Coaxing owner, tenant to save fuel

Bostonians, like other Americans, know this is no time to sit around and wait for Washington to crank out a new national energy-saving program.

So in two separate instances, people in the Boston area have banded together to convince banks to provide low-interest loans for homeowners and landlords to conserve energy.

One nonprofit organization has set up a plan that coaxes landlords and tenants to conserve energy in apartment buildings -- using ''rebates'' from the lending bank and other incentives.

Another group, taking aim at fuel bills that take huge bites out of homeowners' monthly budgets, has talked three banks into providing energy-conservation loans at 5 percent below market rate.

The common denominator: Both local groups forge a partnership between government and banks, making possible low-interest loans to save energy.

Actually, the federal government already has acted to spur the interest of banks in such agreements. A powerful incentive for banks - apart from the obvious public relations value -- is the Community Reinvestment Act, a 1977 federal law that requires them to meet credit needs in the communities they serve. Bank requests to merge or open a new branch have been denied on the basis of not fulfilling the demands of this act.

But when the Citizen's Conservation Corporation (CCC), an nonprofit group based in Boston, wanted to spur energy conservation in multifamily housing, it had to promote yet another kind of cooperation: between tenant and landlord.

The CCC project provides a tenant rebate that gives a direct incentive to apartment dwellers to save energy. Although homeowners want to cut their monthly fuel bills, landlords are often tempted to simply pass on spiraling fuel costs to renters, and tenants have little interest in weatherizing buildings they don't own.

For the landlord, the program is designed so that his annual costs during the length of the loan -- including his fuel costs -- won't exceed what he would have spent on fuel alone. Then, after the loan has been repaid, the landlord has both lower fuel costs and a more-valuable, energy-efficient building.

This is how the plan works: CCC energy consultants perform an energy audit on the building to determine what weatherization is needed. The bank, in this case the Shawmut Bank of Boston, checks the building owner's credit. If eligible, the owner is loaned the money for energy-saving improvements at five points below the going rate of 18 percent for a home improvement loan. CCC guarantees the loan and contracts out for the work, which might include insulation, caulking, storm windows, and new or improved fuel burners. Every month the bank collects a payment from the landlord that include three elements: (1) it pays off part of the landlord's loan; (2) it pays the fuel bill; (3) it pays rebates to tenants based on their fuel savings -- the more they save, the bigger the rebate.

The bank also helps to educate the landlord and his tenants on how to save fuel, says community investment officer Anne Crowley of the Shawmut Bank of Boston.

CCC used a $100,000 grant from its nonprofit parent organization, the Citizen's Energy Corporation (set up by Robert Kennedy's son, Joseph Kennedy II) , plus a $312,000 grant from Chevron to cover start-up costs. CCC general manager Steven Rothstein says the program has about 50 buildings under way in the Boston area now, and has plans to expand to three other Massachusetts cities.

Meanwhile, in the Boston suburb of Newton, Mass., an Energy Savers Loan Program sprang from energy information ''parties'' held last year by members of the Newton Citizens Commission on Energy at which an energy auditor gave talks and slide shows. Some 1,500 families took part.

With interest piqued, a commission subgroup next set out to find low-cost loans to help finance energy-saving improvements.

Both the city treasurer and the Chamber of Commerce helped set up meetings with local bankers. The upshot: Three of the eight local savings institutions have committed a total of $250,000 to loan out at five points below the going FHA rate.

Commission vice-president Barbara Kopans claims that not only can residents pay for the $1,000-$2,000 loans out of the monthly savings on fuel, but the interest paid on the loan can be deducted from federal taxes. An energy tax credit also can be claimed.