VEDA tells House committee it can lend for C-PACE, urges explicit resiliency coverage in S.138

The Vermont Economic Development Authority told the House Energy and Digital Infrastructure Committee on April 1 that it could serve as a lender under S.138’s proposed commercial property‑assessed clean energy (C-PACE) program and urged the bill to explicitly include resiliency and flood‑mitigation projects.

Joan Goldstein, CEO of VEDA, said the authority has been "an instrumentality of the state" since the 1970s and that its energy portfolio represents "a little bit more than 10%" of its business. "We are very intrigued by the C‑PACE legislation," she told the committee, arguing Vermont should not be "the laggard" on a policy already enacted in 38 states.

Why it matters: Goldstein framed C‑PACE as an economic development tool that could finance renewable energy, energy efficiency and, she emphasized, resiliency measures tied to recent flood damage. Committee members and VEDA staff warned that because the bill does not define "resiliency," the legislature should clarify whether items such as storm‑water retrofits or other mitigation measures are eligible.

VEDA said it has access to federal capital that could lower borrower costs. Sam Buckley, VEDA’s energy lender, described an awarded USDA Rural Energy Savings Program (RESP) loan that the authority expects to use. Buckley said RESP money "costs us about 1%" to access and that VEDA "would anticipate being able to lend that at 4% fixed," but noted a program constraint: RESP currently limits projects to 10‑year terms. "At some point earlier there was a question of like what would the terms be and terms of C‑PACE loans typically match the life of the asset," Buckley said, and VEDA is considering blending capital to extend amortizations where appropriate.

Goldstein and Buckley also told members VEDA can make energy loans up to $6 million and would likely play a substantial role either on smaller deals national C‑PACE lenders bypass or as a local partner on larger projects.

Committee members pressed VEDA on several technical points in S.138. Members raised concerns about a proposed cap tied to 90% of assessed value and asked whether the statute should instead reference appraised or stabilized value; they also questioned language that requires new‑construction improvements to "exceed" standards and suggested changing it to "meet or exceed" and clarifying which building code—particularly the commercial building energy standards—applies.

A recurring issue in the hearing was program administration. The draft of S.138 includes a prohibition on a lender also serving as a program administrator. Goldstein said VEDA prefers to "stick to our knitting" as a lender and not serve as administrator, but cautioned it would feel odd for VEDA to help identify administrators if the authority also stands to be a lender and the bill then bars lenders from administering the program.

The Department of Financial Regulation (DFR) told the committee it is willing to convene stakeholders to identify appropriate program administrators. "There's a provision in there where we'll work with other stakeholders about identifying, you know, the best administrator for the program," said Joe Valenti, director of policy at DFR. Committee members said the administration requirement risks imposing unfunded work on small towns that may lack staff to process applications, while others said a scalable third‑party administrator could reduce municipal burdens.

DFR staff also explained Vermont licensing rules for lenders and noted exemptions (for example, certain banks and credit unions) and thresholds for oversight; the agency emphasized the committee could keep the consultation language to identify administrators but should be clear about whether the committee wants a statewide administrator or to let municipalities decide.

Committee members and VEDA discussed the practical mechanics of C‑PACE assessments: if assessments flow through property tax bills, a town or an administrator would receive payments and remit amounts to lenders; the group discussed separating origination tasks (application review and underwriting) from the long‑term payment collection function to reduce municipal workload.

On national context, Buckley explained why residential PACE (R‑PACE) has had limited uptake: it often conflicts with the securitization and sale of conforming residential mortgages, which prevents broad secondary‑market acceptance of the product. "It doesn't work with conforming mortgages that are going to be sold because at the end of the day ... it can only work for mortgages that banks maybe hold themselves," Buckley said.

The committee asked for written testimony and technical clarifications. DFR said it will consult with stakeholders (VLCT, Efficiency Vermont and others) if the committee keeps that consultation language in S.138. The committee recessed to take a short break and planned to reconvene at 10:00 a.m.

Next steps: VEDA agreed to provide written suggestions for markup; DFR will continue to advise on licensing and administrator identification; the committee will consider clarifying eligibility language for resiliency, the assessed‑value cap, and the administrator role before finalizing statutory language.