5.28.21 - Pas As You Save® in Forbes, VERGE Electrify, and ACEEE Finance Forum
Updated: Oct 5
Yesterday, Forbes published an article Bridging The Energy Efficiency Divide which featured Fellow PAYS Pals Dr. Anthony Kinslow II, Dr. Holmes Hummel, Marshall Cherry, and Stephen Bickel! Here are the highlights:
“We have severe inequities within this space,” said Kinslow. “The solutions we are developing are only built for people with a certain amount of income and security. But we have to reach 100% of buildings to have 100% clean energy.”
“People who live in the most distressed housing stock have the most lucrative opportunity for energy efficiency upgrades, yet our financial services sector is regulated in a way that prevents them from being reached on terms that would be considered fair and not predatory,” said Hummel.
“What we have learned is that there is a business case for the utility,” said Cherry. And the data backs it up, according to a 2020 analysis of Roanoke’s program by Stephen Bickel and a team from LibertyHomes and Enpira. “Even after taking into account the cost of capital…[Roanoke Electric Cooperative’s] investment portfolio is generating economic benefits,” they said in the report. Co-ops have demonstrated financial success with these kinds of Pay As You Save programs that improve energy efficiency for low-income communities, especially in rural areas.
DOE Loan Program Director, Jigar Shah, who is looking to rapidly expand DOE’s lending using its $46B in loan guarantee authority, mentioned ramping up inclusive utility investment programs such as PAYS during his keynote speech titled The Key To Financing Deep Electrification.
In another Keynote session titled Ensuring Electrification of Everything is Equitable, Curtis Wynn, CEO of Roanoke Electric Cooperative (REC) and former President of the Board of the National Rural Electric Cooperative Association, spoke about REC’s pioneering PAYS program, Upgrade to $ave (U2$). (For more information about U2$ see the bullet below on REC COO Marshall Cherry’s presentation at the ACEEE Finance forum)
VERGE also hosted an Electrification for All panel moderated by Dr. Holmes Hummel which featured Anita Knight of Roanoke Electric, SaLisa Berrien of COI Energy Services, and Donnel Baird of BlocPower. Each of the panelists discussed the ways in which their companies are making electrification for all real. They ended the session with a desire to learn from one another through partnership!
The panel titled Inclusive Utility Investments: Tariffed On-Bill Programs for Energy Efficiency was moderated by Dr. Anthony Kinslow II and featured Marshall Cherry of Roanoke Electric, Craig Aubuchon of Ameren, and Tammy Agard of EEtility. Their pdf presentations are attached and the recording will be available in a few days.
Dr. Anthony Kinslow II delivered a historic panel introduction that centered on the intersection of inclusive solutions and systemic racism. Here is a quote from Dr. Kinslow’s remarks:
“Today we are here to talk about inclusive utility investments. I am personally excited to introduce a model that is smart business for the utility and an equitable solution for customers. In fact, I introduce this solution as antiracist. Yes, even at the energy efficiency financing forum we are going to bring up systemic racism. Racist policies and strategies in the U.S. financing sector from predatory lending to redlining have resulted in racially marginalized groups being forced to live in areas with inefficient housing and higher levels of pollution. Moreover, black and brown and indigenous households are spending significantly more of their income on energy. This is referred to as an energy burden. They have less income and wealth relative to a white household. So how does this relate to today’s session? Simply put, today we are discussing a solution that does not exacerbate these realities. Unlike the debt-based solutions such as loans and rebates that are pervasive in the clean energy community, eligibility for tariffed on-bill (TOB) doesn't rely on credit score, it doesn't rely on customers owning the property, and it doesn't depend on the household being rich enough or poor enough to be eligible. The only criterion is cost effectiveness which, in this case, is whether the suggested upgrades to the house will result in enough savings to pay back the investment with a sufficient buffer so that the savings are immediately realized by the customer. We know due to historic and current disproportionate investment into racially marginalized communities, these are the communities that have the highest savings potential and are most cost effective. As such, TOB is not just a solution that presents a good business opportunity for utilities, but by implementing it we are also combatting the systemic and historical injustices that persist today.”
Marshall Cherry, COO of Roanoke Electric Cooperative, NC, highlighted that while their Upgrade to $ave PAYS program was created to help relieve the burdens of customers with high bills (as high as $600/mo) a program evaluation showed that, on average, upgraded home’s are generating $3,000 in net present value to the coop over and above the benefits and savings to the customer.
Craig Aubuchon, Senior Manager of Energy Efficiency Operations for Ameren, MO, gave an overview of their new PAYS program that is authorized for two years at $5M and $10M. A key question they are looking to answer is whether PAYS is a broad program for providing a broad range of measures to a broad set of customers or is it a narrow program providing a narrow range of measures to a narrow set of customers. That question remains open until more results and different customer acquisition models are tested. At present he sees PAYS as both working as a stand alone program for moderately energy burdened households and complementing and enhancing their existing low-income and rebate programs.
Tammy Agard, CEO of EEtility, the only multistate program operator of PAYS, which operates both the Roanoke and Ameren programs, gave an overview of their approach and expectations of expansion to a number of additional states in 2021 as well as giving a preview of bigger changes we’ll cover in full in a later edition of PAYS pals.