Bill Text: OR HB3675 | 2010 | 1st Special Session | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to financing energy efficiency; and declaring an emergency.

Spectrum: Unknown

Status: (Passed) 2010-03-23 - Chapter 92, (2010 Laws): Effective date March 23, 2010. [HB3675 Detail]

Download: Oregon-2010-HB3675-Engrossed.html

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     75th OREGON LEGISLATIVE ASSEMBLY--2010 Special Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 125

                           A-Engrossed

                         House Bill 3675
                 Ordered by the House February 8
           Including House Amendments dated February 8

Sponsored by COMMITTEE ON SUSTAINABILITY AND ECONOMIC DEVELOPMENT

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.

  Clarifies provisions related to energy efficiency and
sustainable technology loan program. Allows Director of State
Department of Energy by rule to establish base efficiency package
fee. { +  Limits fee. + }
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to financing energy efficiency; creating new provisions;
  amending ORS 470.530, 470.575, 470.610, 470.635, 470.640,
  470.655 and 470.660 and sections 42 and 49, chapter 753, Oregon
  Laws 2009; repealing section 46a, chapter 753, Oregon Laws
  2009; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + ORS 470.505 does not apply to the pilot
programs described in sections 42 to 45, chapter 753, Oregon Laws
2009. + }
  SECTION 2. ORS 470.575 is amended to read:
  470.575. (1) The Loan Offset Grant Fund is established in the
State Treasury, separate and distinct from the General Fund.
Interest earned by the Loan Offset Grant Fund shall be credited
to the Loan Offset Grant Fund. Moneys in the fund are
continuously appropriated to the State Department of Energy for
use as provided in this section.
  (2) The fund shall consist of any moneys directed by law, gift,
grant or donation to the fund  { + and moneys from base
efficiency package fees collected pursuant to ORS 470.655 + }.
  (3) The department shall use fund moneys:
  (a) To promote energy efficiency, renewable energy and energy
conservation projects that would otherwise result in a marginally
higher overall cost to the applicant when energy costs and the
financing and repayment costs for the project are considered, by
using the fund moneys to help produce a monthly cost savings for
the applicant; or
  (b) To transfer to an appropriate fund for carrying out any
purpose under this chapter specified as a condition of a gift,
grant or donation.
  SECTION 3. ORS 470.635 is amended to read:

  470.635. (1) The State Department of Energy may not complete an
agreement for the issuance of an energy efficiency and
sustainable technology loan unless the sustainable energy project
manager, a contractor designated by the project manager or a
person approved by the department completes an energy savings
projection or similar evaluation for the property that will
benefit from the small scale local energy project. The projection
or other evaluation shall be in writing and shall, at a minimum,
identify the following:
  (a) The recommended base efficiency package for the structure.
A base energy package may include improvements to existing supply
lines and equipment.
  (b) Any optional package recommended for the structure.
  (c) The estimated net monthly cost to the applicant when energy
savings, project repayment costs, tax or other incentives, loan
offset grants { + , base efficiency package fees + } and other
relevant economic factors are considered.
  (d) The monthly cost to the applicant to repay the loan
principal and finance charges.
  (e) If the base efficiency package or recommended optional
package includes the use of nontraditional technology, a
description of the nontraditional technology.
  (2) A base efficiency package or optional package may not
provide for achieving energy efficiency upgrades through the use
of appliances or other equipment that lack sufficient
relationship to the structure to be subject to a fixture filing
or real property lien.
  (3) The projection or other evaluation shall state in a clear
and conspicuous manner:
  (a) That the estimated net monthly cost to the applicant
contained in the projection or other evaluation does not
represent a guarantee of project performance or results; and
  (b) That no liability attaches to the department, any state
agency or officer, the project managers or any utility if actual
energy savings are less than the estimated savings or if the
construction process or constructed project is unsatisfactory in
any way.
  (4) If the base efficiency package or recommended optional
package includes the use of nontraditional technology, the
projection or other evaluation shall include a statement that the
technology is nontraditional, initialed by the prospective loan
applicant.
  (5) An energy efficiency and sustainable technology loan may be
used only for a project constructed by a contractor certified
under ORS 701.119.
  (6) Prior to the disbursement of the loan moneys to the
contractor, a project manager or other person approved by the
department shall verify that the small scale local energy project
has been completed in a manner consistent with energy efficiency
and sustainable technology loan program requirements. If this
state or any agency of this state adopts or recognizes an energy
efficiency scoring system for buildings, the department may
require that the verification described in this subsection
include the determination of an energy efficiency score for the
property benefited by the project.
  (7) The department shall periodically consult with contractors
certified under ORS 701.119 for the purpose of updating average
cost and projected savings figures used for energy savings
projections or other evaluations under this section. The
department shall encourage the use of methods for conducting
energy savings projections or other evaluations under this
section that are cost-effective and time-effective, take
advantage of economies of scale and produce results that are
accurate and are replicable for equivalent base energy packages.
  SECTION 4. ORS 470.655 is amended to read:

  470.655.  { + (1) + } Except as provided in ORS 470.650, an
applicant for an energy efficiency and sustainable technology
loan approved by the State Department of Energy shall pay the
department a project initiation fee. Upon request of the loan
applicant, the department may add all or part of a project
initiation fee to the principal of an issued loan. The department
may establish the fee amount by rule, not to exceed four percent
of the approved loan amount. If the department does not establish
the fee amount, the fee shall be two percent of the approved loan
amount.
   { +  (2) The Director of the State Department of Energy may by
rule establish a base efficiency package fee for energy
efficiency and sustainable technology loans if the loans are not
financed by moneys from the Loan Offset Grant Fund. The fee may
not exceed 10 percent of the estimated economic benefit for the
base efficiency package. Any fees collected by the department
under this subsection shall be deposited in the fund. + }
  SECTION 5. ORS 470.610 is amended to read:
  470.610. (1) The State Treasurer, at the request of the
Director of the State Department of Energy, from time to time may
issue and sell revenue bonds in the name of and on behalf of the
State of Oregon in compliance with the applicable provisions of
ORS chapter 286A in the principal amount   { - the director
considers - } necessary to carry out the purposes of ORS 470.500
to 470.710, or for paying or refunding any revenue bonds
previously issued on behalf of the State Department of Energy for
those purposes.  { + At least once every six months, the director
shall estimate the anticipated demand for loans under the energy
efficiency and sustainable technology loan program, and shall
make a written declaration of this amount to the State
Treasurer. + }
  (2) All bonds shall be special revenue obligations of the State
of Oregon, and, unless paid from the proceeds of other bonds,
shall be payable as to principal, redemption premium, if any, and
interest, through the Energy Revenue Bond Repayment Fund solely
from the revenues, moneys and other assets of the Energy Project
Bond Loan Fund and the Energy Project Supplemental Fund that may
be pledged for that payment. The Director of the State Department
of Energy shall determine for each fiscal quarter the amount that
will fall due during that fiscal quarter for bonds issued under
this section, other amounts described in ORS 470.585 and any
expected significant changes in bond obligations for upcoming
fiscal quarters and the amount necessary to adequately fund
reserves. The director shall request that the State Treasurer
make transfers from the Energy Project Bond Loan Fund and Energy
Project Supplemental Fund to the Energy Revenue Bond Repayment
Fund as the director believes prudent to ensure the continuing
payment of maturing obligations and the funding of reserves.
  (3) Prior to an issuance of revenue bonds under this section,
the director shall prepare and sign a written declaration setting
forth the amount of the bonds to be issued and the terms and
conditions for issuance. If the State Treasurer approves the
declaration, the State Treasurer shall certify the approval on
the declaration. The approved declaration shall be known as an '
energy revenue bond declaration.' Each bond declaration shall be
deemed to be and shall constitute conclusive proof of the
authorization to issue the bonds described in the bond
declaration and may contain further pledges and covenants as
determined by the director or the State Treasurer.
  SECTION 6. ORS 470.640 is amended to read:
  470.640. (1) Except as provide in subsection (2) of this
section, the amount of an energy efficiency and sustainable
technology loan may not exceed $40,000  { - . - }   { + for
residential dwellings served by a single meter of the utility
that is to provide on-bill financing. The loan limit described in

this subsection does not apply to other buildings such as
multifamily housing and mixed-use structures. + }
  (2) The loan amount limit described in subsection (1) of this
section shall increase annually on January 1 of each year,
beginning January 1, 2011. The loan amount limit shall increase
from the most recently established loan amount limit by a
percentage equal to the percentage increase in the Portland-Salem
Consumer Price Index for All Urban Consumers for All Items as
reported by the Bureau of Labor Statistics of the United States
Department of Labor.
  SECTION 7. ORS 470.660 is amended to read:
  470.660. (1)   { - If - }   { + All investor-owned utilities,
except those that have withheld consent under ORS 470.510 (3),
shall establish on-bill financing systems. After + } an
investor-owned utility serving a sustainable energy territory has
established an on-bill financing system, an energy efficiency and
sustainable technology loan shall be repaid by on-bill financing
unless the loan agreement specifies that the State Department of
Energy and the borrower have agreed to an alternative method for
ensuring repayment of the loan.
  (2) Unless the Public Utility Commission grants an
investor-owned utility a waiver under subsection (4) of this
section, the on-bill financing system of the utility must:
  (a) Enable a customer to make a single payment to satisfy the
periodic utility charges and repayment on an energy efficiency
and sustainable technology loan;
  (b) Provide a clearly identifiable line item or separate
statement in the utility bill that shows the energy efficiency
and sustainable technology loan repayment amount; and
  (c) Direct energy efficiency and sustainable technology loan
repayment amounts collected by the utility to the appropriate
sustainable energy project manager or to the department for
deposit to the credit of the Small Scale Local Energy Project
Administration and Bond Sinking Fund, Energy Project Bond Loan
Fund or Energy Project Supplemental Fund.
  (3) The Public Utility Commission shall adopt rules for the use
of on-bill financing by investor-owned utilities. The rules may
include, but need not be limited to, rules regarding nonpayment,
insufficient payment, delinquency notices, repayment charge
transfers, processing fees, late fees and refunds. The commission
may not adopt any rule that imposes responsibility for the
repayment of an energy efficiency and sustainable technology loan
on the utility.
  (4) The commission may waive the requirement that an
investor-owned utility provide on-bill financing for one or more
loans if the commission determines that providing the on-bill
financing is not practicable. If the commission grants a utility
a waiver under this subsection, the utility shall bill the
affected customers for loan repayment separately from any utility
customer meter billings.
  SECTION 8. ORS 470.530 is amended to read:
  470.530. (1) Except as provided in subsection (5) of this
section, the Director of the State Department of Energy may
establish qualifications for sustainable energy project managers
and may exercise oversight to ensure project manager compliance
with those qualifications. A project manager shall provide the
promotion, technical and financial support and verifications
necessary to administer the energy efficiency and sustainable
technology loan program in the territory served by the project
manager.
  (2) The project manager shall serve a sustainable energy
territory established by the director. The project manager shall
provide loan program information and technical and financial
information to promote energy efficiency and use of renewable
energy at the neighborhood and community levels. The project
manager shall be responsible for small scale local energy project
verification and for monitoring program effectiveness for energy
efficiency and sustainable technology loans and small scale local
energy program loans. The project manager may administer the
energy efficiency and sustainable technology loan program within
the territory.
  (3)(a) Except as provided in this subsection, the boundaries of
a sustainable energy territory must be consistent with the
service territory of a local electric utility.
  (b) The boundaries of a sustainable energy territory may be
consistent with the service territory of a local gas utility if:
  (A) The local electric utility is a consumer-owned electric
utility that elects not to be the project manager for the
sustainable energy territory; and
  (B) The service territory of the local electric utility and the
service territory of the local gas utility overlap.
  (c) Notwithstanding paragraphs (a) and (b) of this subsection,
if the project manager for the sustainable energy territory is
other than the Public Purpose Fund Administrator or a
consumer-owned utility, the director may adjust the boundaries of
the territory or create a larger or smaller territory if the
director believes that the territory boundaries as adjusted or
created by the director would better accomplish the goals of the
energy efficiency and sustainable technology loan program.
  (4) A  { + city, county, metropolitan service district or
other + } local government  { + entity + },  { + or a + }
nonprofit, for-profit, tribal or state entity { + , + } may be a
project manager if the entity meets the qualifications
established by the director under this section and is approved by
the director to provide promotion, outreach and customer support
related to the energy efficiency and sustainable technology loan
program within a sustainable energy territory. The Public Purpose
Fund Administrator is an ex officio sustainable energy project
manager. The Public Purpose Fund Administrator shall act as the
project manager in any sustainable energy territory that is not
served by another project manager.
  (5) The director shall establish a sustainable energy project
manager certification program. However, the Public Purpose Fund
Administrator or a consumer-owned utility is not required to
obtain a sustainable energy project manager certificate and the
Public Purpose Fund Administrator is not subject to any
qualifications established by the director for a project manager.
  SECTION 9. { +  Section 10 of this 2010 Act is added to and
made a part of ORS chapter 470. + }
  SECTION 10.  { + All investor-owned utilities and
consumer-owned utilities that have energy efficiency and
sustainable technology loan programs shall, at the request of the
Director of the State Department of Energy, provide the director
with the following information regarding the loans:
  (1) Repayment performance;
  (2) Default rates;
  (3) Energy savings data; and
  (4) Any other information specified by rule adopted by the
director pursuant to ORS 470.140. + }
  SECTION 11. Section 42, chapter 753, Oregon Laws 2009, is
amended to read:
   { +  Sec. 42. + } (1) The Director of the State Department of
Energy shall initiate the energy efficiency and sustainable
technology loan program described in   { - sections 2 to 41 of
this 2009 Act - }   { + ORS 470.500 to 470.710 + } in phases
through a series of pilot programs, limiting the geographic
availability and other features of the program as the director
considers necessary to facilitate an orderly and successful
implementation of the program. The director shall initiate the
program  { + on a statewide basis  + }as quickly as the director
considers practicable { + , but in no event later than June 30,

2011, + } to achieve the benefits of the program while ensuring
high participant satisfaction and program integrity.
  (2) The director shall endeavor to establish pilot programs
initially in sustainable energy territories that reflect a
variety of population densities. The director may give preference
to territories that request to participate in the pilot program.
  SECTION 12.  { + (1) The amendments to ORS 470.635 by section 3
of this 2010 Act apply to energy savings projections or similar
evaluations completed on or after the effective date of this 2010
Act.
  (2) The amendments to ORS 470.655 by section 4 of this 2010 Act
apply to energy efficiency and sustainable technology loans
approved on or after the effective date of this 2010 Act.
  (3) The amendments to ORS 470.610 by section 5 of this 2010 Act
apply to revenue bonds for which the Director of the State
Department of Energy submits a written declaration pursuant to
ORS 470.610 (3) to the State Treasurer on or after the effective
date of this 2010 Act.
  (4) The amendments to ORS 470.640 by section 6 of this 2010 Act
apply to energy efficiency and sustainable technology loans
approved on or after the effective date of this 2010 Act. + }
  SECTION 13.  { + The amendments to ORS 470.660 by section 7 of
this 2010 Act become operative June 30, 2011. + }
  SECTION 14.  { + (1) Section 1 of this 2010 Act is repealed
January 2, 2016.
  (2) Section 46a, chapter 753, Oregon Laws 2009, is
repealed. + }
  SECTION 15. Section 49, chapter 753, Oregon Laws 2009, is
amended to read:
   { +  Sec. 49. + } Sections 42, 43, 44, 45, 46  { - , 46a - }
and 47a { + , chapter 753, Oregon Laws 2009, + }   { - of this
2009 Act - }  are repealed January 2, 2016.
  SECTION 16.  { + This 2010 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2010 Act takes effect on
its passage. + }
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