Cities in Midwest Collaborate Fund Energy Efficiency Projects and Send a Signal
Michegan municipalities are working together to find innovative funding mechanisms for local energy efficiency projects, despite the challenge of falling property taxes and shrinking state revenue shares within the region. The desire for energy efficiency is definitely out there, explains John Kinch, executive director of Michigan Energy Options. Municipal leaders “recognize the need and we want to do it, but we don’t have the money to do it.”
Luckily, collaboration is proving successful. For example, by aggregating multiple projects from different cities, it becomes possible to leverage a single bond offering to fund them. Some have set up an energy fund that captures a portion of energy savings to reinvest in efficiency projects. Others are joinng forces to organize their communities to adopt a regional renewable portfolio standard (RPS) for municipal energy users. The fruits of these seeds are already being enjoyed, from the installation of 70,000 LED streetlights in the metro Detroit region, to an innovative recycled heat project in southeast Michigan — where a compressor room melts snow collected by the ice arena’s Zamboni. < Watch Video >
These municipal projects send a clear signal to city residents that energy efficiency is a good investment and use of their tax dollars, with the added bonus of making a meaningful difference in reducing air pollution and addressing climate change for the benefit of all citizens.
Small cities remain fertile ground for efficiency projects
Andy Balaskovitz | Midwest Energy News | 4/23/2015
Over the past decade, Michigan communities have been hit with a one-two financial punch. One from declining property values and the subsequent loss of tax revenue, the other from steady declines in statutorily shared revenue from the state.
So it hasn’t exactly been easy for municipalities to pursue meaningful energy efficiency upgrades intended to save taxpayer money in the long run.
“When it comes to political willingness to do energy efficiency projects, that is a very low bar. Most communities want to make their buildings and their systems more energy efficient and when you talk to them about it, you don’t come across people who say we want to waste more energy,” said Conan Smith, executive director of the Michigan Suburbs Alliance, which helps facilitate projects through the Southeast Michigan Regional Energy Office. Smith is also a county commissioner in southeast Michigan who represents Ann Arbor.
“Where the challenge arises is the financing structure. The way municipal financing structures work, it’s not likely they’re going to have a lot of excess revenue in the next decade. The question becomes: How do you get money to capitalize on these kinds of projects?”