Rulemaking for PACE: Comment Period Open for Residential Efficiency Financing Model
A court-ordered rulemaking process for residential, property assessed clean energy (PACE) financing began in late January 2012 in response to a lawsuit challenging the Federal Housing Finance Administration (FHFA)’s decision to effectively block residential PACE. The process begins with a 60-day comment period.
Court Says FHFA Must Conduct Formal Rulemaking
In July 2010, the FHFA effectively froze residential PACE financing programs nationwide when it issued a “lenders letter” [pdf] saying that the PACE model was contrary to its mortgage standards. Soon after, several lawsuits were brought against the FHFA seeking a court order to block its opposition, and allow PACE to once again provide homeowners with financing to help reduce utility bills and energy use.
In August 2011, the United States District Court for the Northern District of California ruled that the FHFA must undertake an official rulemaking, which includes the consideration of public comments. This process has the potential to supplant FHFA’s 2010 lenders letter and save the program.
Proposed Rulemaking Seeks Information on PACE Risk and Rewards
The ANPR seeks comment on several areas regarding PACE financing programs, mainly related to the risk that PACE assessments could create for both mortgage lenders and borrowers.
The ANPR also initiates a formal process to prepare an environmental impact statement (EIS), which the court determined to be required under the National Environmental Policy Act. In turn, this EIS would consider the environmental impact caused by blocking PACE financing.
PACE Rulemaking Timeline
The ANPR public comment period runs through March 26, 2012. Subsequently, FHFA will issue a proposed rule, which will be followed by a 30-day comment period and then a final rule.
However, the final rule will not go into effect until an appeal of the court’s decision is resolved; FHFA argues that the court did not have jurisdiction to direct FHFA to undertake this rulemaking. If that appeal is successful, the rulemaking process would likely be voided. If the rulemaking process continues – but the FHFA’s final rule does not respond to, reflect or account for the balance of comments received – the FHFA could be subject to further lawsuits.
Alliance, Other Supporters to Comment
The Alliance is working with a broad group of stakeholders to prepare official comments and assisting Congressional offices in preparing letters to FHFA in support of PACE.
Supportive organizations not preparing their own comments in the Federal Register will be able to sign on to the group’s comments – email the Alliance if your organization is interested. Aside from the rulemaking, you can also support PACE legislatively: Congress is currently considering legislation that would protect PACE, and you can show your support by sending a letter to your member of Congress via the Vote Solar site.