Rural Energy Savings Program Act of 2012
Rural Energy Savings Program Act of 2012
Introduced by Senators Jeff Merkley (D-Ore.) and Richard Lugar (R-Ind.), the Rural Energy Savings Program Act (RESPA) of 2012 (S.2216) is intended to create jobs and lower energy bills for families, small businesses and farms by promoting energy efficiency improvements to homes and buildings in rural communities. RESPA is similar to the Rural Star bill previously introduced by the Senators in the last Congress.
RESPA Act Summary
S.2216 would incentivize energy efficiency upgrades through on-bill financing programs in rural electric utilities. Rural Utility Service (RUS) loans channeled through the rural electric utility would provide the upfront capital for efficiency upgrades which customers would then repay through the savings recovered in their monthly utility bills.
Energy Efficiency Loan Program
Individual co-ops, state based groups of co-ops, public utility districts and public power districts would be eligible to apply for funding from RUS, a division of the U.S. Department of Agriculture (USDA), to establish local energy efficiency loan programs. The RUS loans to the utilities would have a 0% interest rate.
The utility loans to customers would be low interest (no greater than 3%) loans over relatively short repayment periods, up to ten years. Utilities would use the interest collected to either defray the cost of administering the program or for establishing loan loss reserves. For customers, eligible efficiency improvements would include building envelope upgrades and some heating and cooling equipment tied to the physical structure of the building, but not movable appliances. Each rural electric cooperative would determine its own specific list of eligible improvements and establish appropriate measurement and verification methods. In addition, prior to receiving a loan, an energy audit would be required to determine a customer’s savings potential from eligible efficiency upgrades.
Measurement and Verification
USDA would contract with outside entities to create measurement and verification standards for this program, to be administered by the Rural Utilities Service. The agency would also assist the utilities and cooperatives in establishing and operating their own measurement and verification programs.
Demonstration Projects
USDA would also be authorized to establish energy efficiency loan demonstration projects through rural electric utilities.
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