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State CPACE program presented to commission as optional financing tool for commercial energy upgrades
Summary
Montana Facility Finance Authority staff described the CPACE program—authorized in 2021—as an optional, county‑level opt‑in that ties long-term commercial energy and water improvement financing to property tax assessments; commissioners asked about rates, prepayment and whether to place the issue on a future agenda.
Carolyn Jones of the Montana Facility Finance Authority gave the commission an overview of CPACE (Commercial Property Assessed Capital Enhancements), the statewide program authorized by the 2021 Legislature that local jurisdictions may opt into.
Jones said CPACE is a financing mechanism for commercial property owners to pay for energy efficiency, water conservation and renewable energy improvements through an assessment recorded on property tax records, with financing terms tied to the useful life of the improvements (examples cited up to 25–30 years). She noted the program is administered statewide to avoid patchwork local rules, that projects require energy assessments by qualified contractors, and that participation is limited to private property owners and private lenders (government‑owned buildings are not eligible).
Jones described recent closed projects in Montana as examples: a downtown commercial retrofit financed at about $1.6 million that is expected to yield multi‑million dollars in lifetime savings, and hotel projects of roughly $250,000 per property. She said project rates in the current environment were "anywhere from 6 and a half to about 8 and a half percent" (about 200 basis points above Treasury, according to the presentation), and that prepayment is allowed but typically subject to negotiated penalties in financing agreements. Jones also explained the local procedural steps for opt‑in: a resolution of intent, a public hearing, and a final adopting resolution.
Commissioners asked whether CPACE serves borrowers who cannot otherwise secure financing; Jones said the program is not necessarily a lender of last resort, noting private lenders underwrite projects and must typically consent when a property has senior mortgage positions. One commissioner asked if the county needed to place CPACE on an agenda for formal consideration; staff said it is an optional tool and the adoption process would be a separate, future agenda item.
Why it matters: Opting into CPACE would create a local financing option that could make large‑scale energy and water upgrades financially feasible for commercial property owners and could leverage private financing to achieve energy‑efficiency goals.
The transcript records the presentation and dialogue but not a formal motion to adopt CPACE; commissioners discussed placing the item on a future agenda for consideration.
