Leg with Louie – March 2

The House Energy Committee held an initial hearing last week on HB 374 – legislation that would allow electric and natural gas utilities in Alaska to offer “on bill” financing of home energy improvements for their customers. With on-bill financing, ratepayers and utilities enter a arrangement where the utility finances the purchase and installation of a renewable energy system, energy efficiency device, or energy conservation system in an eligible residence or building, and the ratepayer repays the utility for the cost of the renewable energy system or device on their monthly bill.

This is particularly advantageous for low to middle income property owners who may not have access to capital for the purchase installation of renewable energy.

There is a wealth of experience in the lower 48 with on-bill financing programs which have been in effect for over 30 years. Currently over 100 co-ops in 26 states offer some form of on-bill financing.

We support HB 374 as a way to increase renewable energy and energy efficiency in Alaska. On-Bill Financing is policy tool that will help Alaska reach its aspirational Energy Policy Goals established in 2010 under HB 306 of achieving 50% renewable electricity by 2025 and a 15% increase in energy efficiency per capita by 2020 – a date which is fast approaching. We believe that on-bill financing prepare Alaska to accommodate mandatory statewide energy efficiency and renewable energy targets should such targets be codified into statute in the form of an Energy Efficiency Resource Standard or a Renewable Portfolio Standard, common in many states.

Rooftop solar, and thermal heat pumps are two technologies that we would like to see increase in use through On-Bill Financing programs in Alaska

In Juneau, about 200 air source heat pumps have been installed in residences around town in the last three years alone. Air source heat pumps offer a lower cost alternative for thermal heating (and cooling) than electric and diesel. This technology works in Alaska – studies in Ambler and Deering show that it works efficiently for space heat purposes up to zero degrees. On-Bill financing of air source heat pumps could drive a major increase the use of this technology throughout Alaska. In Maine, over 20,000 thermal heat pumps have been deployed in the last few years.

In Anchorage, The Alaska Center is working in partnership with Launch Alaska, the Alaska Center for Energy and Power, National Association for the Advancement of Colored People and others to facilitate bulk purchase and installation of residential rooftop solar panels for neighborhoods starting with Airport Heights – under the banner of the Solarize Anchorage campaign. On-Bill financing for solar could help homeowners who wish to invest, yet who may be at an income level where mortgage and other payments preclude upfront investment in renewables.

HB 374 is voluntary on the part of utilities. Obviously the effectiveness of an on-bill financing mechanism relies on the willingness and ability of an electric or gas utility to adopt the program on behalf of their ratepayers. Should HB 374 pass into law – ratepayers will need to advocate for it.

HB 374 is scheduled for a second hearing this week in the House Energy Committee on Thursday, March 8th at 10:15 a.m. Learn more>>