One of the energy policy successes in Michigan in 2010 was the passage of the Property Assessed Clean Energy Act (Public Act No. 270, 2010). Eric Jamison worked with the Great Lakes Environmental Law Center as a Clean Energy Fellow to develop and enact PACE legislation in Michigan, and offers this guest post on the recent success.
On December 15, 2010, former Governor Granholm signed the Property Assessed Clean Energy Act (Public Act No. 270, 2010). The legislation is designed to allow property owners to pay for energy efficiency and renewable energy improvements over a number of years as a special assessment on their tax bill. One key feature is that in the event of a property transfer the payback obligation stays with the land, not the original property owner. For a more detailed description of PACE, see my previous post, Property Assessed Clean Energy - A Bright Spot in Michigan’s Economic and Environmental Future.
With the leadership of former State Representative (now State Senator) Rebekah Warren and former Washtenaw County Commissioner (now State Representative) Jeff Irwin, and support form Johnson Controls, the bill moved relatively quickly through the House and Senate. The GLELC was fortunate to have an opportunity to research and develop substantial portions of the legislation with input from various local and national lawyers, public interest groups and municipalities.
Earlier in the year residential PACE programs were largely slowed by concerns from Fannie and Freddie Mac. (See the previous post, The PACE has stopped - federal agency makes short-sighted decision to halt common sense clean energy policy.) The Michigan PACE bill was changed in two significant ways to account for the concerns raised by Fannie and Freddie. First, the mortgage holder must consent to the assessment being placed on the property. Second, residential properties are not eligible for PACE programs; only commercial and industrial properties are eligible for PACE assessments in Michigan. Despite these limitations, the PACE Act will offer a tool for building owners and municipalities to lower the cost of ownership and reduce dependence on traditional energy sources. The Miller Canfield law firm has more information for interested business and local governments.