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WMEAC: While energy is debated, consider on-bill financing

• Jun 15, 2018 at 4:00 PM

Note: Since this column was published, some corrections came to light.

From LARA: The 2016 bill mentioned has been signed into law. LARA suggestion changing "bill" to "law." This is in the paragraph starting with "The loan program."

From City of Holland: The paragraph starting with "Holland's on-bill" states that Holland's 40-year plan is to cut gas and electric emissions in half. It's true plan is to cut CO2 emissions per capita in half and to improve home energy efficiency by 50 percent.

In February, the Grand Haven Board of Light & Power staff made recommendations to their trustees to shut down Harbor Island’s Sims III coal power plant unit by 2020.

 In April, the BLP’s trustees made the same recommendation to Grand Haven City Council, adding that all power be bought from the grid of private utilities after the shutdown.

In May, City Council discussed the future of the Sims III unit at a meeting. No final decision has yet been made.

More than 90 percent of the BLP’s power comes from their own sources, notably its 70-megawatt Sims III. The BLP says that if the plant is not shut down by 2020, $15 million in repairs and a 16 percent electric rate hike would be needed.

Some council members were hesitant to allow the site to close so rapidly. Others were ready to move the shutdown forward. Most vouched for community input.

Nearly 14,000 Grand Haven-area residents pay for the BLP’s energy services. Each resident should have an opportunity to provide input on Grand Haven’s energy future, whether by public comment or vote.

However, no matter whether the Sims III unit stands, a new community power plant is built or if power is drawn from the grid, Grand Haven-area residents should encourage their utility to offer on-bill financing.

 On-bill financing allows homeowners to pay for home energy upgrades through a low-interest loan tacked onto their monthly electric bill rather than paying for an upgrade up-front.

Energy upgrades decrease energy consumption and increase energy efficiency and home comfort. Even with on-bill loans added onto a homeowner’s energy bill, the savings made from upgrades could knock the bill payment below pre-loan levels.

The loan program was first made available to Michigan municipal electric utilities, like the Grand Haven BLP, in 2014. A state bill in 2016 will allow rate-regulated utilities to offer on-bill loan programs for residential customers. The Michigan Public Service Commission just closed their public comment period and are finalizing rules to send to the secretary of state.

The City of Holland’s Board of Public Works is the only Michigan utility implementing on-bill financing so far. The city encouraged their former state representative, Joe Haveman, to sponsor the 2014 bill, then implemented the resulting program as a part of their 40-year plan to cut electric and gas consumption in half.

Ken Freestone, Holland’s residential energy adviser, works with homeowners to find the energy retrofits that best suit their budgets and homes. Solar panels and wind turbines aren’t the only upgrades one can make under Holland’s program. In fact, Freestone makes those recommendations last.

 Instead, Freestone first focuses on low-cost, quick-return retrofits. Air sealing, duct sealing and ventilation, window and appliance upgrades all qualify for an on-bill loan. So does anything on the pages-long Michigan Energy Measures Database.

Holland’s on-bill loans are equitable, too. All interest rates are below 7 percent. Payments can transfer to new homeowners. No credit reports are required, either. Only 12 months of on-time electric bill payments and three years without filing for bankruptcy.

The upgrades made will begin to pay for themselves, but if a Holland resident completes more than $10,000 of upgrades, the savings continue. They qualify for a 10 percent rebate under the Holland Home Energy Retrofit Program.

Aside from saving money — and the environment — Freestone also hears about secondary benefits from financed retrofits from homeowners.

“They’re looking at, of course, savings of (money) and kilowatts, but I’m hearing about comfort, and I’m hearing about health, and I’m hearing about safety in some cases,” he said.

Reduced drafts from air sealing stabilizes the house temperature. Energy Star appliances often run quietly. Each small improvement, along with each reasonable electric bill, typically makes for a happier homeowner.

The additional perks provided by Holland’s Board of Public Works are not written into Michigan’s on-bill laws, but each utility that will provide on-bill loans needs a program. Grand Haven residents could work with their utilities to ensure the same equitable, consumer-oriented programs are implemented for themselves.

If Grand Haven-area residents’ future utility turns down requests for on-bill programs, residents can finance their energy upgrades with the help of the non-profit Michigan Saves. Although a credit score of over 640 and a debt-to-income ratio under 50 percent is needed, most interest rates hover just below 5 percent. A resident only needs to find a Michigan Saves-authorized contractor to complete an assessment, then apply for the loan required.

Grand Haven’s energy future is in question, but its citizens can work to make sure that their own future is more certain. Energy can be provided to all in a way that is clean, sustainable and great for checkbooks.


About the writer: Beau Brocket is working as the journalism intern for the West Michigan Environmental Action Council this summer.

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