ADVANCING TX-PACE IN

WASHINGTON COUNTY

www.TexasPACEAuthority.org November 12, 2019

L O W E RUtility Costs

I N C R E A S ENet Operating Income

Bottom Line: Increased Building Value

WHAT TX-PACE DOES

3

What Contractors PITCH

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

✓ Strong ROI – will save $5.6M over system life✓ Innovative – groundbreaking efficient technology✓ 20-year warranties, proven expertise✓ Hedge against rising energy prices✓ Unparalleled tenant comfort

3

What the CFO/Owner HEARS…

X Where will I get the funding?

X What if I sell the building in 5 years?

X We only do 3-Year payback projects

X Good technology…but my tenant pays the energy bills

X Are these savings even real? I’ve been burned before…

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

4

Changing the Story

What if you could develop a solution that…1. Provides 100% up front funding of all hard and soft costs?

2. Allows a 20+ Year repayment term = immediate income source

3. Allows transfer of obligation automatically on sale

4. Doesn’t tie up borrowing capacity

5. Requires savings to be validated by third party review

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

5

WHAT IS TX-PACE?➢ Local Adoption economic development tool –

Property Assessment

➢ 100% long term, low cost, private financing

➢ For commercial; industrial; and multi-family

(5+ units) properties

➢ To implement energy efficiency,

water conservation, and distributed generation

(resiliency) projects

➢ Immediate positive cash flow6

WHAT TX-PACE DOES

Creates local jobs • Improves resource conservation • Saves money

WHAT TX-PACE DOES

WHAT TX-PACE DOESLOWER UTILITY COSTS and INCREASE NET OPERATING INCOME

Bottom line: Increase property value and Day One savings

9

10

PACE IN A BOX

“PACE in a Box” is a toolkit of recommendations

and templates for counties and municipalities to:

➢ Create uniform, user friendly, scalable,

and sustainable PACE programs

➢ Administered by a nonprofit in a

transparent manner, focused on gov’t tasks;

free market with decision/power in hands of

property owner

➢Financial➢No tax dollars (user fee)➢No risk to treasury➢No risk to public servants – HB 2654➢Limited impact on public servant work load

➢Fiduciary➢Build strong local stakeholder support➢Best practices/consumer protection➢Gov’t doesn’t compete w/private sector

➢Gov’t costs covered if foreclosure

11

LOCAL GOV’T RISK AVOIDANCE

12

LOCAL GOVERNMENT ACTION

13

Softex Headquarters • Travis CountyHVAC • Roof • Thermostats • Solar PV

Assessment: $291,000• Annual Savings: 190,000kWh

COMMERCIAL

Elgin General Store • Bastrop CountySolar PV • Assessment: $120,000 • USDA REAP Grant & Oncor Incentives: $62,000 • Annual Savings: 26%

Continental Gin Building • City of Dallas

Roofing • Glass/Glazing • Mechanical/HVAC • Lighting

Solar • Ext. Walls • Elevators • Utilities •Assessment: $5M

Annual Savings: 1.4M kWh; 11,000 mmBTU; 500 Kgal

14

1225 North Loop West • City of Houston

HVAC • LED lighting • BAS ControlsAssessment: $1.3 Million • Annual Savings: $185,000

Dallas Paint & Body Shop• City of DallasLED Lighting • Solar PV

Assessment: $74,000•Annual Energy Reduction: 92%

COMMERCIAL

($1,200,000)

($1,000,000)

($800,000)

($600,000)

($400,000)

($200,000)

$0

$200,000

$400,000

0 1 2 3 4 5 6 7 8 9 10

Cumulative Cash Flow

Self-Funded Option Conventional Loan Option PACE Loan Option

15

Family Eldercare• Travis CountySolar PV • Cool Roof

Assessment: $260,000 • Annual Savings: $20,000

Congregation Beth Israel • Travis CountyBoilers • Chillers • Window Film • BAS Controls

Assessment: $450,000• Annual Savings: $40,000

New Isis Theater • Tarrant CountyHVAC • Building Envelope • Water

Assessment: $2.3 Million • Annual Savings:

NON-PROFIT

16

R.J. Liebe Company • Navarro CountyHVAC • LED lighting

Assessment: $325,000• Annual Utility Savings: 30%

INDUSTRIAL & RETAIL

Simon Property Group • Multiple CountiesHVAC • Lighting • Water

Assessment: $10 Million • Annual Savings:

17

Plaza Hotel• El Paso County

HVAC • Elevator • Lighting •Windows • Plumbing

Assessment: $9.2M • HTC: $9.2M

Annual Utility Savings: 1.5M kWh; 7.7 Mgal

Kimpton Hotel • Tarrant CountyHVAC • Lighting • Water Heater

Assessment: $5.8 MAnnual Savings: 2,000,000 kWh; 15,000 BTU

HOSPITALITY

Barfield Building• City of Amarillo

LED lighting • Building Envelope • Water Efficiency •

Domestic Hot Water Heating •

Assessment: $6.4 M • HTC: $9M • Savings:

18

Affordable Housing • Travis County

HVAC • Roof • Interior & Exterior Lighting

Assessment: $1.6M •

Annual Utility Savings: 700,000 kWh;

Butler Brothers Building• City of DallasHVAC • Lighting • Insulation • Roofing • Glazing •

Plumbing • Irrigation • EnvelopeAssessment: $24M• Annual Savings: 40% energy;

RESIDENTIAL & MIXED USE

Nonprofit

Commercial Retail

Hospitality

Multifamily

Industrial

Commercial Office

Mixed UsePROJECT BREAKDOWN

TX-PACE BY THE NUMBERS

* As of September 30, 2019

$0.00

$10,000,000.00

$20,000,000.00

$30,000,000.00

$40,000,000.00

$50,000,000.00

$60,000,000.00

$70,000,000.00

$80,000,000.00

$90,000,000.00

$100,000,000.00

2015 2016 2017 2018 2019(1/1-9/16)

2015 2016 2017 2018 2019 (1/1-9/16)

ANNUAL TX-PACE INVESTMENT

INVESTED

+$101.5M

TOTAL PROJECTS

26

WHERE IS PACE?GROWING TX-PACE MARKET

➢ + $100 million of investment to date

➢ + 46% of state population covered

PACE is a WIN-WIN-WIN

21

✓ Property Owners – lower utility bills, energy independence,

energy efficiency, property value increase

✓ Contractors – source of increase in business, more local hiring,

best practices, keeping up with technology advancements

✓ Lenders – new loans, steady & stable process, fully collateralized,

Tax Assessment lien position, improved asset value

✓ State of Texas – reduced peak demand, improved grid loading,

distributed generation as resilient power source, improved air

quality, better water conservation

✓ Communities – increased economic development and jobs,

improved building infrastructure, more appealing building stock

RESOURCES:

22

➢ State Energy Conservation Office:https://comptroller.texas.gov/programs/seco/funding/pace.php

➢ Energy and Emissions Tool:https://pace.harcresearch.org

➢ Texas PACE Authority: www.TexasPACEAuthority.org

➢ Keeping PACE in Texas: www.KeepingPACEinTexas.org

➢ PACE Nation: www.PACENation.us

w w w . T e x a s P A C E A u t h o r i t y . o r g POWERED BY:

Marina Badoian-Kriticos,

Senior Advisor

Marina@TexasPACEAuthority.org