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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. � � ' ����� 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 . � _ * ����� 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 �