CSHB 374(ENE): "An Act relating to on-bill financing by an electric or gas distribution utility for certain energy efficiency and conservation improvements."
00 CS FOR HOUSE BILL NO. 374(ENE) 01 "An Act relating to on-bill financing by an electric or gas distribution utility for certain 02 energy efficiency and conservation improvements." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 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) An electric or gas distribution 08 utility may enter into a written on-bill financing agreement with a customer or 09 landlord of a customer to finance the purchase and installation of a renewable energy 10 system, energy efficiency device, energy storage device, or energy conservation 11 system in a residence or building that is eligible under (b) of this section by assessing 12 a meter conservation charge on the customer's utility bill. The meter conservation 13 charge may only be used to recover the 14 (1) actual costs incurred by the utility for the purchase, installation,
01 and financing of the renewable energy system, energy efficiency device, energy 02 storage device, or energy conservation system, including the administrative costs of 03 the on-bill financing agreement and the cost of filing notice under AS 42.05.752; and 04 (2) repayment of costs incurred by a third party that has performed a 05 function under AS 42.05.755. 06 (b) A residence or building is eligible for on-bill financing under (a) of this 07 section if, at the time the financing agreement is entered into, the residence or building 08 (1) is occupied or in use; and 09 (2) is not under initial construction. 10 (c) An on-bill financing agreement must clearly state the interest rate to be 11 charged for financing the purchase and installation of the renewable energy system, 12 energy efficiency device, energy storage device, or energy conservation system. The 13 interest shall be set at a rate that is fixed over the term of the agreement. 14 (d) The balance owed on an on-bill financing agreement may be paid in full at 15 any time without penalty. 16 Sec. 42.05.751. Meter conservation charge. (a) To recover its costs under an 17 on-bill financing agreement for a residence or building, an electric or gas distribution 18 utility may assess a meter conservation charge on 19 (1) the customer or landlord who entered into the on-bill financing 20 agreement; 21 (2) a subsequent purchaser of the residence or building under 22 AS 42.05.753; or 23 (3) a tenant or subsequent tenant of the residence or building under 24 AS 42.05.754. 25 (b) A meter conservation charge must be shown as a separate line item on a 26 customer's bill. 27 (c) A utility may treat a customer's failure to pay a meter conservation charge 28 as a failure to pay the electricity or gas account, and the utility may disconnect electric 29 or gas service for nonpayment of the meter conservation charge, if the utility complies 30 with AS 42.05.261, 42.05.381(c), AS 42.20.040, and any other applicable law. A 31 utility may not remove a renewable energy system, energy efficiency device, energy
01 storage device, or energy conservation system for failure to pay a meter conservation 02 charge or when disconnecting service for failure to pay a meter conservation charge. 03 (d) Money collected by a utility as a meter conservation charge is not revenue 04 subject to state taxes under AS 43.20. 05 (e) The billing and collection of a meter conservation charge does not subject 06 a utility to the laws that regulate financial institutions, escrow depositories, or 07 collection agencies. A utility is not responsible for a lending, underwriting, or credit 08 determination for an on-bill financing agreement. 09 Sec. 42.05.752. Notice of on-bill financing agreement and meter 10 conservation charge. (a) An electric or gas distribution utility that enters into an on- 11 bill financing agreement shall file notice of the on-bill financing agreement and related 12 meter conservation charge in the recording district in which the residence or building 13 subject to the agreement is located. Notice under this subsection does not constitute a 14 lien on the property, but is intended to give a purchaser of the residence or building 15 notice that the residence or building is subject to a meter conservation charge. Notice 16 is considered given if it is sufficient to disclose to prospective purchasers 17 (1) the existence of the meter conservation charge, including the 18 balance owed under the on-bill financing agreement and the length of time the meter 19 conservation charge is expected to remain in effect; and 20 (2) a purchaser's obligation to notify a tenant under AS 42.05.754 if 21 the purchaser leases the property. 22 (b) A utility shall file notice of satisfaction when an on-bill financing 23 agreement is paid in full. Notice of satisfaction shall be filed in the recording district 24 in which the residence or building subject to the agreement is located. 25 Sec. 42.05.753. Transferability of on-bill financing balances to subsequent 26 purchasers. An electric or gas distribution utility that enters into an on-bill financing 27 agreement may recover the balance of the costs allowed under the agreement from a 28 subsequent purchaser of the residence or building in which the renewable energy 29 system, energy efficiency device, energy storage device, or energy conservation 30 system was installed if the utility gives notice under AS 42.05.752 that the residence 31 or building is subject to the agreement.
01 Sec. 42.05.754. Rental property. (a) An electric or gas distribution utility may 02 recover the costs under an on-bill financing agreement for a rental property by 03 assessing a meter conservation charge on the tenant's utility bill only if the 04 (1) utility, landlord, and tenant agree to the charge in an agreement that 05 provides notice to the landlord of the requirements in (b) of this section; or 06 (2) tenant occupies a rental unit for which a meter conservation charge 07 was previously assessed on a former tenant's utility bill under (1) of this subsection to 08 recover the costs under an on-bill financing agreement. 09 (b) Before entering into a rental agreement with a tenant, a landlord shall give 10 the tenant written notice of a meter conservation charge that the tenant could be 11 subject to under (a)(2) of this section. If the landlord fails to give the required notice, 12 the tenant may, for not longer than one-half of the term of the rental agreement, deduct 13 the meter conservation charges paid by the tenant from rent paid. 14 (c) A utility may enter into an on-bill financing agreement with the tenant of a 15 rental property only if the landlord consents to the agreement. 16 Sec. 42.05.755. Third parties; contracting and liability. (a) An electric or 17 gas distribution utility may contract with a third party to perform functions permitted 18 under AS 42.05.750 - 42.05.754, including financing the purchase and installation 19 costs for a renewable energy system, energy efficiency device, energy storage device, 20 or energy conservation system. The third party shall comply with AS 42.05.750 - 21 42.05.754. 22 (b) If the installation, operation, or maintenance of a renewable energy system, 23 energy efficiency device, energy storage device, or energy conservation system is 24 performed by a third party, 25 (1) the utility is not liable for the installation, operation, or 26 maintenance of the renewable energy system, energy efficiency device, energy storage 27 device, or energy conservation system; 28 (2) the utility may not provide, nor is there implied, a warranty of 29 merchantability or fitness of the renewable energy system, energy efficiency device, 30 energy storage device, or energy conservation system; and 31 (3) no action may be brought against the utility related to the failure of
01 the renewable energy system, energy efficiency device, energy storage device, or 02 energy conservation system. 03 (c) When a utility contracts with a third party to perform administrative or 04 financing functions, 05 (1) the third party is not liable for the installation, operation, or 06 maintenance of the renewable energy system, energy efficiency device, energy storage 07 device, or energy conservation system; 08 (2) the third party may not provide, nor is there implied, a warranty of 09 merchantability or fitness of the renewable energy system, energy efficiency device, 10 energy storage device, or energy conservation system; and 11 (3) no action may be brought against the third party related to the 12 failure of the renewable energy system, energy efficiency device, energy storage 13 device, or energy conservation system. 14 (d) The provisions of (b) and (c) of this section may not be construed to impair 15 the rights and remedies of a utility customer or landlord of a utility customer against 16 any other parties to a transaction involving the purchase or installation of a renewable 17 energy system, energy efficiency device, energy storage device, or energy 18 conservation system. 19 Sec. 42.05.756. Definitions. In AS 42.05.750 - 42.05.756, 20 (1) "energy conservation system" includes a fuel-switching system; in 21 this paragraph, "fuel-switching" means the replacement of existing fuel consuming 22 equipment using a particular fuel with more efficient fuel consuming equipment that 23 uses another fuel but does not increase direct greenhouse gas emissions; 24 (2) "meter conservation charge" means a charge placed on a customer's 25 utility bill by which an electric or gas distribution utility recovers the 26 (A) costs of the purchase, installation, and financing of a 27 renewable energy system, energy efficiency device, energy storage device, or 28 energy conservation system; 29 (B) administrative costs of the on-bill financing agreement; 30 (C) cost of filing notice under AS 42.05.752; and 31 (D) repayment of costs incurred by a third party that has
01 performed a function under AS 42.05.755; 02 (3) "on-bill financing agreement" means an agreement entered into 03 under AS 42.05.750.