Getting Ready for PACE in New Jersey (Part 8)

The last section concluded our review of the PACE law. What we begin here is a consideration of the draft Guidelines issued by NJEDA, currently undergoing review in the Attorney-General’s office. It’s possible — likely even — that some details will change. But the main thrust of the Guidelines is mostly likely to remain unchanged from the current version (Version 2), and consequently (with the usual caveat that we’re not attorneys) we can generalize about the program.

We might skip over the preamble to the Guidelines, except that it gives a picture of how the agency views the program, which is worth understanding.

After citing the law (N.J.S.A. 34:1B-374 to -382, the “C-PACE Act”), the introduction states:

The Garden State Commercial Property Assessed Clean Energy (“C-PACE”) Program (“Garden State C-PACE” or the “Program”) provides a new form of financing for renewable energy, energy efficiency, water conservation, and certain types of resiliency-related improvements for New Jersey. The Program works by enabling eligible commercial, industrial, agricultural, and certain multi-family residential real property owners to access financing to undertake these kinds of
improvements on their properties and repay the financing through the payment of an additional assessment to their municipality, similar to their real property tax, sewer, or water bill.

The C-PACE act directs the NJ Economic Development Authority (usually just called “the authority”) to develop the Guidelines, including standardized documents, to be used by program participants, and to implement and oversee the program.

The next section, describing the oversight authority, is notable in that it states:

 The Authority does not provide any financing to borrowers, nor does the Authority
approve any financing provided by lenders.

This is significant because the law allows the NJEDA to issue its own bonds and fund projects, but in deference to the private lenders/investors is choosing not to do so. It also states:

As part of its role of ensuring compliance with the Program Guidelines, the Authority, in its sole discretion, may decide to contract with one or more
third parties to assist the Authority. As allowed in the C-PACE Act, the Authority may enter into a memorandum of agreement with one or more State government agencies or instrumentalities to perform any actions the Authority may take with regard to the Program.

In short, any aspect of the program — other than the regular reporting requirements — can be assigned to private entities or delegated to local governments.

The next section addresses eligibility for the program. This will be continued in the next post.

Finally, nothing explains or justifies the delay in publishing the Guidelines, except that unlike some other governmental measures, PACE is not a response to an immediate crisis or problem, and therefore gets shuffled to the bottom of the deck when it comes to setting priorities in the AG’s office. Despite extensive advocacy (and industry lobbying), the Administration is clearly hobbled by its own procedures in getting this important program launched. And once it is launched, there’s always the danger that it will fail to attract the kind of uptake needed for it to make a real difference to the climate crisis. More on this to come.

(Continues…)

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