A Message from Rhode Island General Treasurer Seth Magaziner The Rhode Island Infrastructure Bank

By Rhode Island General Treasurer Seth Magaziner

In these difficult economic times, we who hold public office must commit ourselves to advancing new ideas that will put Rhode Islanders back to work.

With this in mind, our office has developed a common-sense proposal to establish the Rhode Island Infrastructure Bank. This plan, if enacted, will put hundreds of tradesmen and women back to work making our buildings more energy efficient. In addition to bringing much-needed construction jobs to our state, the Infrastructure Bank will help businesses, homeowners and municipalities save on utility costs.

I am very pleased that Governor Raimondo has included this infrastructure bank proposal in her economic package, and that the plan has earned the support of business, labor and environmental leaders across our state.

Rhode Island’s unemployment rate remains among the highest in the nation, and no sector of our workforce has been hit harder than the building and construction trades. Rhode Island lost approximately 8,000 constructions jobs during the depths of the recession, and has since gained back less than one quarter of the construction jobs lost.

At the same time, Rhode Island businesses and families remain burdened by high energy costs. As of January, the average cost of electricity for commercial users in Rhode Island was the second highest of any state, and a whopping 73% higher than the national average. Rhode Island’s average electricity price for residential users was also among the highest in the country, and 46% above than the national average. High energy costs also weigh on Rhode Islanders indirectly, through taxes: the Office of Energy Resources estimates that Rhode Island municipalities spend more than $50 million annually, just to keep the lights on.

The Rhode Island Infrastructure Bank will address both our high unemployment and our high energy costs by putting people back to work making our buildings more energy efficient.

Building on the strong track record of the Clean Water Finance Agency, which helps cities and towns fund storm water, drinking water, and road and bridge projects, our proposal will rename this agency the Rhode Island Infrastructure Bank (it already funds more than just water projects) and add new programs devoted to improving our state’s energy efficiency.

The first new program will fund energy retrofits for public buildings. By taking advantage federal funds for energy efficiency projects, to which Rhode Island is entitled but has not used, we will be able to establish this program at a minimal cost to the state. An extensive energy retrofit to a building can provide energy savings as high as 20-30%, and every dollar a municipality saves on energy costs can be redirected to fixing roads, improving education or providing tax relief for hard working Rhode Islanders.

In addition to a retrofit program for public buildings, the Rhode Island Infrastructure Bank will administer a new energy efficiency program for commercial and residential property owners as well. We propose using the Property Assessed Clean Energy (PACE) model, which has been successfully financing energy efficiency projects in other states for years.

Under the PACE model, Rhode Islanders will be able to access affordable bank loans for energy efficiency upgrades to their buildings that will allow them to realize net energy savings right away. Should the building change hands, the new owner, who will assume the benefits of the lower energy costs, will also assume responsibility for the loan. This is a simple concept that has been implemented in many states, but not yet in Rhode Island. PACE relies primarily on private capital from banks, with minimal taxpayer cost.

The Connecticut Green Bank has been facilitating more than $20 million of PACE loans to commercial property owners annually since the inception of their program. PACE is working there, and Rhode Islanders deserve no less.

We cannot wait any longer to take bold action that will put Rhode Islanders back to work and repair our economy. The Rhode Island Infrastructure Bank will do exactly that. This proposal is based on proven models from other states, will be funded almost entirely by private capital and federal funds, and will put hundreds of people to work, while helping Rhode Island save millions on energy costs. Let’s get started.

Seth Magaziner is General Treasurer of Rhode Island,having taken office in January of this year.

 

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