Wisconsin adds electric vehicle charging infrastructure, microgrids and resiliency upgrades to PACE – Energy and Natural Resources


United States: Wisconsin adds electric vehicle charging infrastructure, microgrids and resiliency upgrades to PACE

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The State of Wisconsin passed a series of amendments to its PACE Law (Wis. Stat. § 66.0627(8)) on March 14, 2022 through Wisconsin Law 175 of 2021 (the “Law”).1 The law was the only major clean energy bill that passed in the 2021-2022 legislative session in Wisconsin, and it made some key modernizations to the Wisconsin PACE Act summarized as follows:

  • Eligible measures: The law widened the series of improvements to real estate eligible for PACE financing. These extensions include the following:
    • Reliability improvements such as energy storage, backup power generation, or microgrid improvements;

    • improvements in electric vehicle infrastructure;

    • Resilience improvements that increase resiliency or improve infrastructure durability, including storm, wind fire and flood resiliency measures (provided that if a floodplain zoning ordinance applies to the property in issue and the building is non-compliant, improvements must bring the property into compliance, and if the local municipality participates in the National Flood Insurance Program, the owner obtains the required flood insurance); and

    • Stormwater control measures, which include structural or non-structural measures designed to mitigate stormwater runoff (such as green roofs, infiltration systems, constructed wetlands, and swales, but do not include barrels rain).


  • Link: The amendments clarified that the PACE special charge applies to land (and still has the same priority as a special assessment lien in Wisconsin). The PACE special charge privilege, however, remains a spring-loaded privilege, triggered in the event of delinquency.

  • Duration: PACE funding cannot now exceed 30 years.

  • Extension of Private Enforcement Rights: The law now specifies that foreclosure of a PACE Special Charge must occur through the in rem procedures set out in Wis. Stat. § 75.521 (which the vast majority of Wisconsin PACE funding agreements and/or orders already specify). (This in rem The procedure was previously an alternative to the Tax Deed and Certificate Sale procedure which is now only available for non-PACE special delinquencies.) In addition, the law clarified that a county may delegate to a third party deprived of the “right to make a judgment” to a package subject to in rem foreclosure process using the pre-existing assignment procedures set forth in Wis. Stat. § 75.106 (subject to certain exceptions to simplify assignment and ignore certain procedures applicable only to environmentally polluted properties).

  • Energy assessment in lieu of a savings guarantee: The law eliminated the prior requirement that PACE loans over $250,000 required the borrower to obtain an energy savings guarantee from a contractor or an engineer for a savings/investment ratio greater than 1.0. In its place, the law now requires that for improvements in energy efficiency, reliability or water efficiency, the borrower obtains an assessment of the expected monetary savings or, in the case of a renewable energy, the monetary benefit expected from the production of energy. This requirement does not apply to an EV charger, resiliency, customer-side water service line replacement (which the law also allows for funding through PACE), or stormwater control measures.

  • Consent of Mortgage Holder: The law now makes explicit the requirement that the consent of all mortgage holders on the premises consent to PACE funding as a condition of entering into the PACE loan agreement. Lender consent has been a de facto requirement for PACE financings in Wisconsin in light of pre-existing program requirements. This statutory amendment simply makes it a legal requirement.

With a record-breaking 2021 year for PACE in Wisconsin, resulting in more than 21 C-PACE transactions representing $53,212,264 in direct clean energy and energy efficiency funding in Wisconsin, changes to the Wisconsin PACE Act represented by law should act as an additional catalyst for the growth of clean energy funding in the state. Foley has an active PACE practice in Wisconsin and in all major PACE markets nationwide. We are well placed to help you with your PACE funding or the development of your PACE program.


Footnote


1 For more information on PACE and the application suite for PACE grants, see Foley’s article on the same available here.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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