County reviews PACE program to finance energy and water-efficiency upgrades

The Johnson County Commissioners Court heard a detailed presentation March 9 on a possible Property Assessed Clean Energy (PACE) program from Steven Minnick, program director for the Texas PACE Authority. Minnick described PACE as a tool that allows property owners to finance energy- and water-efficiency or on-site generation upgrades with a secured assessment that runs with the property, and said the state statute and program contracts protect local governments.

"No cost, no risk to local governments," Minnick told the court, describing statutory liability protection and conservative underwriting standards. He said projects must demonstrate that utility-cost savings will fully offset the cost of improvements, and that licensed engineers must certify projected savings. "The worst thing that happened is you adopt the PACE program and no one uses it," Minnick said, framing adoption as a low-risk economic-development option.

Commissioners questioned whether PACE might incentivize or affect power use by large users such as data centers and asked about collection and foreclosure risk. Judge Barker and staff emphasized that administration and collections are contracted to third parties and that the program can be restricted by geography or project type. Minnick said the administrator handles applications and documentation and that, to date, PACE loans have been rare to foreclose; "no loan in the PACE program to date has ever gone to foreclosure," he said.

The court did not adopt the program on March 9; instead, commissioners asked staff to circulate material and put the proposal back on a future agenda so members can review contracts and contact jurisdictions already using PACE. The court agreed to revisit the matter in a few weeks to decide whether to begin the formal adoption process.