Healthy & Resilient Homes and Buildings Goal 3: Develop and implement state and local policies to facilitate energy conservation
BE 3.1: Pay-As-You-Save (PAYS)
Utility Pay-As-You-Save (PAYS) financing options eliminate the barrier of upfront costs for energy efficiency upgrades, especially for tenants in multifamily residential units.
Customers pay nothing upfront for their energy efficiency updates, and instead the utility adds a fixed charge to the customer’s monthly bill to cover the cost. The added on-bill cost is still less than the estimated savings incurred by the update, so ratepayers can immediately enjoy the benefit of cost-savings. PAYS allows low-income families to add energy efficiency upgrades that might otherwise be unaffordable, offering an accessible and equitable financing option. The program would be particularly impactful because it opens the energy efficiency market up to all consumers, and the immediate savings is a key incentive that would increase demand for both commercial and residential energy efficiency projects. State and local regulators should encourage PAYS adoption across all area utilities.
Providing affordable financing options for efficiency upgrades is a critical way to establish fundamentally safer, healthier and more resilient communities while enabling residents to reduce their energy burden.
BE 3.2: Implement MEEIA and KEEIA
Enacted in 2009, the Missouri Energy Efficiency Investment Act paved the way for significant growth in utility energy efficiency programs. The legislation enables utilities to recoup the cost of energy efficiency programs and losses in profits from consumer energy conservation.
MEEIA has been a win-win for utilities consumers, who see substantial benefits. Transparent utility data sharing may encourage improvements to MEEIA, including ongoing assessments regarding the equitable distribution of program costs and benefits across all residential and commercial customers.
Implementation of a companion bill in Kansas, KEEIA, would enable the successes and lessons learned from MEEIA to accelerate energy efficiency investments on the Kansas side of the region.
Residential consumers, and especially low-income consumers, should not bear disproportionate cost burden for programs, and should have equitable access to energy-saving benefits. Data sharing is essential to monitor the equity of existing programs and policies.
BE 3.3: Adopt an Energy Efficiency Resource Standard (EERS)
State-level programs are critical to fund services, provide affordable financing options, and establish regulations and energy conservation goals. More than half of U.S. states have adopted an Energy Efficiency Resource Standard, but Kansas and Missouri currently lack these policies.
Energy Efficiency Resource Standards serve as long-term, quantitative and mandatory energy savings targets for utilities in the state, and have led to substantial contributions to nationwide energy savings.
States that have adopted an EERS see the steepest reductions in energy use, and the policies have spurred complimentary programs to help consumers and utilities pursue further savings.
EERS programs typically contain multiple challenging but manageable mandatory targets along the way to an aggressive new energy conservation standard, giving utilities and local governments the ability to implement innovative new programs. Sufficient funding should be included in the passage of the standard to aid in program development.
An EERS would incentivize more widespread energy efficiency and retrofit programming, benefiting energy-burdened lower income households and renters.
BE 3.4: Expand implementation of PACE projects
Property-Assessed Clean Energy (PACE) Programs enable local governments to raise money to fund energy efficiency and clean energy projects for property owners. Property owners can finance energy efficiency updates or renewable energy installations via financing districts that add a special property tax assessment to their property tax bills.
Missouri’s PACE program was enacted in 2010, providing affordable financing options that can eliminate upfront out-of-pocket costs and lower rates. Adoption of PACE legislation in Kansas will provide another way to reduce the cost burden of energy efficiency upgrades on consumers.
PACE programs should be evaluated for accessibility and equity. The programs should be well regulated to establish safe lending and consumer protection standards.