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City says USDA offered $7.6M conditional RESP loan for homeowner heat-pump program; pilot set for 2027 launch
Summary
Ames staff announced a conditional USDA RESP loan offer of $7.6 million to fund a low-interest, meter-attached energy-upgrade program (initial focus: heat pump replacements), with a 10-project pilot and expected program expansion in subsequent years; obligations attach to the meter and transfers to new account holders.
City staff told the Ames City Council on June 9 that the U.S. Department of Agriculture has given a conditional commitment of $7.6 million under the RESP program to finance an energy-upgrade loan program for Ames electric utility customers.
Layne Fober, Energy Services Coordinator, said the USDA offered $7.6 million at a zero-percent interest rate and staff envisions using the funds initially to replace end-of-life HVAC systems with heat pumps. The city would attach the loan to the property meter and collect repayments on monthly utility bills for up to 15 years. Fober described a conservative first-year pilot of 10 projects and a target of roughly 80 projects per year thereafter if the program scales.
Fober said staff aims to return in the fall with final loan documents and, if approved by Council, would issue an RFP for a third-party program operator and build a contractor network. He projected a realistic launch in 2027.
Council members asked how loan obligations would transfer if a homeowner sells. Fober said the obligation is attached to the meter and would transfer to the new account holder; staff will record liens and make program participation visible in public property records and the city’s Beacon registry.
Council discussed whether to prioritize lower-income households. Fober said prioritizing adds operational complexity and cost; the USDA capital available should be sufficient to serve a range of customers and current program rules do not impose an income cutoff. Staff said they will return with more detail before formal program approval.
