County sets public hearing to explore PACE program

Stephens County is taking steps toward establishing a Property Assessed Clean Energy (PACE) program, a move that could unlock long-term financing for energy and water efficiency upgrades across the region. 

At the commissioners court meeting Monday, Oct. 27, commissioners adopted a resolution of intent to establish the program and scheduled a public hearing during the next regular meeting at 10 a.m. Monday, Nov. 10. 
The public hearing will allow for residents and stakeholders to learn more about the PACE program and the county’s stance on it. 

The PACE program was authorized by the Texas Legislature in 2013, enabling cities and counties to create voluntary financing mechanisms that allow property owners to fund upgrades to HVAC systems, lighting, roofing and plumbing–without using taxpayer dollars or assuming financial risk. 

Charlene Heydinger, President of the nonprofit Texas PACE Authority, joined the meeting to explain how the program works and its potential impact. 

“This statute is attempting to overcome a problem, and the problem is that energy and water efficient equipment is really expensive, and it takes a long time for it to break even,” she said. “So there are real disincentives for any business or nonprofit to spend more money on more efficient equipment.”

Heydinger emphasized that the program is voluntary and designed to eliminate risk for lenders. 

“Lenders also don’t like to loan money on equipment, because the collateral is not good. They can’t come and take an HVAC system if you don’t pay,” she said. “So what you would be doing if you create your PACE program is you create a mechanism that eliminates the risk for lenders. So lenders will loan over a longer period of time, and if you stretch our financing long enough, the savings will exceed the cost.”

Michael Paris, Executive Director of the Breckenridge Economic Development Corporation, highlighted the program’s potential to support local business and attract new investment. 

“We want to look at this PACE program to help us with development within the community, retail sector, as well as the other sectors and businesses. This program is important because all over Stephens County, we have market tax credits,” he said. “It’s a great way to use it as a tool to entice people to take a look at Stephens County for development.”
Paris also pointed to the flexibility PACE offers for entities facing tight cash flow. 

“Let’s say we have a manufacturing facility. Let’s say we have a church. If they needed to replace something for efficiency, whether it’s water or HVAC related...The bank says, ‘Well, I’ll give you a loan for a couple years,’” Paris said. “The Pace program can evaluate that project…and say, ‘Instead of shorter term for that HVAC system, let’s extend that to maybe five or seven years.’” 
Heydinger confirmed that PACE financing can be blended with other sources. 

“We encourage people–get every utility incentive you can and every other source of financing–and then PACE can fund the energy and water efficiency,” she said. “It’s completely voluntary for all parties, but our hope is to increase jobs for your HVAC folks and plumbers and roofers as well.”

Unlike other states, Texas PACE assessments are not added to property tax bills. 

“Our tax collectors testified in support of the statute, but when it came to figuring out how this was going to work, they went, ‘We can’t put these on the tax bill. We don’t have the right software or the people,’” Heydinger said. “So the tax collector’s office is not involved. Installments that are due are legally due to you, but they’re actually sent directly to the lender. So we get rid of all of that bureaucracy.”

The resolution unanimously adopted by the commissioners sets the stage for further public input.

“This just gets the ball rolling, (there is) nothing official (that) we vote on today,” County Judge Michael Roach said. 

The hearing at the next meeting Monday, Nov. 10 will allow residents and stakeholders to review the required program report–also to be made available for review on the county website–and share feedback before any formal adoption.