The City of Fayetteville Takes A Step Closer to Having the First PACE Program in Arkansas

At the Arkansas Advanced Energy Association’s “Hour of Power” event this past August, City of Fayetteville Mayor Lioneld Jordan was blunt: he intended to do everything within his power to position the City of Fayetteville to be the first to make Property Assessed Clean Energy, or “PACE,” financing available to its citizens.

Mayor Jordan and the City of Fayetteville took an important step towards that goal last week, filing a proposed ordinance that would create an Energy Improvement District to manage innovative financing programs for advanced energy improvements on residential, commercial, and industrial real properties. These programs include PACE financing options.

Act 1074 of 2013, now codified at Ark. Code Ann. Section 8-15-101 et seq., authorized governmental entities to establish energy improvement districts for the purpose of managing PACE programs. (By way of definition, a PACE program is “a property assessed clean energy program under which a real property owner can finance an energy efficiency improvement, a renewable energy project, and a water conservation improvement on the real property”.)

The PACE Act directs governmental entities to create PACE districts by adoption of an ordinance. Like traditional improvement districts, once created, PACE districts are operated and controlled by a Board of Directors.

This is what the Fayetteville PACE Ordinance accomplishes: it creates Energy Improvement District No. 1, and creates a seven-member Board of Directors to operate and manage the District.

Passing the PACE Ordinance does not finish the job. The District’s Board of Directors will need to be populated, and it will need to figure out how to govern itself. A means for determining when energy efficiency improvements will result in “positive cash flow” needs to be worked out. Most importantly, the financing program needs to be put in place. This means identifying underwriters, issuing bonds, figuring out how PACE financing will be occur for residential properties, and, most likely, getting a third-party administrator in place. But none of these things happen until the PACE Ordinance is in place.

The proposed PACE Ordinance is on the agenda for the October 15, 2013, meeting of the Fayetteville City Council. The Arkansas sustainasphere, and this sustainablawger, will be watching.

The Fayetteville PACE Ordinance and some related materials can be found here. 

Reflections on the AAEA Second Annual Meeting and Policy Conference

The Second Annual Meeting and Policy Conference of the Arkansas Advanced Energy Association (AAEA), held yesterday in North Little Rock prompted me to reflect on what it means to practice sustainability law in Arkansas. 

What it means, more often than not, is uniting apparently disparate interests in a way that furthers the client's sustainability agenda and achieves the client's goals (of which, presumably, one is furthering the sustainability agenda). Consider the simple act of uniting sustainable business practices – such as efficiency in the use of paper and energy, with the notoriously inefficient practice of law. For a client that wants to use, or must use, (or both) vendors, contractors, and professoonals who meet certain sustainability standards or criteria, this simple act takes on considerable importance.

Against this backdrop, I highlight two strands of thought from the AAEA conference. The first is from the keynote speaker, former Colorado governor Bill Ritter. Governor Ritter observed that it was unlikely that comprehensive advanced energy legislation would be forthcoming from the federal government anytime soon. Instead, advancements in the law of sustainability would be found locally, and, ultimately, public policy would provide the leverage to move forward. These are not state secrets revealed. But to a lawyer who practices sustainability law, Governor Ritter’s plain spoken observation is a gut check. One of my mentors in the law used to reflect that, “for a lawyer, public policy is the refuge of a weak mind.” And it’s mighty difficult to provide advice and counsel about laws that do not exist and public policies that aren’t law.

The second thread comes from Matt Dromi, a co-founder of the Fayetteville, Arkansas-based company modthink. Presenting on “Harnessing the Power of Social Media for Advanced Energy Business Growth,” Dromi emphasized that successful social media campaigns were authentic and embraced humanity. This means less, “come to my event” or “here’s a coupon for some pants,” and more, “this is my real story” and “this is how we are alike.” In two words: similarities connect.

These two disparate ideas tie together in the practice of sustainability law. More often than not, lawyers are focused on differences, and clients, particularly before attorneys fees exceed budget, dig their heels into ground wrought from principle. For example, in reviewing a contract, the lawyer's first line of inquiry is usually something like, “What’s wrong with this deal?” or, “How is this different from what I expected?” as opposed to “What is good about this deal?” or “What provisions do I definitely want to keep?” The client's companion position might be something like, "I never waive the security deposit" or "I always litigate on my turf," instead identifying with areas of common interest, such as a mutual commitment to maintain the LEED certification of a building, and to share costs to do so.

This is the sustainability law that I practice – a practice driven by client goals and guided by embracing similarities. The fact that we are dealing with sustainability subject matter means that, by definition, there are similarities and that those similarities relate directly to client goals. Identify the common ground and point out to your adversary (and, perhaps with some finess, your client) that the two of you are already standing on it and identify exactly what that means: that from the start, some principles are aligned and some goals achieved. 

The law of sustainability is different from other areas of law because, properly practiced, it is driven by similarities between and among parties as opposed to differences. Yes, parties negotiating a green lease may be adversarial, but they are also united by the common principals inherent in a green lease, such as the desire to preserve and promote a green building. Yes, an employer/employee relationship is often marked by an imbalance of power, but as the employer adopts sustainable business practices the two are united by a common interest in the employee’s welfare. The similarities align with goals, and if the parties start with a focus on the similarities, they are more likely to achieve the goals. A settlement of a contested piece of litigation is often described as a deal that no one likes. The resolution of a sustainability claim can be just the opposite – a deal that serves the goals and common interests of all involved.

And to me, that is what the practice of sustainability law is about.

 

A Blow to the Arkansas Sustainasphere: Nordex USA to Cease Arkansas Production

The Arkansas Advanced Energy Association (“AAEA”), reported this morning that Nordex USA will soon be ceasing production at its’ manufacturing facility in Jonesboro, Arkansas:

AAEA learned this morning that Nordex USA will cease nacelle production at its Jonesboro, Arkansas facility after it completes the orders in its current pipeline. The decision was driven by the wind industry's global overcapacity and the continued uncertainty and instability of the US market. The decision will not impact the current year's business performance, as exceptional expenses were already accounted for in 2012 as previously reported. The training academy, the central parts storage and the repair facility in Jonesboro will remain in operation to support Service and Operations in the Americas. Around 40 employees will be affected with layoffs beginning in October 2013. Ralf Sigrist, President & CEO of Nordex USA, Inc. commented, "This is a sad day for all of us at Nordex USA. We will lose valued colleagues, who have done their very best for us, but the decision was inevitable considering the underutilization of our plant." In the future, nacelles for the North and Latin American markets will be supplied from Nordex' factory in Rostock, Germany, using the global supply chain and logistics support based there.

Special thanks to the AAEA folks for sharing this developing news.

Leading the Transition to Sustainable Energy

The start of 2012 finds considerable steam building in the Arkansas sustainasphere for real progress in energy-related sustainability initiatives – whether identified as “clean energy,” “renewable energy,” “advanced energy,” or something else. This is the year in which we will be both reflecting on the failures of the 2011 Arkansas legislature to take comprehensive and significant action regarding sustainability and in which we will begin laying the groundwork for more meaningful legislative action in 2013. The emergence of the Arkansas Advanced Energy Association is but one signal that sustainable energy is an area that will get attention when Arkansas lawmakers convene.

On December 26, 2011, ArkansasBusiness.com published a thoughtful guest commentary by Glen Hooks, “Clean Energy: Nothing to Fear.” Mr. Hooks’ commentary, reprinted with permission in its entirety below, is an example of one of the many voices that will be heard in the discussion of the future of sustainable energy in Arkansas. I present it here because, if nothing else, Mr. Hooks makes at least one valuable point that is often lost in the rhetoric of heated political discussion: Embracing sustainable energy will not lead to the immediate demise of fossil-fuel based energy. Proponents of one or the other often cast the debate in “all or nothing” terms that ignore the possible coexistence of, say, coal-fired power plants and biomass fuels cogeneration plants. The fact is, as Mr. Hooks points out, that there will be a transition period. And it will be significant, likely measured not in years but in decades. For Arkansans, the timing could not be better, for, given the right forethought and planning, we have the opportunity to shape and profit from the transition and to emerge a leader. Here is the commentary:

In the Dec. 12 issue of Arkansas Business, state Sen. Jonathan Dismang provided commentary about our nation's energy policy. Dismang hit the predictable checklist used by the anti-environmental crowd: ridiculing government investment in clean energy, laughing at fears about global warming and throwing out accusations of political cronyism. Yet, after peeling away the derision, the only thing that he seems to support is the same energy policy we've had for two centuries: drilling for fossil fuels and burning them, no matter the damage.

For far too long, our nation's energy policy has relied on polluting, destructive fossil fuels like coal to generate most of our electricity. We now know that coal poses a direct threat to the health of our citizens and our environment. Ask the citizens of Appalachia, whose lives and livelihoods have been destroyed by mountaintop coal mining and polluted water. Ask American children across the country who live near coal-fired power plants and suffer much higher rates of asthma than other children. Ask the fisherman who can't eat fish from his local stream in Arkansas because of high levels of mercury spewed out by coal-fired power plants. Ask the residents of Tennessee, Oklahoma and Michigan, who have suffered the devastating ills directly attributable to faulty facilities that fail to contain coal ash.

These heavily polluting industries are also heavily subsidized by the government and have been for decades. Dismang mentioned two renewable energy companies that received subsidies but didn't mention that those investments are dwarfed by the subsidies given to the coal and oil industries.

I absolutely support our government investing in solid research and development of clean energy technology. Other countries, most notably Germany, have made incredible strides in renewable energy for their citizenry. Why shouldn't we?

Frankly, we can do better than drilling and burning. It's far past time for our nation to get serious about an energy plan that moves us away from dirty coal and toward a clean, renewable energy future. This cannot be done overnight, but we must change our nation's energy mix.

I'm happy to report that the clean energy transformation has already begun. During the last six years, 161 proposed coal-fired power plant projects have been canceled, including the Plum Point II plant scheduled for Osceola. In just the last two years, more than 30,000 megawatts of coal power - more than 10 percent of the existing fleet - have been scheduled for retirement. This means cleaner air, cleaner water and healthier Americans.

Importantly, transitioning our country toward a cleaner energy future also means thousands of good-paying construction and manufacturing jobs.

All around the world - and in the United States - we're seeing significant and major steps forward in renewable energy. Solar power is on the rise in places like San Antonio, which is closing its coal-fired power plant and building 400 megawatts of solar energy. Thousands of megawatts of wind power are being built in neighboring Oklahoma and Texas, and wind power is becoming less expensive every day. Even Arkansas boasts large companies that produce windmill blades and turbines and employ hundreds of Arkansans. I'm sure that Dismang and all of us are glad those companies are here providing paychecks to families.

Getting our nation off coal and fossil fuels will not be an easy task. It's going to require a transition period. Here at the Sierra Club, we're working on a 20-year plan in which our nation stops building major polluters like coal-fired power plants, relies upon safely and responsibly drilled natural gas as a transition fuel during the next several years, and invests in improving our renewable energy technology to the highest, most productive level possible. That's the kind of national energy policy we need.

Americans, by nature, are problem-solvers. That same incredible, American-led innovation that has put men on the moon now produces fantastic, non-polluting energy.

I believe that our country can do much better than simply drilling and burning. We can produce clean energy, put hundreds of thousands of Americans to work and become a world leader. All it takes is a strong will to do so and the ability to step away from the dirty energy sources of the past.

(Department of Biography: Glen Hooks is a senior campaign representative and regional director for the Sierra Club's “Beyond Coal Campaign.” He is also a lifelong Arkansan and an Adjunct Professor at Pulaski Technical College. Mr. Hooks graciously granted me permission to republish his commentary in this blog, and he can be reached at Glen.Hooks@SierraClub.org.)