Colorado non-profit, local utility partner for efficiency
- May 6, 2014 6:00 am GMT
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By Suzanne Pletcher
With winter on the way and the two aged boilers that provide heat to Grace Apartments expected to fail on any day for the final time, Caitlin Rood applied for financial assistance to replace them.
The sustainability manager overseeing energy efficiency at the low-income housing community of 58 families, Rood had worked with Energy Outreach Colorado (EOC) before on upgrades that included boiler replacement at another Colorado property managed by her employer, non-profit Mercy Housing, which manages 270 affordable housing properties in Colorado and other states. She contacted EOC again.
“Energy efficiency upgrades benefit residents and our ability to operate quality properties, but they must be low cost,” said Rood. “The challenge for managers of low-income housing is that financing is very tight. Without EOC’s help, we may have had to wait until the boilers actually broke down.”
After Rood called, EOC conducted a low-level energy audit of Grace Apartments. Not only did the boilers desperately need to be replaced, but energy-hog incandescent and fluorescent lights in the apartments and common areas needed replacement. And showerheads needed to be converted to conserve water.
EOC asked a contractor experienced in energy efficiency upgrades through Xcel Energy, Grace’s utility provider, to bid the work. The contractor then submitted the $185,000 package of upgrades to Xcel Energy for rebates that would offset the total cost of the project. EOC pulled in $50,000 from a municipal partnership and told Rood that Mercy Housing’s estimated share of the total project cost would be 30%—$65,000.
Rood then presented the estimate to Mercy for approval by its lending partners. The project was declined.
“EOC and its partners were offering us more than $100,000 in upgrades without a putting a lien on the property like a loan would require,” said Rood. “But the stumbling block was how much money we had available to invest in this, and at Grace we just didn’t have it.”
Colorado is one of a handful of states with an organization like EOC that and pulls together financing from disparate sources to fund energy efficiency improvements at low-income, multi-family properties throughout the state (Vt., Ore. and N.Y are others).
“Preserving affordable housing and mitigating future increases in the costs of energy is a smart investment for all,” said Jennifer Gremmert, EOC’s deputy director. “But it is an investment that many managers and owners of low-income housing are hard-pressed to make because their financing is tight and their margins slim. Utility energy efficiency rebates are crucial.”
Gremmert said that 33% of Colorado’s households are renters and about half of those pay more than 30% or more of their income on rent, qualifying them for affordable housing. The Colorado Division of Housing notes that vacancy rates of rental housing are very low while rents are increasing statewide. So while affordable housing managers are assured of full occupancy levels in their buildings, they most often are required by loan partners to keep rents artificially low.
The Colorado Public Utilities Commission gave top priority to energy efficiency rebate programs for affordable housing back in 2009 when they developed energy efficiency goals for investor-owned utilities, including Xcel Energy. Xcel Energy has asked the commission to reduce its energy savings goals by 28% by 2020 in a decision expected by June. If Xcel’s request is granted, it could lead to cuts in funding for low-income and other residential energy efficiency programs.
Utilities in most other states don’t offer efficiency programs for affordable multi-family housing, though that is about to change. A new partnership of The National Housing Trust, Natural Resources Defense Council, Energy Foundation, Elevate Energy and New Ecology is working to ensure that utility energy efficiency rebate programs are available in nine states to the affordable housing sector, which on average has older and less energy efficient units and which houses half of the nation’s 15 million very low-income renters.
Luckily in the case of Grace Apartments, Xcel Energy’s actual rebate came in higher than their initial estimate, and Rood received approval to spend $22,000 for the energy efficiency upgrades. The upgrades were completed in February 2014 are expected to save Mercy Housing’s Grace Apartments about $13,000 of its annual gas and electric costs.
“As a nonprofit providing affordable housing, this is significant savings,” said Rood. “This program helped us manage our costs and provided good service for our residents.”
Pletcher is the director of communications with the Southwest Energy Efficiency Project (SWEEP).