Stay Lifted; Energy Commission Moved Forward With Power Upgrade Plan

The California Energy Commission plans to implement a proposed energy upgrade program after an appellate court lifted a restraining order that prevented the agency from distributing $33 million in federal funds.

Commissioners scheduled a hearing today to approve contracts that would implement the Energy Upgrade California Program. That $33 million plan contains, among other provisions, a PACE-like program that falls outside the scope of the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac.

According to federal rules, the money had to be encumbered by the end of today, although the Department of Energy had made it clear it would not immediately rescind the money.

The Federal Housing Finance Agency had recommended against PACE programs, which use property tax assessments to finance energy upgrades on homes and commercial property. The agency believed PACE obligations would be placed ahead of mortgage loans if the owner defaults.

Fresno and Kern counties were part of a PACE pilot program that was put on hold after the Housing Finance Agency issued its "guidance" and after Western Riverside Council of Governments filed a lawsuit claiming its energy-efficiency program was ignored when $33 million in federal funding was distributed.

The California Energy Commission said the council's $20 million bid was disqualified because it ignored energy-efficiency provisions.

Today, an appellate judge lifted a temporary restraining order imposed by a Riverside County judge in connection with the lawsuit. The restraining order had prevented the CEC from spending the remaining $33 million in federal stimulus funds. No comment yet from representatives of Western Riverside.

The appellate court also canceled a Nov. 4 hearing on a possible contempt charge the Riverside County judge imposed against the Energy Commission. Western Riverside County Council of Governments continued to oppose the Energy Commission programs even though the Federal Housing Finance Agency action had effectively suspended its own PACE program.