Senate Approves On-Bill Financing Pilot Program

November 7, 2011

Last week, the U.S. Senate approved an appropriations “minibus” bill for FY 2012 that would fund through Sept. 30, 2012 the departments of Agriculture, Commerce, Transportation, Housing and Urban Development, and other more targeted science and related programs. The spending bill, H.R. 2112, includes language to set aside $1,000,000 of non-disaster funds to the Economic Development Administration for an on-bill financing pilot program.

On-bill financing (OBF) is a utility-based method for financing energy-efficiency improvements that requires no upfront capital from the small business. Typically, a utility pays the upfront costs for the energy-efficiency investments and provides both incentives and zero-interest financing. Repayment is based on estimated monthly energy savings; and the small business “shares” the savings with the utility until the loan is repaid. OBF programs currently are only available in a handful of states.

The amendment, S.AMDT.816, was offered by Sen. Bernie Sanders (I-Vt.) who has been very supportive of the program and recently held a hearing of the Senate Committee on Environment and Public Works Subcommittee—of which he serves as chair—dedicated to OBF. During that hearing, NSBA Senior Director of Government Affairs, Kyle Kempf testified in favor of expanding OBF programs.

NSBA has been very supportive of the OBF programs and in 2009, released the report, “On-Bill Financing: Helping Small Business Reduce Emissions and Energy Use While Improving Profitability,” which was produced with funding from the Bipartisan Policy Center.

H.R. 2112 was initially passed by the House in June. It then went to the Senate where various amendments were added and it was approved on Nov. 1. The bill now goes to conference committee where conferees will work to come to a consensus both the House and Senate can accept.

S.AMDT. 816 was approved by the Senate by unanimous consent. Sen. Sanders and his staff are working to ensure the OBF amendment remains in the final bill, and have indicated he plans to also offer a stand-alone bill if needed.