275181 NNFiITE - CITV CLERK �����
PINK - FINANCE GITY OF SAINT PAUL COUIICIl
CANARV - DEPARTMENT
BLUE - MAVOR File NO•
Council Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
WHEREAS, the City of St. Paul recognizes the need for energy conservation
and establishes conservation as a high priority; and
WHEREAS, the Minnesota State Legislature has also recognized the need
for conservation in this state and has mandated the Public Service Corr�nission
to initiate a pilot program for Utility Financing of Residential Conservation
Improvements by January 1, 1981; and
WHEREAS, the City of St. Paul has the ability and experience to work �
effectively with Northern States Power Company and the Minnesota Energy
Agency to assure maximum success of such a pilot program; and,
WHEREAS, utility financed zero interest loan programs, currently in
operation in other states, have achieved significant results in energy
savings; now, therefore, be it -
RESOLVED, that the City of St. Paul requests the Public Service
Commission designate Northern States Power Company and the City of St. -
Paul to work cooperatively in the development and implementation of a
pilot program for Utility Financing of Residential Conservation Improvements;
and, be it
FURTHER RESOLVED, that the City of St. Paul requests the Public Service
Commission to consider the enclosed zero interest loan proposal for conser-
vation improvements as a guide for the pi]ot program.
COUIVCILMEN Requested by Department of:
Yeas Hunt Nays �
levi�e
Maddox [n F avor �
McMahon (� B
Showalter - __ Against Y
7edesco
Wilson .- � � 19�
fUN Form Ap ed y City tor y
Adopted by Coun � . Date •
,
'Certif d �;sed by oun . 1 $ec ta BY
gy �� � .
Appro e Mavor. Da e _ `�U� � O 19�� App by Mayor for S b s�s,ion o Council
BY - — B.
�itlStiE1� J U L 1 � i980
. • 2�5�.��. �
Council File No.
APPENDIX
The Ptablic Service Commission has been mandated by Minnesota
Session Laws, Chapter 579, to initiate a pilot program of utility--
financing of residential conservation improvements. Last Friday,
June 20, the Public Service Commission convened an informational .
hearing to determine what utility and pilot area the commission
should select to begin drafting a pilot program plan. At that
hearing, the City of St. Paul. expressed its interest in being
selected as a pilot area to work with Northern States Power
Company in developing a pilot program plan. It is our hope
that_ this pilot plan will begin the enormous task of using our
limited fuel supplies more efficiently.
� , Conservation is the cornerstone upon which we must build
��- ; .
a- viable energy policy. In the biinnesota Energy Agency Biennial
Report, the Agency projects Minnesota's demand for fossil fuels
will increase 27g by the year 2000 while supplies will increase
5�. We must begin an aggressive campaign to retrofit our city
to slow the rapid depletion of our natural resources.
Conservation must be addressed on a large scale; government�
alone cannot adequately finance and manage the task at hand.
Logically, the utilities, as energy _suppliers, are capable of
the managing part of the conservation task and committing the
capital necessary to finance their part of the plan. This form
of financing is in place in Oregon and Tennessee. The Oregon
experience, after one year, shows 179 households participated
with 6�� interest loans while 9,249 households participated with
zero interest loans. Consequently, we recommend the enclosed
- - plan for your consideration.
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Proposed Zero Interest Loan Program '
i . Narthern States Power and the City of St. Paul will work cooperatively
to develop a plan for widespread retrofit of residential property in
St. Paul . This plan wiil be submitted to both the Public Service
Commission and the St. Paul City Council prior to implementation.
2. Upon approval of plan by both entities, Northern States Power will
obtain sufficient capital from bond sales or other corporate capital
fund sources.
3. The St. Paul Energy Office will then begin an aggresive outreach :
program based upon a prioritized list of neighborhoods most in need of
weatherization. In addition, the City of St. Paul wil� incorporate an
energy efficiency code that will encourage retrofit of buildings.
4. The property owner would request a.. Residential Conservation Service
audit from Northern States Power Company to determine the cost
effectiveness of specific improvements, (based on. a 10 year payback
period). The owner makes the decision on the type of improvements
deemed appropriate. .
5. Northern States Power Company wi11 then provide the owner with a list
of licensed/bonded contractors. Owner will select the contractor with
Northern States Power acting as project manager. The St. Paul Energy
Office will help coordinate neighborhood group purchasing and give technical
assistance to �hose owners who wish to insta�li conservation materials
themselves. �
6. Northern States Power will commit funds for payment of improvements con- :
' ditioned on 1 ) a utility inspection and 2) final approval of completed �
work. The St. Paul Energy Office will provide operator training to
instruct the building owner on proper maintenance and use of their
retrofitted building.
7. Loan will be seeured by a lien against the property until the loan is
. repaid. Repayment may be made in monthly instailments or in a lump
sum at time of sale or refinancing of the structure. In either case, no
interest will be directly charged to the owner who holds the loan.
8. All utility administrative costs and interest expenses will be put �
into the utility Operating Expense Account and distributed through the
utiiity rates. The loan principal will be added to the rate base ,
and Northern States Power Company will earn a rate of return on that
amount for the time the loan remains outstanding.
9. This pilot program will be reviewed every six months and reports provided
to both the Public Service Eomnission and the St. Paul City Council .
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PROPOSED ZERO INTEREST LOAN PROGRAM
GOAL: 1) Widespread energy conservation through weather-
ization of residential property (both owner- and
renter-occupied) .
2) Finance an energy conservation program for the
structure rather than for the occupants.
RESPONSIBILITY OF UTILITY RESPONSIBILITY OF CITY
1. Capitol financing 1.. Outreach - prioritize
2. Residential conservation neighborhoods
service audit 2. Group financing of
3. Project manager insulation
4. List of approved con- 3. Incorporation of energy
tractors codes by City Council
5. Inspection of completed 4. Operator training
work and sign-off for
quality check
JOINT RESPONSIBILITIES
1. Program plan development -
2. Preparation and monitoring
contractor list
3. Program review and evaluation
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