California regulators want to expand a pilot program under which utilities offer interest-free loans to small businesses that want to buy energy-efficient gear, the Los Angeles Times reports.

The three big utilities that tried the program last year are on board to enlarge the effort. At least one will probably propose raising the cap for loans to small businesses to $100,000, from $50,000, and increasing the payback timetable to 10 years for loans to institutional customers such as cities and schools, said energy consultant Hank Ryan, who is credited with bringing a successful Connecticut program to California that lets customers make loan payments through their utility bills.

Southern California Edison wants to boost its loan fund, which was about $2.5 million last year.

“We’ll be increasing it many, many times over,” said Gene Rodrigues, director of energy efficiency for the Rosemead-based utility. Edison plans to bring in third parties that offer financing as well as efficient technologies, such as equipment vendors or manufacturers with loan programs.

The goal is to help small firms buy new equipment that is so efficient the energy savings will cover the monthly loan payments. Small businesses were attracted to the pilots launched last year because they required only a good payment record with the utility.

In its October opinion covering how utilities should address energy savings goals for 2009-2011, the Public Utilities Commission directed all utilities to create or continue on-bill financing pilot programs for small commercial customers. It asked for a proposal for on-bill financing programs for institutional customers and for continued investigation of programs for other sectors such as residential customers.

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