A bill creating a low-interest loan program for homeowners wanting to improve or replace their home heating systems is making its way through the Alaska House of Representatives.
Sponsored by Rep. Tammie Wilson, R-North Pole, House Bill 35 would provide homeowners with an opportunity to receive a maximum, one-time loan of $15,000 to be repaid over 10 years at 1 percent interest.
Now that natural gas is headed toward the southern Kenai Peninsula, passage of the bill could benefit area residents.
The Homer City Council expressed support for the legislation at its Feb. 10 meeting by passing Resolution 13-019, sponsored by David Lewis, Bryan Zak and Beau Burgess. The resolution noted “the expense of conversion will keep many households from being able to realize the positive benefits of natural gas as a fuel source” and that the loan’s low-interest rate and favorable terms would “allow many Alaskans to be able to take advantage of the program.”
Katie Koester, the city of Homer’s community and economic development coordinator, said HB 35 is being monitored by the city’s lobbyist and will be a topic of discussion when she and Homer Mayor Beth Wythe travel to Juneau next week.
“A lot of people have expressed concern of not being able to afford converting to natural gas. ... This is a mechanism for them to experience the savings,” said Koester.
“And once they experience the savings, they can pay back the loan and start putting those dollars toward other needs,” she said
Bill Smith and Mako Haggerty, who represent Homer and the southern peninsula on the Kenai Peninsula Borough Assembly, recently returned from Juneau.
“I’m pretty happy to see (HB 35) moving forward,” said Smith.
Haggerty also expressed interest in the legislation.
“It seems like it would play right into this whole natural gas (system),” said Haggerty of the trunk line and distribution systems that will bring natural gas from Anchor Point to the residents of Homer and Kachemak City.
Wilson introduced a similar bill last year, House Bill 312; however, it never made it to the floor for a vote. Since filing HB 35, Wilson has been contacted by communities and groups across the state. Among those supporting the legislation is the Alaska Commission on Aging.
“Many low-income seniors do not have the cash reserves to afford the purchase and installation of a new, energy efficient heating system,” wrote Paula Pawlowski, commission chair, and Denise Daniello, the commission’s executive director. “HB 35 provides an affordable means for all Alaskans to purchase heating systems to address escalating heating costs.”
Wilson is aware that upgrading or converting heating systems can be expensive.
“Sometimes we forget it’s great when we get these resources, but there’s an enormous cost to homeowners who are barely making it,” said Wilson. “We won’t want to put people into more debt. We want to free people up.”
Under House Bill 35, homeowners would qualify for the loan by having an inspection performed by an energy rater or a registered mechanical contractor who would:
■ Perform an on-site inspection of the home;
■ Determine whether improving or replacing the home’s primary heating system would increase energy efficiency in the home; and
■ Provide the homeowner with an estimate of the cost savings and change in energy efficiency as a result of the improvement or replacement.
To be eligible, the home must be “a substantially complete, owner-occupied, single-family dwelling or duplex used as a permanent residence by the loan applicant and located within the state.” The home would not be eligible if it was to be destroyed, abandoned or converted to another use within a year of the inspection; a fuel source for the improved or replaced system was not available; a previous loan under this program had been received; or more than 25 percent of the gross floor area of the home was used commercially.
The loan, if awarded, would have an interest rate of 1 percent, be repaid over a 10-year period, is not subject to income limitations and may not exceed the lesser of either the cost of the improvement or replacement, or $15,000.
Louie Flora, assistant to Rep. Paul Seaton, R-Homer, said Seaton’s office has been tracking the progress of HB 35. “The city of Homer has contacted us to relay their support for it,” said Flora.
He recommended anyone interested in the bill send emails or letters to the House Finance Committee members. “They’re the ones to make the next decision on it. That’s where you’ll want to weigh in.”