County council adopts CPACE ordinance to let private lenders finance commercial energy and resilience upgrades

Los Alamos County Council on Feb. 25 voted unanimously to adopt Ordinance No. 7-38, establishing a Commercial Property Assessed Clean Energy program, or CPACE, that lets qualifying property owners access long-term, fixed-rate private financing secured by a special improvement assessment on the property.

The ordinance, moved by Councilor Hammaden and seconded by Councilor Neil Clinton, passed 7-0 after a staff presentation and questions from several councilors. “The commercial property assessed clean energy or CPACE program is a financing structure enabled by the state statute and local ordinances that provides eligible property owners with access to long term fixed rate financing for a range of energy efficiency, renewable energy, water efficiency, and resilience improvements,” said Abby Hayward, conservation coordinator with Utilities, in her presentation to council.

Hayward and Eric Christensen of Adelante Consulting described program mechanics and eligibility. Christensen said CPACE financing covers direct and indirect costs related to four categories of improvements — energy efficiency, water conservation, renewable energy and building resiliency — and noted that multifamily properties are eligible if they have five or more dwelling units. He said the program is funded entirely by private capital; the county itself will not subsidize projects.

Why it matters: CPACE can reduce the upfront cost barrier for building improvements that reduce operating costs or increase resilience, while allowing lenders to take a special-assessment lien that runs with the property. Supporters said the program aligns with county sustainability goals and could help local commercial property owners and nonprofits finance larger-scale upgrades.

Key details from the presentation and discussion

- Eligible properties: privately owned commercial, agricultural, industrial and multifamily properties of five or more units; nonprofit-owned properties may be eligible. - Funding: All program funding comes from private capital providers and lenders; there are no county or federal funds required to operate CPACE in New Mexico under the proposed ordinance. Adelante Consulting will serve as the statewide program administrator under contract with the state. - Fees: A program administration fee of 1% of financing (capped at $25,000) is paid at loan closing and rolled into the financing; Hayward said there is “no financial burden to the county.” - Lien priority and consent: The program’s special assessment lien would be senior to all liens except general ad valorem property taxes (and improvement district liens that are coequal with property taxes); lienholder consent is required in many cases and lienholders have the right to approve or reject CPACE financing on their collateral. - Technical review: Applications require a certificate of eligible improvements signed by a qualified professional (engineer or energy auditor) and an energy report that documents eligible costs and projected energy or water savings. - Refinancing window: The program allows a three‑year look‑back that can be used to refinance qualifying improvements made within three years before application. - Administrative role for county: County responsibilities are limited to opting in via ordinance and designating a representative (for example, the county manager or designee) to sign closing documents that place the special assessment on the property; lenders will handle billing and collection.

Council questions focused on measurement of actual savings, variability in case studies, the $25,000 fee cap, lender availability for small projects and whether the state’s emerging New Mexico Climate Investment Center might participate as a local lender. Christensen said the program administrator reviews project documentation but does not perform on‑site audits; lenders and borrowers are responsible for ensuring work is completed as described. He said the state program has closed three transactions so far (Bishop’s Lodge Resort; a Santa Fe County event center; and Hotel Willa in Taos) and that CPACE lenders are actively seeking to onboard local credit unions to fill a financing gap for smaller projects.

Public comment: Phil Gerstke, a developer with a contract for the Entrada property, told council his team expects to use CPACE financing for renewable energy, resiliency measures and water conservation in a proposed approximately 75,000-square-foot lab/office project, estimating CPACE could account for roughly 25% of the project cost. Sandy Jones, representing the Los Alamos Commerce & Development Corporation, urged adoption and said the program would help property owners and small businesses realize energy-efficiency improvements.

Outcome and next steps: Council adopted Ordinance No. 7-38 by a 7-0 roll call. Staff said the county’s utilities and sustainability staff will prepare educational materials for property owners and work with local business groups and lenders to promote the program. The program administrator will process project applications and provide semiannual portfolio reports to participating jurisdictions.

Ending: With the ordinance adopted, county staff will publish required summaries and begin outreach; councilors said they expect to monitor early transactions and lender participation, especially for small and mid‑sized projects.