With 254 counties and over 1,200 municipalities, it is not efficient to keep asking each local government to establish its own program, create uniform documents and policies and oversee a local program in order to bring state-wide uniform benefits to its local business community.

A common sense adjustment/evolution is to establish and administer one state-wide PACE program of best practices and invite local governments to opt-in if they so choose.

The program will be overseen by the State Energy Conservation Office (SECO) in the Comptroller’s Office using its existing authority. By amending the PACE Act to rely on SECO to issue an RFP selecting a third-party to administer the program, this bill will create the most efficient, cost effective way to bring the Texas sized PACE Economic Development program to all of Texas.

By eliminating the burdens of establishing and administering local programs and enabling local governments, instead, to opt into one inclusive program, this bill is intended to expedite the availability of the PACE program in all parts of Texas, so that rural and urban businesses can take advantage of PACE to address deferred maintenance with energy and water saving improvements.

One uniform program has significant advantages:

• Eliminating multiple local program overheads will spread costs to a more efficient, larger market, reducing cost for all participants
• Ease of use and lower transaction costs result when stakeholders have to learn only one program; avoids confusion when programs differ along county/city lines
• Owners of property throughout Texas can close multiple PACE projects in multiple jurisdictions with ease and economies of scale
• One Texas market enable local lenders (banks and credit unions) to offer PACE financing to their customers and sell the long-term projects in a large scale secondary market, overcoming the challenges of holding the projects for 20+ years.
• Local lender participation will enable PACE financing to be more readily available in smaller communities, rural areas and agriculture

• Facilitate expansion into rural and border areas where standing up a local program in a small market is more difficult, yet vital; rural communities, farmers, and industrials – all market areas where water and energy savings can be significant to these businesses and the communities
• Uniform underwriting and technical standards across the state will result in uniform training, review of projects, quality control and application by keeping quality program protections in place;
• Uniform application of the program will enable uniform collection of statewide project data (resulting energy and water savings, impact on clean air, jobs, etc.) using the TX-PACE Energy and Emissions Tracker data base created by the Houston Advanced Research Center. The data will be valuable in establishing measurable energy efficiency improvements in Texas.

Oversight by SECO in the Comptroller’s Office has significant advantages:

• SECO can execute the RFP and oversee the third party administrator using existing statutory authority and with deep expertise of energy and water efficiency, on demand and distributed generation technologies and implementation.
• SECO has deep expertise in oversight of energy and water saving projects in the public sector. SECO has administered the LoanSTAR Revolving Loan Program, for over 20 years. The program has loaned over half a billion dollars with a zero default rate.
• SECO leadership chaired the working group that designed the Technical Standards for the PACE in a Box program and has a deep knowledge of the TX-PACE program
• Oversight of this financing program by SECO in the will ensure the highest ethics to ensure that the third-party administrator is acting only as a government representative and does not engage in any market activity that it oversees.
• Because the PACE in a Box market is already underway reflecting SECO’s expert advice, oversight will require minimal staff time and should not result in a minimal fiscal note, if any.