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30th Legislature(2017-2018)

Bill Text 30th Legislature


00 Enrolled HB 374                                                                                                         
01 Relating to on-bill financing by a utility for certain energy efficiency and conservation                               
02 improvements.                                                                                                           
03                           _______________                                                                               
04    * Section 1. AS 42.05 is amended by adding new sections to read:                                                     
05    Article 8A. On-Bill Financing of Energy Efficiency and Conservation Improvements.                                    
06 Sec. 42.05.750. On-bill financing of energy efficiency and conservation                                                 
07 improvements; authorization and eligibility. (a) A utility may enter into a written                                     
08 on-bill financing agreement with a customer to finance the purchase and installation of                                 
09 a renewable energy system, energy efficiency device, energy storage device, or energy                                   
10       conservation system in a residence or building that is eligible under (b) of this section                         
11       by assessing a meter conservation charge on the customer's utility bill.                                          
12            (b)  A residence or building is eligible for on-bill financing under (a) of this                             
13       section if, at the time the financing agreement is entered into, the residence or building                        
14                 (1)  is occupied or in use; and                                                                         
01                 (2)  is not under initial construction.                                                                 
02 (c)  An on-bill financing agreement must clearly state the interest rate to be                                          
03 charged for financing the purchase and installation of the renewable energy system,                                     
04 energy efficiency device, energy storage device, or energy conservation system. The                                     
05       interest shall be set at a rate that is fixed over the term of the agreement.                                     
06 (d)  An on-bill financing agreement is not valid under this section unless the                                          
07 utility has offered the customer in writing the option of purchasing a repair and                                       
08 maintenance agreement for the renewable energy system, energy efficiency device,                                        
09 energy storage device, or energy conservation system before the purchase and                                            
10 installation of the system or device. A repair and maintenance agreement under this                                     
11       section must                                                                                                      
12 (1)  be for a term of not less than the duration of the on-bill financing                                               
13       agreement;                                                                                                        
14 (2)  benefit the customer and any subsequent owner of the residence or                                                  
15 building from whom the utility may recover the costs under the on-bill financing                                        
16       agreement under AS 42.05.753;                                                                                     
17 (3)  for a fixed periodic fee, maintain the original function and                                                       
18 performance of the renewable energy system, energy efficiency device, energy storage                                    
19       device, or energy conservation system.                                                                            
20 (e)  A customer may decline to purchase a repair and maintenance agreement                                              
21 described under (d) of this section only if the customer enters into an agreement in                                    
22 writing with the utility to pay the balance of the on-bill financing agreement before                                   
23 transferring ownership of the residence or building. At the time of transfer of                                         
24 ownership, the subsequent owner may waive the requirement that the customer pay the                                     
25 balance of the on-bill financing agreement by notifying the utility in writing that the                                 
26       subsequent owner assumes the balance owed on the on-bill financing agreement.                                     
27 (f)  The balance owed on an on-bill financing agreement may be paid in full at                                          
28       any time without penalty.                                                                                         
29 (g)  Nothing in this section requires a utility to enter into an on-bill financing                                      
30       agreement with a specific customer or for a specific device or system.                                            
31 Sec. 42.05.751. Meter conservation charge. (a) A meter conservation charge                                              
01       assessed under AS 42.05.750(a) may only be used to recover the                                                    
02 (1)  actual costs incurred by the utility for the purchase, installation,                                               
03 and financing of the renewable energy system, energy efficiency device, energy                                          
04 storage device, or energy conservation system, including the administrative costs of                                    
05       the on-bill financing agreement and the cost of filing notice under AS 42.05.752;                                 
06                 (2)  repayment of costs incurred by a third party that has performed a                                  
07       function under AS 42.05.755; and                                                                                  
08                 (3)  periodic fee for a repair and maintenance agreement under                                          
09       AS 42.05.750(d).                                                                                                  
10            (b)  A utility may assess a meter conservation charge on                                                     
11                 (1)  the customer who entered into the on-bill financing agreement; or                                  
12 (2)  a subsequent owner of the residence or building under                                                              
13       AS 42.05.753.                                                                                                     
14 (c)  A meter conservation charge must be shown as a separate line item on a                                             
15       customer's bill.                                                                                                  
16 (d)  A utility may treat a customer's failure to pay a meter conservation charge                                        
17 as a failure to pay the utility account, and the utility may disconnect the utility service                             
18 for nonpayment of the meter conservation charge, if the utility complies with                                           
19 AS 42.05.381(c), AS 42.20.040, and any other applicable law. A utility may not                                          
20 remove a renewable energy system, energy efficiency device, energy storage device,                                      
21 or energy conservation system for failure to pay a meter conservation charge or when                                    
22       disconnecting service for failure to pay a meter conservation charge.                                             
23 (e)  Money collected by a utility as a meter conservation charge is not revenue                                         
24       subject to state taxes under AS 43.20.                                                                            
25 (f)  The billing and collection of a meter conservation charge does not subject a                                       
26 utility to the laws that regulate financial institutions, escrow depositories, or collection                            
27 agencies. A utility is not responsible for a lending, underwriting, or credit                                           
28       determination for an on-bill financing agreement.                                                                 
29 Sec. 42.05.752. Notice of on-bill financing agreement and meter                                                         
30 conservation charge. (a) A utility that enters into an on-bill financing agreement shall                                
31 file notice of the on-bill financing agreement and related meter conservation charge in                                 
01 the recording district in which the residence or building subject to the agreement is                                   
02 located. Notice under this subsection does not constitute a lien on the property, but is                                
03 intended to give an owner of the residence or building notice that the residence or                                     
04 building is subject to a meter conservation charge. Notice is considered given if it is                                 
05 sufficient to disclose to prospective owners the existence of the meter conservation                                    
06 charge, including the balance owed under the on-bill financing agreement, whether the                                   
07 system or device is covered by a repair and maintenance agreement described in                                          
08 AS 42.05.750(d), and the length of time the meter conservation charge is expected to                                    
09       remain in effect.                                                                                                 
10 (b)  A utility shall file notice of satisfaction when an on-bill financing                                              
11 agreement is paid in full. Notice of satisfaction shall be filed in the recording district                              
12       in which the residence or building subject to the agreement is located.                                           
13 Sec. 42.05.753. Transferability of on-bill financing balances to subsequent                                             
14 owners. A utility that enters into an on-bill financing agreement may recover the                                       
15 balance of the costs allowed under the agreement from a subsequent owner of the                                         
16 residence or building in which the renewable energy system, energy efficiency device,                                   
17 energy storage device, or energy conservation system was installed if the utility gives                                 
18       notice under AS 42.05.752 that the residence or building is subject to the agreement.                             
19 Sec. 42.05.754. Rental property. A utility may recover the costs under an on-                                           
20 bill financing agreement for a rental property by assessing a meter conservation charge                                 
21 on a utility bill only if the landlord is responsible for the entire utility bill, including                            
22       the meter conservation charge.                                                                                    
23 Sec. 42.05.755. Third parties; contracting and liability. (a) A utility may                                             
24 contract with a third party to perform functions permitted under AS 42.05.750 -                                         
25 42.05.754, including financing the purchase and installation costs for a renewable                                      
26 energy system, energy efficiency device, energy storage device, or energy                                               
27       conservation system. The third party shall comply with AS 42.05.750 - 42.05.754.                                  
28 (b)  If the installation, operation, or maintenance of a renewable energy system,                                       
29 energy efficiency device, energy storage device, or energy conservation system is                                       
30       performed by a third party,                                                                                       
31 (1)  the utility is not liable for the installation, operation, or                                                      
01       maintenance of the renewable energy system, energy efficiency device, energy storage                              
02       device, or energy conservation system;                                                                            
03                 (2)  the utility may not provide, nor is there implied, a warranty of                                   
04       merchantability or fitness of the renewable energy system, energy efficiency device,                              
05       energy storage device, or energy conservation system; and                                                         
06                 (3)  no action may be brought against the utility related to the failure of                             
07       the renewable energy system, energy efficiency device, energy storage device, or                                  
08       energy conservation system.                                                                                       
09            (c)  When a utility contracts with a third party to perform administrative or                                
10       financing functions,                                                                                              
11 (1)  the third party is not liable for the installation, operation, or                                                  
12 maintenance of the renewable energy system, energy efficiency device, energy storage                                    
13       device, or energy conservation system;                                                                            
14 (2)  the third party may not provide, nor is there implied, a warranty of                                               
15 merchantability or fitness of the renewable energy system, energy efficiency device,                                    
16       energy storage device, or energy conservation system; and                                                         
17 (3)  no action may be brought against the third party related to the                                                    
18 failure of the renewable energy system, energy efficiency device, energy storage                                        
19       device, or energy conservation system.                                                                            
20 (d)  The provisions of (b) and (c) of this section may not be construed to impair                                       
21 the rights and remedies of a utility customer against any other parties to a transaction                                
22 involving the purchase or installation of a renewable energy system, energy efficiency                                  
23       device, energy storage device, or energy conservation system.                                                     
24            Sec. 42.05.756. Definitions. In AS 42.05.750 - 42.05.756,                                                    
25 (1)  "energy conservation system" includes a fuel-switching system; in                                                  
26 this paragraph, "fuel-switching" means the replacement of existing fuel-consuming                                       
27 equipment using a particular fuel with equipment that uses another fuel that does not                                   
28       increase greenhouse gas emissions and that                                                                        
29                      (A)  is more fuel efficient; or                                                                    
30                      (B)  results in lower fuel expenses;                                                               
31 (2)  "meter conservation charge" means a charge placed on a customer's                                                  
01       utility bill by a utility to recover costs under an on-bill financing agreement;                                  
02                 (3)  "on-bill financing agreement" means an agreement entered into                                      
03       under AS 42.05.750.                                                                                               
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