Penticton will be offering energy retrofit loans through its electric utility, despite the objections of two councillors who say the city should not putting itself in competition with banks.
In November 2012, city council directed staff to investigate setting up an energy retrofit loan program. Similar programs, mandated by the B.C. Utilities Commission, are already in operation with BC Hydro and FortisBC, as well as the City of Nelson, which also operates its own electric utility.
The program, which will cost $135,000 to start up this year, growing to operating costs of $403,000 in 2016, will be funded from the electric utility’s reserve accounts.
Qualifying homeowners will be able to borrow up to $10,000 at low interest rates, paid back over a 10-year term through their monthly electric bill.
“It provides a financing option to homeowners who might not otherwise have access to a low interest rate loan,” said Eric Livolsi, operations manager for the electric utility. “High interest rates could dissuade them from participating in existing incentives, you have to have the money upfront to get those rebates back.”
Coun. Helena Konanz, however, doesn’t think this is the right time to either be hiring the consultants needed to set up the program or drawing down the electric reserves.
“I don’t feel comfortable about taking any more from our reserves right now,” said Konanz.
Currently, the electric utility reserve stands at $3.2 million, expected to drop to $810,000 in 2014 as the city makes some improvements to the system. In 2015, however, it will be back up to $3.5 million and $6.6 million in 2016.
“Thirdly, I don’t think we should be in competition with the banks and local financial institutions who give really good low interest loans if you own your house,” said Konanz.
Only Coun. John Vassilaki joined her in opposing the plan.
“We’re not a bank, don’t ever expect the city to be a bank and start making loans to compete against banks and other institutions,” said Vassilaki, who was also concerned that the budget requirements for the program added up to more than $1 million over the next four years, including the amounts budgeted to be loaned out.
Drawing that money from the electric reserves, he said, could affect future projects by the city, which regularly draws on the reserve for capital funding as an alternative to increasing taxes.
Other council members like Coun. Wes Hopkin, were drawn by the possibility that the loan program would help stimulate green job growth, as homeowners hired contractors to perform the energy retrofits and upgrades at minimal cost to Penticton.
“I think this is going to be a great effort to bring more jobs to this community and these are green jobs,” said Hopkin. “It’s a net zero to the city, it is going to bring jobs.”