MPSC Becomes First State Energy Agency in the Nation to Make Energy Efficiency Improvements to Its New Location Via Special PACE Financing

Contact: Judy Palnau, 517-241-3323
Agency: Michigan Public Service Commission

November 17, 2014 - The Michigan Public Service Commission (MPSC) today became the first state energy agency in the nation to make energy efficiency improvements to its new office location using Property Assessed Clean Energy (PACE) financing. Its move to 7109 West Saginaw Highway is scheduled to be complete by the end of the year.

"Michigan state government is committed to eliminating energy waste, and is able to use a variety of tools to achieve that goal," said MPSC Chairman John D. Quackenbush. "PACE is an innovative way that landlords, tenants and local officials can work together to pursue energy efficiency projects that would not otherwise take place. When complete, the retro-fitted, existing building where the MPSC will be located will feature the latest in energy efficient lighting and solar power, which will off-set electric bills."

Under PACE, the property's owner - Saginaw Plaza Ltd. - has agreed to finance about $488,000 of improvements, including LED lights, a 20-kilowatt solar array, and variable speed motors. By using PACE, the owner was able to obtain 20-year, fixed interest rate financing for these clean energy measures. The building will save more in reduced energy consumption than the cost of repaying the loan.

PACE became Michigan law as Public Act 270 in 2010. Since then, 13 districts have been created to finance innovative energy efficiency projects through property tax payments rather than regular bank loan payments. That arrangement allows the landlord to pass on property tax payments to tenants. PACE, therefore, helps overcome the problem of "split incentive," where a property owner with an inefficient building has little incentive to improve it because the tenant pays the utility bills.

The Eaton County Commission on Sept. 17 approved the use of PACE financing by joining the Lean & Green Michigan statewide PACE program.

"The MPSC Commissioners and staff took the initiative here to find a way to make their new headquarters more efficient - even though the State of Michigan does not own the building," noted Andy Levin, president of Lean & Green Michigan. "The partnership that made this happen blazes a path for private property owners with all sorts of commercial and industrial tenants to undertake major projects to save energy and produce renewable energy across the state."

The MPSC is an agency within the Department of Licensing and Regulatory Affairs.

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