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Efficiency Vermont says it won’t serve as C‑PACE administrator; lawmakers discuss lenders and third‑party options
Summary
At a committee hearing on S.138, Efficiency Vermont’s Peter Walk said the agency would not be the program administrator for a proposed commercial Property Assessed Clean Energy (C‑PACE) program, and lawmakers discussed alternatives including VEDA, third‑party administrators and a DFR‑convened stakeholder group.
At the same April 1 meeting, the committee heard testimony and discussion about commercial Property Assessed Clean Energy (C‑PACE) financing under S.138 and related proposals. Peter Walk, managing director of Efficiency Vermont, told the committee Efficiency Vermont does not want to serve as the C‑PACE program administrator and outlined alternatives and past experience.
"We have a residential PACE program that died on the vine 10 plus years ago," Walk said, summarizing prior low demand for residential PACE. He described Vermont’s Home Energy Loan (HeatSaver) program, which the Public Service Department launched and later conveyed to Efficiency Vermont, and said the agency is comfortable contributing incentives and engineering analysis but not vetting and underwriting lenders as a program administrator.
Walk and committee members discussed how C‑PACE in other states typically operates: municipal authorization at the request of a commercial property owner, lender-led underwriting and third‑party administrators that maintain lists of approved lenders and coordinate assessments. The transcript records that DFR (Department of Financial Regulation) is directed in current draft language to convene stakeholders — including the League of Cities and Towns, VEDA and Efficiency Vermont — to identify appropriate program administrators and return recommendations.
Committee members and witnesses agreed several models are possible: a state green bank model, VEDA participation, private third‑party administrators that specialize in C‑PACE, or a hybrid in which a contracted administrator provides a short list of vetted lenders while lenders originate and service loans. Walk emphasized that Efficiency Vermont’s strengths are incentives and engineering support, not lender vetting or loan origination.
On program risk, witnesses cited data from established markets indicating low default rates: committee discussion referenced default rates under 1% in long‑running programs and noted the C‑PACE market has attracted significant private capital in larger states. Members asked for written materials, including current business energy loan rates; Walk agreed to provide rate information later in the week.
Next steps: the committee asked DFR to proceed with the stakeholder convening in the bill language, invited written testimony and data on loan rates and underwriting, and will continue deliberations after receiving those materials. No formal votes were recorded on the C‑PACE provisions at the April 1 meeting.
