Missouri says, "Show Me The PACE"

19 Jul 2010 11:57 am
Missouri says “show me the PACE”; as has happened for Presidents Bush through Kennedy, does winning Missouri mean winning the country?
Lost in the hubbub over the FHFA and States suing the Federal Government is one bit of great news for the PACE Community: on July 12th, 2010 Missouri became the 23rd state to pass PACE-enabling legislation. Why is this good news, you ask? Well, for three reasons (at least):

1. Missouri voters have correctly predicted the outcome of every presidential election (save for two, 1956 and 2008) since 1904. Perhaps Missouri will once again be a bellwether, this time for PACE at a national scale?

2. Missouri’s a long way from Berkeley. The passage of PACE in Missouri is an indicator that PACE is a concept that transcends political, geographical, and social lines. We’ve seen this highlighted in other states as well, but this recent news reinforces the trend.

3. Missouri’s bankers backed PACE. A source close to the effort told me that participation from the local banker’s association was critical to getting the bill pushed into law, going as far as saying that their participation was “the only way [the bill] got passed.”

The genesis of the bill follows what has become a predictable path for PACE legislation: one local government becomes inspired by PACE and champions it at a state level. In the case of California that local government was the City of Palm Desert, which upon seeing the success of the Berkeley PACE pilot decided to push for state legislation (AB-811) that would enable all local governments to deploy PACE programs, not just Charter Cities like Berkeley. (It should be noted that Palm Desert is itself a Charter City and thus had pre-existing authority to deploy PACE. Pushing AB-811 was truly done out of the goodness of their good ol’ hearts.) In the case of Missouri, that local municipality was the City of Ferguson in St. Louis County. Every PACE program needs a champion, and it sounds like Missouri found it in Ferguson.

One challenge Missouri may have is in getting those PACE projects to pencil. It’s hard to imagine PACE underwriting standards becoming more lax as a result of the FHFA tussle, so any PACE project will most certainly have to be cash flow positive. The average residential retail price of electricity in Missouri is 7.65 cents per kWh, compared to over 15 cents in California and 11.2 cents on average for the U.S. One of the biggest drivers of clean energy economics is the cost of avoided electricity, so these rates will narrow the scope of available projects. That said, the “good” news is that Missouri’s building standards haven’t been as aggressive as other PACE states, so hopefully there are plenty of energy hogs out there to retrofit. And the electricity PACE will save in Missouri is particularly dirty: over four fifths of it comes from coal carted in from Wyoming. Let’s hope the FHFA lets us try.

Renew Missouri, a non-profit that worked to advance Missouri’s legislation held a workshop on Friday to kick off PACE efforts in the state. A PDF of the workshop agenda is available here. According to an article in the Columbia Missourian, they were expecting 50 and 80 turned up from 19 different municipalities. Here’s to you, Mizzurah.