Indianapolis’ Neighborhood Sweeps and
Superbowl Legacy Retrofit Ramp Up
Project
Indianapolis’ Neighborhood Sweeps, the first stage of its Superbowl Legacy Retrofit Project, is targeting
its Near Eastside neighborhood to kick start its residential energy efficiency upgrade program. The Near
Eastside is a lower income community with a rich history and tight social networks. The City
Indianapolis’ Sustainability Office is partnering with community organizations to promote energy
efficiency. The Near Eastside Community Organization (NESCO), a prominent community organization
founded in the early 1970s, will direct Americorps Public Allies in promoting the program to
neighborhood residents. Residents, businesses, and non-profits will be offered free simple
weatherization and HVAC upgrades. Indianapolis is initiating an on-bill repayment system to finance
residential energy upgrades, designed specifically for those with lower incomes or lower credit ratings;
residents partaking in the Neighborhood Sweeps program will be offered the opportunity to finance
more comprehensive retrofits. The financing program will ultimately be offered throughout the City.
Engaging Communities
John Hazlett, Program Manager at the Indianapolis’ Office of Sustainability noted how important
working with existing neighborhood institutions is to successful energy efficiency programs. “Our
greatest lesson has been the importance of partnering with trusted neighborhood organizations, like
NESCO.” While many residents in the Near Eastside are wary of City programs, they trust NESCO.
Moreover, NESCO has served as a valuable communications consultant to the City and Americorps
volunteers, coaching them in what sorts of messages work best with community members. A focus on
home comfort has proven to be a popular message for residents.
Financing for Residents with Lower Credit Ratings
The City has partnered with the Indianapolis Neighborhood Housing Partnership (INHP), Indianapolis
Power and Light, and Citizens Gas, to develop accessible energy upgrade loans to be repaid on utility
bills. Originally, the City intended to institute a Revolving Loan system to supply financing for retrofits.
They soon realized they did not have the internal capacity to properly originate and service loans. INHP
is a well-established Community Development Financial Institution, with a history of working in the Near
Eastside. The City and INHP decided to partner, making the INHP the administrator of the loan program.
Instead of adopting a revolving loan fund, the City would invest its grant money in a Loan Loss Reserve.
Indianapolis prioritized making its lending accessible to those with lower credit ratings. They developed
a two tier lending program, summarized in the table below.
Terms
$1-4k
1 yr/thousand $
$4-15k
10 yrs
[INTEREST RATES?!?]
Tier 1
Tier 2
Underwriting
580 FICO score
Security
Unsecured
615 FICO score
Secured [WITH WHAT?
SHIT]
The INHP has used the provision of the Loan Loss Reserve to leverage private investment in these loans.
A Loan Loss Reserve of $3 million has been established. Both unsecured and secured loans are covered
by the loan loss reserve. Private lenders will be covered for the full value of their portfolio in default, up
to the $3 million reserve. This full security has leverage $6 million in private investment. The City feel
happy with this ratio of private investment to loan loss reserve. However, it does suggest that banks
anticipate default rates could be 50%, given that they will be made whole if their loans default and a
loan loss reserve of $3 million. This suggests banks have very little faith in unsecured energy efficiency
upgrade lending to those with poorer credit ratings (or that interest rates are really cheap).
On Bill Repayment
The City and the participating utilities agreed to feature an on-bill repayment mechanism as part of their
application to the BetterBuildings program. The City hopes that initiating this on-bill system will allow its
utilities to gain some experience in on-bill financing mechanisms; ultimately, the utilities may initiate
their on-bill systems, potentially using utility funding as seed money for a loan loss reserve or revolving
fund. City staff cited two major concerns from utilities in initiating on-bill systems:


There have been bill system and IT challenges. Databases have needed to be aligned on
between the loan servicing INHP and utilities. Likewise, protocols for transferring funds from the
utility to INHP were challenging to establish. These systems have largely been implemented.
Aligning systems was an administrative and technical burden, but was not prohibitively difficult.
Both IPL and Citizen Gas have been adamant that measures resulting in savings of electricity not
be financed on the gas bill, and vice-versa. This means every resident will have two on-bill
finance repayments, one for electricity saving devices, the other for gas. The City and the two
utilities are still in negotiations over how to divide the loan repayments in cases of upgrade
measures that save both gas and electricity. It seems likely that utilities do not want customers
to see a rise on their commodity’s bill stemming from financing for the other commodity. It may
be that utilities do not want to lose credit for Demand Side Management Activities.
As the repayments were not connected to the meter and the utility are only serving as conduits for the
loan, the City nor utilities have not had to meaningfully engage utility regulators. Association with the
meter would have necessitated a Tariff Filing. Likewise, a utility administered program would require
regulator approval.
Political Leadership
Mayor Gregory Ballard has championed greater foresight and in how Indianapolis operates. He was
instrumental in the formation of the Office of Sustainability, which now administers municipal and
community energy efficiency programs, as well as green infrastructure, bike lane implementation, public
education around waste management, and other services. Mayor Ballard understands that energy prices
in the Midwest will be rising, and aims to build programs now that can insulate community members
from future price increases, as well as reduce environmental impacts.