NOT UNDERSTANDING THE REASONING
As I got older I assumed I would also get wiser. I think there is some corny saying about wisdom coming with age or some such thing but I’ve run into something I just don’t understand. I am referring to the California Energy Commission’s (CEC) refusal to provide even moderate continuing funding for the MIST/CHF loan program.
There are a lot of acronyms thrown around: MIST means Moderate Income Sustainable Technology program, CHF is California Homebuyers Fund. I’ve talked about the CHF loan program in this space before. It was a one year program and was started with a grant of almost $20mil in March of 2011, but didn’t really get rolling until May of last year.
It’s a very simple program in design and operation. CHF is the administrator of the program and is a joint powers group of involving 50 Counties in California.
The program consists of a long term low (or in some Counties no) interest loan to install anything at your home that proves to be cost effective in saving energy, and to help create jobs. The interest rate for the areas that have interest is 3% and the loan term is 15 years. Qualifying is simple; the liberal upper end income guideline for Mendocino County is $87,400 or less for a household. There are no appraisals no credits checks, no loan to value, you don’t even need a wet ink signature on anything. You must have a source of income (other than unemployment), be current on your mortgage and property taxes, and meet the income guidelines, and the project must prove cost effective on “Energy Pro”, the computer software used for new home construction Title24 calculations. That’s it.
FULL SPEED AHEAD
Our company got a late start and really only had 4 months to work with this program before the $20mil in funding was depleted. All during this time we questioned why we were told to keep pushing full speed ahead with applications, and we questioned the rational of continuing to add additional Counties to the list of participants when it was obvious the money would be gone soon. The answer was that there was “nothing official, of course” but that there was going to be an infusion of capital to keep the program going.
During the 4 months we had to work with this fantastic program (if we count the project still waiting to be finished) we will had 14 projects completed. All had insulation upgrades, almost every single one had a high efficiency furnace installed, more than half had new dual pane windows put in, 5 had solar P.V. systems, 4 had new “cool roofs”. We had several generated utility savings of over 70%, with one at 82%. That would mean someone with a $450 mo. heating cost would drop that to $81. The average savings was in the 35-40% range. The average project resulted in a potential of over 6 TONS of CO2 removed from the air.
We had clients who said they could no longer afford to live normally in their homes because of the cost of heating and cooling them. 14 very wasteful, inefficient, costly homes were turned into extremely efficient ones.
I can say that without the CHF loan program that I don’t think even one of these projects would have happened. Why? Because these are “Whole House Retrofits” If you are going to cut a buildings heating costs by 82% you have to change out a lot of inefficient old equipment and upgrade a lot non-existent insulation and infiltration items, you must address the whole house. And that costs money. These jobs ranged from $22,000 to $81,000. But in every case the amount saved more than made the loan payment. At 3% $10k costs only $69.05 mo. And we have a number of rebate program out there so a person could get the loan and do the work and then get up to $6000 in rebates and another $9,000 in tax credits (for solar).
There would simply be no other way for these folks to have this kind of upgrade done without the CHF loan program.
THE QUESTION
So, this is the thing I simply do no understand. I do just not understand why the CEC is choosing not to fund this program any longer. After less than one year of being highly successful. We just had an expose a few weeks ago that said millions of dollars of unspent stimulus money would have to go back to the general fund because it was not going to fund energy conservation, it’s stated target. We also hear regular discussions of large amounts of money earmarked for energy conservation sitting unspent in programs that can not spend the money before they will loose it, and the CEC is the body with the power to move that money to where it will be the most useful. Why do they not consider adding additional funding to a program with a staff in place, trained contractors signing clients up for work, a backlog of work of several million dollars, an inspection process that involves an independent third party inspection of each job to deter fraud, verifiable results, low administration costs, and word of mouth advertising that will carry it into 2013?
Their one comment was that they had this new program they were going to fund with $25mil that was going to be “just like the CHF MIST” program except that instead of giving the administration to the same joint powers group, they would give it to a group of bankers to distribute. Now I don’t know if any of you has been to a bank recently but I don’t think you’ll find a group of people on this earth less willing to loan money out right now as a group of bankers, especially for 15 years at 3%, with no collateral or appraisal, or loan to value.
So, I’d like to know from anyone out there, or from anyone connected to the CEC especially. If anyone has any idea why the people who we put in the position of trust, who we trust to do the right things with our tax payer and rate payer money, why they would act in a way that seems so counter productive to the best interests of the general public. Somewhere, someone made decisions that to me just do not make sense. Was it just a matter of money?
As I got older I assumed I would also get wiser. I think there is some corny saying about wisdom coming with age or some such thing but I’ve run into something I just don’t understand. I am referring to the California Energy Commission’s (CEC) refusal to provide even moderate continuing funding for the MIST/CHF loan program.
There are a lot of acronyms thrown around: MIST means Moderate Income Sustainable Technology program, CHF is California Homebuyers Fund. I’ve talked about the CHF loan program in this space before. It was a one year program and was started with a grant of almost $20mil in March of 2011, but didn’t really get rolling until May of last year.
It’s a very simple program in design and operation. CHF is the administrator of the program and is a joint powers group of involving 50 Counties in California.
The program consists of a long term low (or in some Counties no) interest loan to install anything at your home that proves to be cost effective in saving energy, and to help create jobs. The interest rate for the areas that have interest is 3% and the loan term is 15 years. Qualifying is simple; the liberal upper end income guideline for Mendocino County is $87,400 or less for a household. There are no appraisals no credits checks, no loan to value, you don’t even need a wet ink signature on anything. You must have a source of income (other than unemployment), be current on your mortgage and property taxes, and meet the income guidelines, and the project must prove cost effective on “Energy Pro”, the computer software used for new home construction Title24 calculations. That’s it.
FULL SPEED AHEAD
Our company got a late start and really only had 4 months to work with this program before the $20mil in funding was depleted. All during this time we questioned why we were told to keep pushing full speed ahead with applications, and we questioned the rational of continuing to add additional Counties to the list of participants when it was obvious the money would be gone soon. The answer was that there was “nothing official, of course” but that there was going to be an infusion of capital to keep the program going.
During the 4 months we had to work with this fantastic program (if we count the project still waiting to be finished) we will had 14 projects completed. All had insulation upgrades, almost every single one had a high efficiency furnace installed, more than half had new dual pane windows put in, 5 had solar P.V. systems, 4 had new “cool roofs”. We had several generated utility savings of over 70%, with one at 82%. That would mean someone with a $450 mo. heating cost would drop that to $81. The average savings was in the 35-40% range. The average project resulted in a potential of over 6 TONS of CO2 removed from the air.
We had clients who said they could no longer afford to live normally in their homes because of the cost of heating and cooling them. 14 very wasteful, inefficient, costly homes were turned into extremely efficient ones.
I can say that without the CHF loan program that I don’t think even one of these projects would have happened. Why? Because these are “Whole House Retrofits” If you are going to cut a buildings heating costs by 82% you have to change out a lot of inefficient old equipment and upgrade a lot non-existent insulation and infiltration items, you must address the whole house. And that costs money. These jobs ranged from $22,000 to $81,000. But in every case the amount saved more than made the loan payment. At 3% $10k costs only $69.05 mo. And we have a number of rebate program out there so a person could get the loan and do the work and then get up to $6000 in rebates and another $9,000 in tax credits (for solar).
There would simply be no other way for these folks to have this kind of upgrade done without the CHF loan program.
THE QUESTION
So, this is the thing I simply do no understand. I do just not understand why the CEC is choosing not to fund this program any longer. After less than one year of being highly successful. We just had an expose a few weeks ago that said millions of dollars of unspent stimulus money would have to go back to the general fund because it was not going to fund energy conservation, it’s stated target. We also hear regular discussions of large amounts of money earmarked for energy conservation sitting unspent in programs that can not spend the money before they will loose it, and the CEC is the body with the power to move that money to where it will be the most useful. Why do they not consider adding additional funding to a program with a staff in place, trained contractors signing clients up for work, a backlog of work of several million dollars, an inspection process that involves an independent third party inspection of each job to deter fraud, verifiable results, low administration costs, and word of mouth advertising that will carry it into 2013?
Their one comment was that they had this new program they were going to fund with $25mil that was going to be “just like the CHF MIST” program except that instead of giving the administration to the same joint powers group, they would give it to a group of bankers to distribute. Now I don’t know if any of you has been to a bank recently but I don’t think you’ll find a group of people on this earth less willing to loan money out right now as a group of bankers, especially for 15 years at 3%, with no collateral or appraisal, or loan to value.
So, I’d like to know from anyone out there, or from anyone connected to the CEC especially. If anyone has any idea why the people who we put in the position of trust, who we trust to do the right things with our tax payer and rate payer money, why they would act in a way that seems so counter productive to the best interests of the general public. Somewhere, someone made decisions that to me just do not make sense. Was it just a matter of money?
RSS Feed