BRADENTON, Fla. — Virginia plans to offer federal qualified energy conservation bond financing to support the state's first program to assist public and private entities in implementing energy-saving projects.
The Green Community Program will provide low-cost financing for energy efficiency, energy performance contracting, alternative fuels, renewable generation, and environmental conservation projects, Gov. Terry McAuliffe said Dec. 10 as he signed an executive order creating the new initiative.
Virginia received an $80.6 million QECB allocation from the federal government, and is implementing a plan that will reallocate $41.6 million in unused sub-allocations to local governments if those issuers fail to take advantage of the financing within a prescribed timeframe.
QECBs are taxable bonds that require investors to pay federal taxes on the interest. Issuers can structure the debt as tax credit bonds in which investors receive federal tax credits in lieu of interest payments or as direct subsidy bonds where issuers get cash rebates from the Treasury to subsidize interest payments.
"QECBs are an attractive, low-cost financing tool for both the public and private sectors to increase energy efficiency in their facilities and realize energy savings on their bills," McAuliffe said. "By providing technical assistance to localities and businesses through the Energy Division of the Department of Mines, Minerals and Energy, Virginia can aggressively push for increased efficiency in all areas of the Commonwealth."
The governor's executive order instructs DMME to create the Green Community Program and offer the financing to the private sector and public entities qualified projects. The Virginia Small Business Financing Authority will be involved in the program as well.
The initiate will create a mechanism by which QECBs sub-allocations that are not used by certain localities within one year will revert to the state. The state will then allocate the bonds to other issuers.
In the next two months, Virginia's Division of Energy will issue a request for proposals seeking a firm or firms to administer the Green Community Program.
"In the tough economic times Virginia is currently facing, localities must find ways to maximize the efficiency of every dollar spent," said Secretary of Commerce and Trade Maurice Jones. "QECBs are a way to invest in needed infrastructure upgrades that can provide a return on investment in the form of lower energy costs and increased efficiency."
