The Missouri Clean Energy District was established in 2011 following an action in the state legislature, during its 2010 session, to create the Missouri PACE Act – RSMo 67.2800 et Seq.
The District was created by an action of the city of Jefferson, Missouri. Once created, the District became a political subdivision of the state operating independently of Jefferson City and began expanding its jurisdiction with the addition of each new member community.
PACE provides access to capital markets never before available to private property owners for energy project funding. The District board recognized the requirement for program scale. In practice, private capital sources needed to drive the program require sizable transaction size in order to deliver efficiency borrowing terms for the end user. For that reason the district constructed its operating model as an intergovernmental approach. When many communities band together the volume of funding required commands the most favorable terms.
Early district financing transactions included large commercial project funding. Property types included multifamily, commercial office, not for profit and public facilities. These transactions were an important aspect of the district’s early experience. Through them the district established important relationships in the capital markets and developed its legal and finance infrastructure which will positively benefit future borrowers.
To establish a residential PACE program for Missouri, the district board surveyed specialty IT and finance firms to seek a partnership to provide a robust market based offering. As a result of that search the board entered into an agreement to offer the services of Renovate America and established the Missouri HERO program.
That agreement put the district in the desirable position of being able to offer energy funding for both residential and commercial projects. In addition to every conceivable property type, ownership classification and use category, the program can offer funding to both large and small project financing needs. This is a critical aspect to assuring a truly market program is available for all qualifying projects whether large or small, public or private.