and Cost Recovery section below, the proposed financing arrangement will result in a temporary cash deficit due to deferred �ayr�ent loans not yet recovered at the time of note maturity. Because the Energy Resource Center cannot, by itself, provide any reasonable assurance that it will be able to make the principal repayment when due, the lenders will look to NSP' s credit as its means of covering any shortfall in principal. In order to assure the lenders that NSP has an approved means of providing such funds, it is necessary that the Commission approve a mechanism now for generating the revenues which may be necessary in future years. In addition, this mechanism must, assuming this test is successful, protect NSP 's credit issuing capacity should this concept be expanded beyond the pilot programs . � Program implementation also depends upon certain legislative changes with regard to the types of security interests H,rhich may be applied to the weatherized property, the bonding authority of the City of Saint Paul and income or other restrictions on the use of the money from the City notes. If the $1,000,000 to be financed through the sale of the City tax exempt note becomes unavailable or contains restrictions unacceptable to NSP, we will make deferred payment loans froin our $625 ,000 commitment pending the City' s being able to join the Resource Center under � acceptable terms at a later date. We assume these changes will be forthcoming during the present legislative session but, if they are not, details of the Energy Store financing and operatian may be changed from those described herein. - 5 - CORPORATE STRUCTURE The Energy Resource Center will be a Minnesota non-profit corporation, incorporated under Diinnesota Statut�s Chapter 317 or another appro- priate legal mechanism. The authorities and responsibilities of each party will be set forth in the articles of incorporation and bylaws of the corporation. Northern States Power will participate in the corporation by means of a business agreement or contract. A broadly- based Board of Directors will be selected for the corporation by _ mutual agreement of NSP and City of Saint Paul. It is anticipated that the Board of Directors will select and hire a director for the corporation using funds provided jointly by NSP and the City of Saint Paul. In general, the City of Saint Paul will provide partial staffing for the Energy Resource Center from their Energy and Housing/Revelopment Office and will solicit in-kind contributions to help defray admin- istrative costs. Northern States Power Company will provide up to $175,000 over two years to provide facilities , administrative costs and additional staff for the Energy Resource Center. In addition, NSP will also provide the necessary energy audits for weatherization loans through its Minnesota Energy Conservation Service (AZECS) program. _ 6 _ , ' ENERGY RESOURCE CENTER FUNDING AND COST RECOVERY PROPOSAL As described previously, the Energy��Resource Center will be a tax- exempt organization formed for purposes which include providing financing for residential energy conservation improvements. The proposed funding of the Energy Resource Center that is provided pursuant to this pilot demonstration agreement will come from two sources. The first source is a commitment from NSP of not more than $800,000 . About $175,000 of this amount will be allocated to operating and administrative expenses of the Energy Resource Center. The second source is a $1 million loan from the City of Saint Paul that originates from a tax-exempt note issue. The two sources of funding will be combined to form a $1,625, 000 pool of money that can be used to finance residential conservation projects. The Center will lend our $625,000 in deferred principal and interest repayment loans. These loans will be secured with a lien on the loan recipients' property and will be repaid with approximately 6� simple interest per year when the property is sold or transferred. The remainder of the financing funds will be lent out on 10 year installment contracts at approximately 6� compound interest. The $625, 000 that will be lent out on deferred prineipal and interest repayment contracts corresponds to the portion of NSP 's contribution to the Center that can be used for financing purposes . Assuming all deferred loans are repaid in 10 years, and the principal amount is escalated at 6� simple interest durinq that period, this amount will generate a cash flow of $1 million by the lOth year. This corresponds to the principal value of the $1 million note issue. It is the intention of the Center to allocate the cash flow from the deferred repayment loans to payment of the note principal at the time of maturity. The $1, 000,000 that will be lent out on 10 year installment con- tracts corresponds to the principal amount of the tax-exempt note that Saint Paul intends to issue on behalf of the Center. It is anticipated that the note will have a 10 year term and an interest rate of approximately 100. If these funds are lent at 6� compound interest, the annual repayments will total $133,225. Of this amount, the Center will allocate $100,000 to pay the interest on the note, with the remainder to help cover the administrative and operational costs of the Center. Thus the installment loan repayments will not be generating a fund to repay the note principal; instead, as described above, repayments of the deferred loans will be used to pay the note principal. The interest rate and note term figures used in the preceding analysis are not fixed. They will basically be determined by the terms of the note sale. It is expected and desired that. they will be the figures used in the analysis. It is the Center 's intention that the interest rates for the individual loans, both the install- ment and deferred repayment contracts, will be established at a rate 4� below the note rate. � � �� 't3 U � O � rti � r--i , � � � � r-I � td rti �s o a a� i1�U N �v ,� o � U +� o �, � � O r-i ,Q '� N � �d 3-I 1.n p.,o r. a N •� o tn � � Uo v1 � a� � . � N v •.� o U � a p, o N _ � � � 4� N � � � v � +�� ao Q � Q�� � � z z � � � H y.a � � f-1 �I O Q � O ,L: �J O (A Q o � � V O O N .►.► � 0 0 -N � _ c� a -o U � r. W o � � !-t 'Z7 -N H o .-i � �., rtf � cn U �� o � � N . w � i U o t� � � +� z1 U � � � o .uw v� a�i � . � -° a° —.�. o 0 oNi o .�. o.E- a�i cr t�r] � N .�. ao ' � o x •� •� W �2 -N 3-� +� � +� � N � rCS a �� z ..� a�i t�ir , f-�i o o a � � � 2 w a O � � r'"'�-I � �� � }-� 2 V a � � ?� Z Z � W 2 c�n a �i-�i u�i N U ... � � N N f1�O U xo � Wo � � O U1 M 'J N � " � n `� :� a � `� a�, ��., � � wo -� cn � � r--t � -� � W � � n � w t!] O �-I � .-1 •.� •,-I t/�. � � � � �� � � � � O � � .'"� _ ? _ This Energy Resource Center funding proposal is contingent upon the capability of Saint Paul to issue a tax-exempt note on behalf of the Center and the assurance that P1SP will be able to recover the cost of its contribution, including the coverage of any shortfall in the Note Retirement Fund. In order for Saint Paul to issue a note on behalf of the Center, a legislative amendment on tax exempt note requirements will be needed. Legislative removal of income restrictions , requirements or guidelines applied to use of the $1,000,000 City tax-exempt note will also be sought. NSP' s payment of the note principal is dependant on the removal of this restriction. - Zt is recognized that the City of Saint Paul will be seeking additional funds for weatherization programs from UDAG and other sources. Provided the above legislative changes are made, the success or failure of the City to obtain thes� additional funds will not alter the financing mechanism proposed for the $1,625,000 described above. The assurance that P1SP will fully recover its cost will require � specific PUC approval. The nature of this approval is specified in the introductory letter for this filing. The advantages of this Energy Resource Center funding proposal over NSP 's original proposal are the lower cost of capital for the financing funds and the convenience of a one-stop weatherization financing and referral center . It is intended that the Energy Resource Center will actively function for a two-year period in arder to make loans from this funding. At the end of the first two years of operation the Energy Resource Center concept will be evaluated. Of necessity the evaluation will be incomplete because the results will be influenced by what occurs in the remaining eight or more years that the loans are outstanding. This evaluation will be a part of the Conservation Investment Pilot Demonstration analysis. The procedure will be specified as part of the plans for evaluating the eff ectiveness of the inv�stments which are to be filed with the PUC on April 1, 1981. _ _ 8 _ , ADMINISTRATION - OPERATION The Energy Resource Center will be located at the future site of the NSP Saint Paul Learning Center, at Saint Clair Avenue and West Seventh Street. Until the Learning Center is completed, the Energy Resource Center will be housed in mobile office buildings at the Seventh Street location. Costs for the temporary quarters are included in the administrative costs for the Energy Resource Center. - The Energy Resource Center will: Process Loan Applications Interview Loan Applicants Provide Energy Audits through the t•SECS Program Make Weatherization and Related Structural Loans Inspect Installations � Arrange for Call-Backs Collect Loan Payments Promote the Financing Programs Provide Conservation Information Maintain Corporate Records Provide Referral to Other Financing Sources Staff and services would be provided to the Energy Resource Center from the parties shown below: Saint Paul Inspector . 2 Loan Officers 2 Rehab Advisors 1 Administrator Solicitsin-kind Contribution of Printing and Production Costs Solicits in-kind Contribution of Legal Services NSP . Audits (throuqh MECS program} for dwelling of up to four units Administrative costs to cover: � � Space, Utilities, Equipment, Supplies Receptionist/Secretary Administrator for Loan Officers Call-back Arrangements Billing and Collections Inquiries and Mailings Corporate and Accounting Gosts Cash Flow Costs Contingency Costs __ _ �. .. .,,_.._.,..__: __.__-.__�....�..._.�,..,,_.,..�.. _ g - . � It was decided that, although loan servicing through customers' utility bills has certain advantages in terms of convenience and conservation education, the administrative difficulties connected with this means of loan servicing m�ke it impractical to implement at this time. Thus, loan servicing will be performed by an accounting service firm under contract to the Energy Resource Center. Although it is anticipated that outside billing will continue for the duration of the program, effort will be directed toward resolving the problems with utility 3oan servicing so that this option may become possible at a later time. After the initial phase of the Energy Resource operation, the costs of continued loan servicing will be paid for from the excess annual income from _ installment loans (see Funding and Cost Recovery section above) . Estimates for Energy Resource Center administrative costs are, at best, uncertain. In recognition of this uncertainty, during the first two years of operation of the Energy Resource Center, excess annual income from installment loans will be available to defray administrative costs in excess of those estimated. - 10 - , ADMINISTRATION - LOANS . The Energy Resource Center will provide the types of weatherization financing shown in Figure 2. Both deferred payment and installment loans (Columns A and B) will be available to residents from all areas of Saint Paul with no prior restrictions, except credit- worthiness, placed on applicants ' income level. In recognition of the fact that the number of available deferred payment and install- ment loans is small compared to the number of residences in the City, and that one of the goals of the program is the evaluation of customers' response to the several financing options, a phased - approach to promotion of the Energy Resource Center and its f inancial programs would be appropriate provided such an approach results in a sample of loan applicants which is representative of the population of the City of Saint Paul. Promotion of the Energy Resource Center will be synchronized as much as possible with the phased introduction of the MECS program in Saint Paul. It is expected that weatherization loans will be secured using some type of lien attachment to the praperty. Several tyges of liens or other attachments may be required to accommodate various building types and requirements attached to funds from various sources. This matter has not yet been resolvecl. � � . 41 N N o � Ri N V O � � � U � ,�C o p c� �--I X H U � = x� , � � °' N � • . � a � .-. O E� N .-� +� -1-� �-► W •rl � C1 � U o R3 � �n cn � O � -t� N W �n �- o >, � +� � � rt 2 � � S� H �Q � � O rt3 H L: ?-I ?t N •ri '� N v� •.i pq �., d? tT tA '� r-I •rl �., [Q I � � U �1-� •X r� .'� 7�-1 RS r-I O •S�1 N � t!) � U1 � O � � O ..[ � O N N O rtf .� � U1 •rI N o .0 � � � +► a � �+ va o �n � +► -�+ v •�+ •� FC N a � o • .� rts � s� a� s� .�► a o �c w o o � �, M �, a, b s� ro b � � w FC � � v� � c�r a 3 .--i � u � N .� 3-I N � � t� N +� V �/�, �^, QM t. W �`✓. 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MECS energy audits will also be provided for loans made from additional Saint Paul funds for weatherization of structures having four or less dwelling units. Financing will be provided for all MECS Energy Conservation measures _ (except load management devices and replacement central air- conditioners) which are found to be cost-effective for a particular dwelling based on the MECS criteria for cost-effectivenesss. These mFasures are shown in Figure 3. They correspond to those specif ied in NSP' s Demonstration Proposal, which the MEA judged to meet the requirements of M.S . �216B.241 (1980) . Measures involving the use of renewable resources will not be eligible for financing. Customers will not be required to install any particular group of cost- effective measures but must install a combination of ineasures which result in a cost of at least $500. Structural measures for which financing may be available from other Saint Paul-obtained funds will depend on conditions applied to these monies by the funding agencies. Determination of structural measures and eligibility requirements will be the responsibility of the City of Saint Paul. Deferred payment and installment loans wil,l be available for structures of up to four dwelling units . Loans from additional sources may be available for other building types. Deferred payment and installment financing will be provided for eligible measures installed by contractors on the Minnesota Energy Conservation Service suppliers list. Financing will be provided for materials for owner-installed measures upon presentation of. proof of purchase and successful inspection of the completed installation. Inspections of the type required in the MECS program will be required for all owner-installed measures, all installations of furnaces or heating equipr►ent modifications and a random selection of up to 25% of installations of the remaining eligible weatherization measures, ..r,.�....�.�.,..:,...... _ ,_...�..a.�a,.�._..,�.��.,....,.,....��.....^�.w._�_.�_�..��._.__.^_....___..�._r�_..:.�.r.��. . �....,..�-,M.e,�..,,�.�.,,.,,..,,, Figure 3: Energy Conservatian Measures Eligible for Deferred Payment or Installment Fi,nancing o Caulking o Weatherstripping o Replacement Gas Furnace or Boiler _ o Energy Eff icient Heat Pump o Replacement Furnace Burner o Flue Opening Modification o Electrical or Mechanical Ignition System � o Ceiling Insulation o Wall Insulation o Floor Insulation o Duct Insulation o Pipe Insulation o Water Heater Insulation o Storm or Thermal Windows o Storm or Thermal Doors o Heat Relective/Absorptive Glazing Material o Clock Thermostats (Gas-heated Residences Only) ; , � �''�.��';` CITY OF SAINT PA.UL �; ` �((� OFFICE OF THE CITY COIINCIL �` '�I O �e 3 �_"" / • — � 11��%'9lM1:• 9 . �.j��.,p E�Cn��.�.�[ . ����. `�: _ Da t e : February 24, 1981 :�> �; COMMITTEE REPORT TO : Saint Paul City Council FROM � Committee on ENERGY, UTILITIES AND ENVIRONMENT JOANNE SHOWALTER , chai�man, makes the foi lowing report on C. F. C] Ordinance [� Resolution � Other TITLE : Resolution requesting the Public Utilities Commission approve the Energy Bank Proposal and order Northern States Power Co. to work with the City . to develop and implement the Energy Bank as a pilot program for Utility Investments in Energy Conservation. On February 19, 1981, the City Council passed a resolution, Council File No. 276404, endorsing the Energy Loan Fund (formerly known as Energy Bank) and urging Public Utilities Commission approval . CITY fIALL SEVENTH FLOOR SAINT PAUL, MIN\ESOTA 55102 �r{:::s,�_. :�.�- zi . . . _}� . . .. . . - � '� .,. •..,.- . ..,-. . ,,. �.., . . � , .. .. '.�. ,. . . \ . ' " ' . e _,.. , 'y . - . . ��. . � . ' � . . . " . , . r ._. ._.� .". .^: . .:. , �_ . .; ` , m,�-. . .` . - - . . . . . ' . . _�." . .1 . �. .- . . .. , � - � � . . ' � " i• . ` . - ... ` . . . - - � . . � � � � , . . - . � � /� ,. _ ', . ' ._ � . . � . . . . . � . ' ' . 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' fh� Dsc�aber 9�s 19�, t2r City Cauncri� r3f�rr�e1 to t� Bnerg'►, ` : ' U ilitie� d� mviroer�eat t�oimitt�e for ca��r�t�ior� ae�d :r�ao�tada• - • � � ._ tion. s rasolutioa �eqwstiag t�he Publ#,a_ t?�tli�ies �o■rias�crn #.a � � ap rav�s tbe �rgy H� Propossl at�d order �orthtrn Bt.�tss P�r , ��� SY �� at d � � to �r1c �r�t2i ths Ci�jr to d�inelop and iap2�a� !ta E�r � � . �at�ic as- a p�ilot progi�aa for Utility Ia�est�enta� ia' Eaer� C�rvrt.� ; t Y� "�ic�. P�.ease disr9e� iqy rarl�er 1rEtsr whf.e� �dw�cter�jr , �� � r�trrr�d t�rt mertter t,o the 1'inaace, M�a�ut b Prs'so�el (:o�ltta�. 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Decteabe'�'�� 198t1 � , . . m . , �_� ' Counc�.l.KOU�n Josane Sl�al�er � Che�ir�n, L�nergy, t3Lilitiea 6 8nviroament Committee _ `' 7th F3�.00r, ^ity Hsll , _ ��7 � �� Dear Co�;ncilwoman sho�ralter: �,;-; The CitY Council reF�rre�l to tbe Fiiu�nc�s� lib�ns�ent 8� Ptrso�el Coa�itte� for�eonsideratian and reco�►endati,on, a reaoluttoa ` :v requestin�z th� Publie Utilities Commission to approve the �erFpt :•u Bank Proposal and order Porthern 3tat�e Fbwer �Co. to rtork wi#.h - fi� the City to develap and implement the Energy Hsnk ae a pilat progrv. • `J �'`' ,� ' for Utility Inv+est.mcnts in Ener� Conserv�Lion. .. . ,� � �; -�:. . � . Very truly`your+��. �; , . . . . . " � . , . . . _ . . . . . . � <4� . ' , . � � � . . - � �� . �.�� � - �� .. . - �/� a3 d; . . .. . . � . . . ' . . . . _ . . ... � . . .. . . � .. , . . . . . .. . ' /� 1\�8�.�.A �� - . . • :,�.h� � • : City Clerk, � - ;� �r � _ ..<� , , �, ,,.X � _ - - 'z a� ' � . . . . . . ,, . � , . -.-�'.Y ,^;: 1�'1'.�lC�l• . �.� kH0 21ai► . '\+. � ;r , . . �� :�� , : ,, . , _, ��. ce s l�i�yvr La�im�sr , `, ' : e . ,,, , � f . : ',; �� , ,;' ;`�� , , - _ ;,�� � - � _ �: . ` � ' : ,` .. � ' . . � � .. � . . ,. . . .. . . �i� .`p � . .. . . . • _ . . . . . } ` ; . � . . . . . � � � . . _ . . � � . . � • . �� �, `'$ .. � . .. - , . . . . . . .. . . .. � ..uP.T+ � _ . . . . . . . " .Y p�• ''� '�`::. . . .. ..r. . . . � _ . . . . . . . . . .. � � t4 * �.+E . . ,� , ' � � � . . � � . �. � � � �. . . � ;t ,� ��� �a� % .. . • .-.; '�1 -'���.w,��� ,- , � � �� ' ' WHITE - CITV CLERK PINK - FINANCE G I TY OF SA I NT PAIT L Council CANARV - DEPARTMENT � BLUE - MAVOR File NO• Council Resolution Presented By Referre To Committee: Date Out of Committee By Date WHER , the City of St. Pau1 recognizes the need for residen 'al energy conse vation and establishes conservation as a high prio�ity; and WHEREAS, th Minnesota State Legislature has also r�¢ognized the need for resident 1 energy conservation in this stat��and has mandated the Public Service Commission to initiate ajpilot program for Utility F�nancin of Residential Conservation ,�mprovements by Jan- uary l, 1981; and � WHEREAS, the City of t. Paul has th ility and experience to work effectively with North rn States Pa er Company and the Minnesota Energy Agency to assure maxi succe " of such a pilot program; and, WHEREAS, the attached St. Energy Bank Proposal incorporates to advantage a11 available res r es, yet creates a simple process for the residential owner to, inan energy conservation measures; now, therefore, be it RESOLVED, that t City of St. Pau requests the Public Utilities Commission approve e Energy Bank Propos and order Northern States Power Company to , rk with the City of St. u1 to develop and implement the Energy Bank as a pilot program ror Utilit Investments in Energy Conservation. �, \�, �� . .� COUNCILMEN Request d by Department of: Yeas Nays In Favor -- Against BY �����-- Form Appr City A rne Adopted by Council: Date Certified Passed by Council Secretary BY B� 6lpproved by Mavor: Date _ Approv d y Mayor for bmission to Council BY - – — BY NSP/ST. PAUL ENERGY BANK � � PROPOSAL COfJCEPT: The Energy Bank will be a one-stop financing center providing financing for St. Paul residents to- retrofit their dwellings. Funds will be available for specified cost effective energy improvements ($2,.000/structure average) and necessary structural repairs needed to maintain _ . the integrity of-those en�rgy improvements. . - - Capital wi11 be generated from tax-exempt bond issues, existing city programs, utility contri- bution, and other outside funding sources. ORGANIZATION: NSP and St. Paul will form a non-profit corpora- tion (similar to DHDC). This corporation will be directed by a board with representatives from NSP, City of St. Paul , MEA, and other appropriate parties. The Energy Bank will arrange auditing, installationa�'Financing, and loan servicing for each customer. Energy Bank personnel will consist of current NSP and city employees on loan. FINANCING: NSP will contribute �2 million capital to the _ Energy Bank for energy retrofit loans. This in- vestment will be put in the rate base and a rate of return will be earned. NSP will also guarantee , a $10 r�illion tax-exempt bond issue privately placed by the City on behalf of the Bank. The City of St. Paul will issue a second bond issue of $12 million, secured by CDBG and UDAG funds, for necessary repairs related to energy retrofit. The Energy Bank will secure other func7s as they become available through state or federal govern- ments (Solar and Conservation Bank, DOE grants, etc. ). PROGRAM DESCRIPTION: A St. Paul resident will call the Bank and receive an RCS audit to determine cost-effective measures � ' and necessary structural repairs. Energy bank personnel will assist the customer in arranging the installation, financing, and post-installation in- spection of these improvements with appropriate Bank funds. The customer's energy loan will be _ ser-viced through NSP's billing system and may be . a deferred principal loan due at time of sale. A customer's structural repairs loan wi11 be ser- viced by St. Paul HRA. Each loan wi11 be secured by a security interest in ttie property. . PROGRAP�I��DEVELOPP1ENT: NSP Contri buti on $2 million capital contribution �10 million tax-exempt bond guarantee l .management level staff person to assist in program design . 1 attorney to assist in program design St. Paul Contribution . $10 million tax-exempt bond issue - energy � retrofit $12 million tax-exempt bond issue - necessary repairs 1 HRA project manager 1 Assistant City Attorney 1 Energy Office Staff ,: . i ,