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“Good Jobs, Green Jobs” Explores Novel Financing For Energy Efficiency Upgrades

By Jamie Fine / Published: March 8, 2012

This commentary was originally posted on the EDF California Dream 2.0 Blog.

Increasing energy efficiency (EE) and renewable energy are two ideal ways to cut climate pollution. Yet financing for these types of projects is often limited.

California has proposed using on-bill repayment (OBR) to help close a financing gap for EE that some have estimated to exceed $10 billion annually. It would be the first statewide program of its kind in the country to use third-party financing to fund energy-related upgrades for any type of building.

The program allows private loans for building efficiency upgrades and renewable energy projects to be repaid through utility bills. Billions of dollars could be made available at attractive terms for a variety of buildings, including single-family homes where owners are upside down on their mortgages, small businesses, large commercial properties and multi-unit rental buildings.

At next week’s Good Jobs, Green Jobs Western Regional Conference in Los Angeles, a panel of experts will discuss how the program can make energy upgrades more affordable and create good, green jobs. This workshop will feature a description of OBR, provide a status update on regulatory developments, and consider program design tradeoffs.

The workshop, “On Bill Repayment Solves the Financing Puzzle,” will be hosted by Environmental Defense Fund (EDF) and moderated by our Chief California Economist, Jamie Fine. Brad Copithorne, EDF’s energy and policy specialist who designed the program will describe how it works and how energy users can take advantage of the program to save money on energy bills and hedge against higher energy prices.

Other panelists include: Gretchen Hardison, Environmental Affairs Officer, Los Angeles Department of Water and Power; John Rhow, Director, Barclays Capital; and Neil Alexander, Account Manager, Utility Solutions Group, TRANE. These experts will share their perspectives on the program, and how it can be designed to meet the unique needs of their constituencies.

EDF looks forward to hosting the panel and discussing ideal ways to shape the final program. We are expecting California’s Public Utilities Commission to soon decide whether to offer OBR to all utility customers as a way to reduce energy use, grow the economy and protect public health and our environment.

Also posted in Energy Efficiency, Jobs, On-bill repayment / Tagged OBR | Read 1 Response

A Triple Bottom Line for the Central Valley: Environment, Economy, Equity

By Jorge Madrid / Published: February 21, 2012

This week the Air Resources Board (ARB) held a public workshop in Fresno, California, to gather public input on ways to invest proceeds from California’s cap-and-trade auction. ARB heard from a wide variety of individuals and organizations with bright ideas on how to spend this money on projects that can lower greenhouse gases (GHG) and maximize the benefit to disadvantaged communities who are the most vulnerable to climate change and pollution impacts.

I represented EDF at the workshop, and an extended version of my public comments follows:

Also posted in Cap and Trade, Clean Energy, Energy Efficiency, General, Renewable Energy, State / Comments are closed

California Finds Common Interests In Financing Energy Efficiency Upgrades

By Brad Copithorne / Published: February 14, 2012

This commentary was originally posted on the EDF California Dream 2.0 Blog.

OBR Moves Forward

Last week, the California Public Utilities Commission (“CPUC”) held a well-attended three-day workshop to discuss a potential On-Bill Repayment (“OBR”) program and other statewide financing solutions for energy efficiency upgrades.

We thought it would be helpful to highlight some of the key takeaways:

The Funding Gap is Large – Jeanne Clinton of the CPUC used charts to show that the annual need for energy efficiency upgrades in California exceeds $10 billion but that current ratepayer spending was about $1 billion. In this economic environment, it is unlikely that ratepayers or taxpayers will make up the difference. EDF believes that addressing this gap will require active engagement from a wide variety of investors ranging from large banks to local institutions. Additionally, demand generation must come from a variety of sources ranging from the largest contractors and Energy Service Companies (ESCOs), home improvement retailers and appliance retailers down to the smallest contractors. Fortunately, the workshops drew participants from all of these groups. Wells Fargo, Deutsche Bank, Citi, Trane and SolarCity were among the attendees, each of which committed multiple person-days to the proceedings.

Setting a Goal – Cisco Devries of Renewable Funding identified the auto loan market might provide some attractive benchmarks for energy efficiency lending offerings.. Auto loans are offered by a number of financial institutions, are usually originated seamlessly in the dealer’s office and are currently available at a rate of 3.7% for five-year loans. Cisco said that much of the low cost is driven by standardization and the ability of banks to finance large pools of loans in the capital markets. EDF, however, hopes that an OBR program would offer better consumer protections than the auto loan market.

Publically Funded Credit Enhancements are a Good First Step – Christine Solich of the California Treasurer’s office and Angie Hacker of Santa Barbara each discussed how they have been able to entice local credit unions to participate in energy efficiency lending programs through loan loss reserves ranging from 5-15%. Alfred Griffin of Citi explained that banks would either need a much larger reserve (possibly more than 30%) or 10+ years of loan performance data in order to satisfy the needs of rating agencies and institutional investors. On the other hand, Alfred said that the California OBR proposal would likely provide sufficient data because it uses utility bill payment records that go back for decades..This opportunity, however, would not be available for an OBR program that did not use all of a utility’s standard collection procedures for delinquent payments.

OBR can Work – The utilities raised numerous legal concerns while consumer advocates questioned whether residential customers would be adequately protected. Proponents of the OBR program heard these concerns and can only support it if it doesn’t expose utilities to significant increased liability or provide adequate consumer protection. Fortunately, Jeff Pitkin of New York discussed how his state has managed to overcome these obstacles to establish an OBR program. From the perspective of the utilities and residential customers, the New York OBR program is virtually identical to the California proposal and we are hopeful that we can incorporate many of their best practices to address these problems. (The California OBR proposal differs from New York in that it is initially open to a broad range of lenders and investors and has a much broader range of projects, financing structures and building types.)

I had the opportunity to spend time with representatives from most of the key constituencies and believe that there is genuine interest in working together to provide a low-cost financing solution for Californians.

EDF is excited that large statewide contractors such as Trane and SolarCity were willing to take time out of their busy schedules to attend. These firms will need flexible, statewide solutions from leading financial institutions to finance their customers’ projects. We believe that an OBR program that fully benefits from utility bill collection policies will be able to meet their needs, increase investment in energy efficiency and create jobs for Californians.

Also posted in Energy Efficiency, On-bill repayment / Tagged OBR | Comments are closed

California’s On-Bill Repayment Program Takes Two Steps Forward

By Brad Copithorne / Published: February 7, 2012

This commentary was originally posted on the EDF California Dream 2.0 Blog.

Last month, the California Public Utilities Commission released for comment EDF’s proposal to create the first statewide on-bill repayment (OBR) program that pays for energy efficiency and renewable energy upgrades for residential and commercial properties using third-party financing. The proposal is taking two important steps forward this week.

The first step: Senator Kevin de Leon (D-LA) and Senator Lou Correa (D-Orange County) today introduced enabling legislation for the program. Based on preliminary conversations, we are optimistic that this proposal will receive support from members of both political parties. This bill is designed to deal with questions regarding the agency’s authority to develop an OBR program. It also provides a mechanism for property owners to disclose OBR projects to prospective renters or buyers. This disclosure will enable a building occupant to see how the money saved by the efficiency project will be used to pay back the OBR investment tied to their property.

The second step: the CPUC is hosting workshops in San Francisco on February 8-10 to discuss the OBR proposal and other aspects of energy efficiency finance. More than 200 stakeholders and other members of the public are expected to participate in the workshops, including several contractors, lenders, Energy Services Agreement (ESA) companies and building owners that see an attractive economic opportunity in the program.

EDF looks forward to working with all interested parties, to construct a successful program that can begin financing projects early next year.

Also posted in Energy Efficiency, On-bill repayment / Comments are closed

California Follows Smart Meter Best Practice: Proactively Address Public Concerns

By Lauren Navarro / Published: February 2, 2012

This commentary was originally posted on the EDF California Dream 2.0 Blog.

Energy powers our economy. But our outdated energy system is wasteful, expensive and a major source of pollution, leading to the deaths of approximately 60,000 Americans per year. Utilities in California and across the country are now investing billions of dollars to modernize that infrastructure, making use of the information technologies that have revolutionized so many other realms of our lives. The smart grid they’re building will improve air quality and the health of millions of Americans affected by air so dirty it is often dangerous to breathe.

Smart meters are a key component of the smart grid. They unlock air quality, climate pollution and public health benefits by enabling two-way, real-time communication that gives households, small businesses, manufacturers and farmers (and the utilities that serve them) the data they need to cut energy use and electricity costs. These devices help ensure that every day energy users reap the many benefits of the smart grid.

Yesterday, the California Public Utilities Commission (CPUC) approved a proposal by Pacific Gas & Electric (PG&E) that allows customers to keep their analog meters and opt out of using the new wireless smart meters. This decision is designed to address concerns of individuals who describe themselves as having electromagnetic hypersensitivity to radio frequencies (RF), and report getting headaches, fatigue, nausea and insomnia from exposure.

The radio frequencies used by smart meters are now pervasive in our lives, emitted by our cell phones, microwaves, baby monitors, and numerous other devices we use daily. To understand the potential health risks associated with use of these devices, EDF has completed a thorough review of the scientific literature on the potential effects of electromagnetic and radio frequencies (EMF/RF) on human health. We have reviewed reports from the World Health Organization (WHO) and the California Council of Science and Technology (CCST). We also consulted with outside experts, including Dr. Leeka Kheifets, a Professor in Residence at UCLA who sits on the Standing Committee on Epidemiology for the International Commission on Non-Ionizing Radiation Protection.

The WHO review states that “in the area of biological effects and medical applications of non-ionizing radiation, approximately 25,000 articles have been published over the past 30 years. Scientific knowledge in this area is now more extensive than for most chemicals.” These studies, it concludes, find that “current evidence does not confirm the existence of any health consequences from exposure to low level electromagnetic fields.”

The WHO assessment spotlights the importance of conducting rigorous scientific research to evaluate environmental and health problems, a core principle of EDF. Our policies are based on the best available science and are altered as necessary when new evidence comes to light.

This research helped inform EDF’s position that the limited RF exposure levels associated with smart meters should not result in reduced support for the smart grid, especially in light of the significant health benefits it will deliver by enabling far less use of fossil fuels and far greater reliance on clean, renewable energy, including small, community-based generation like rooftop solar PV.

Today’s ruling strikes the proper balance: sustaining progress toward a smart grid with its multiple public health benefits while addressing individuals’ concerns. It gives consumers the same type of choice about what technologies to use in their everyday life.

We support the PUC’s decision and continuing research on the possible health effects of radio frequencies.

For more information on this topic, please see EDF President Fred Krupp’s memo on “Health and the smart grid.”

Also posted in Grid Modernization / Tagged Smart Meters | Read 3 Responses

Getting ‘Smart’ About Your Energy Use Just Got Easier

By Jamie Fine / Published: January 20, 2012

This commentary was originally posted on the EDF California Dream 2.0 Blog.

Source: Green Button

On Wednesday, I attended a presentation of the Green Button at EMC², hosted by Silicon Valley Leadership Group, OSIsoft and SolarCity, and moderated by Aneesh Chopra, U.S. Chief Tech Officer and Advisor to the President.

In essence, Green Button is literally a green button on utility customer interface websites that customers can click to instantly download their historical energy use data in a simple, standardized electronic format. Customers can then upload the data into software applications, or give it to consultants that provide services such as identifying how to save money by using less energy.

All of the big California utilities – SCE, SDG&E and PG&E – have embraced the concept and will offer the Green Button to their millions of customers. There is a hope that utilities across the country will also adopt it.

One presenter observed that Americans, on average, waste 20% of the energy that they purchase. This creates a huge opportunity to save money on energy and help to protect the environment by avoiding demand for energy generated by dirty sources, including coal-fired power plants.

Yesterday’s event revealed what can be accomplished when software innovators, government leaders and utilities focus on a common goal. Chopra is widely recognized as an IT innovator in government and he challenged the utility industry to develop access to consumer data in September 2011. Now Green Button is a fully operational, widely embraced standard that will provide a buffet of energy use data for hungry software application developers.

Testimonials were provided by up-and-coming CEOs in the energy sector, including oPower, Tendril, Lucid Design Group and Simple Energy. Each company demonstrated how Green Button will drive innovations in energy use software applications. For example, Tendril announced that its platform, Tendril Connect, will “connect utilities and energy service providers, consumers and app developers to achieve smarter energy usage.”

One question I was left with was, “just how green is the Green Button?” Currently, only the color pallet is green; no pollution information (such as greenhouse gas emissions) is associated with the energy use data.

While Dr. David Wollman, Deputy Director of Smart Grid & Cyber-Physical Systems, and Manager, Smart Grid Standards and Research at the National Institute of Standards and Technology (NIST), indicated that the Green Button standards do have accommodations for emissions information, there will need to be positive pressure to fully develop that piece of the button.

And that’s where EDF and you can come in. We need to encourage efforts to rigorously link emissions information with energy use, in both time and place.

As part of EDF’s smart grid work, we are working with utilities, regulatory agencies and third parties in California and across the country to ensure that innovators have access to an emerging and competitive utility market. Access to standardized energy use data is an essential piece. Why? So they can provide consumers with new tools that help them better understand and manage their energy use, which can save money, cut pollution and help protect the planet.

Also posted in Energy Efficiency, Grid Modernization / Read 3 Responses