Plan encourages home upgrades

South Carolina residents could make their homes more energy-efficient with no money down, while also paying lower electricity bills, under a loan proposal that cleared a legislative panel Tuesday.

The state's 20 electric co-operatives want to tie the cost of retrofitting homes to monthly utility bills.

Utilities would lend the money for updates such as new heating and cooling units and better insulation. Customers would repay the loan at a low interest rate, with payments built into their utility bills.

The monthly payment would be tied to the home, not the resident, so the responsibility would transfer to whoever lives there.

"We're trying to find a cheaper way to have enough energy for the future," said Michael Couick, CEO of The Electric Cooperatives of South Carolina, which provide electricity for one-third of the state's population.

He called South Carolina the "Saudi Arabia of energy inefficiency."

The state ranks 37th in energy efficiency nationwide, according to the Washington-based American Council for an Energy-Efficient Economy.

The measure is meant to overcome the two biggest reasons people don't upgrade their homes - they're not sure what to do, and they can't afford it, Couick said.

The co-ops' plan calls for a fixed loan of up to 10 years, at 2.5 percent, though the bill allows up to 4 percent above the yield for one-year Treasury bills. The measure allows, but doesn't require, every utility in the state to offer its customers something similar.

"Homeowners should jump all over this," said Sen. Paul Campbell, R-Berkeley, adding that landlords would also benefit by making property "more rentable."

The utilities would benefit because they could slow their need to build expensive power plants.

The co-ops hope to pay for improvements on 225,000 homes - or one-third of their customers - within 10 years, saving customers $280 million annually, and saving the equivalent in energy to half of a nuclear power unit, Couick said.

Couick estimates it would cost $750 million to retrofit the 225,000 homes, but he called it "small potatoes compared to (the cost of) half a nuclear unit."

He added, "It's a lending program. This is not a giveaway."

Environmentalists and advocates for the poor are praising the so-called "green lien" idea, as reducing the need for new power plants, lowering bills, and providing work for contractors in a state battered by record-high unemployment. A matching House bill cleared a committee last week.

"This is very important because South Carolinians are very wasteful in energy. Some of that is because we have a lot of older houses and manufactured housing that is energy inefficient," said Ann Timberlake of Columbia, executive director of the Coastal Conservation League.

The state-owned utility Santee Cooper has offered similar loan programs for nearly 30 years. But the customer must qualify, and the cost is tied to the homeowner, not the home.

The co-ops' plan allows more people to benefit, including renters and owners of older mobile homes.

"We don't even look at the creditworthiness of a tenant," Couick said.

Under the proposal, a certified energy auditor would determine how to best conserve energy at a home, and whether the estimated long-term savings are worth the cost of improvements. The homeowner would choose a contractor from an approved list, and an auditor would return to ensure the work is done correctly.

"We don't write a check to the contractor until he gets it right," Couick said. "The consumer won't be left with a shoddy job."

Under the co-ops' plan, two-thirds of the estimated savings would go toward repaying the loan. For example, if the drop in energy use results in a $100 monthly savings, $66 would go toward satisfying the debt, and the bill is still about $33 less than it would have been without the improvements.

Sue Berkowitz, executive director of the Appleseed Legal Justice Center, said it will put more money in the pockets of low- and moderate-income residents, while benefiting the environment.

"We've got people living in really deplorable conditions" paying exorbitant utility bills, she said.

Mollie Gore, spokeswoman for Santee Cooper, said the utility supports the measure as another consumer option.

Nearly 700 people took out loans in 2009, averaging $6,800 each under its current program, at 1.25 percent interest, or nearly double the loans from 2008, she said.

"There is interest in getting help for improvements," she said. "The time is right. It's striking a chord with customers."