Published on February 19, 2014
The Clean Energy Financing and Investment Authority: Creating and Managing a Green Bank Bryan Garcia, President and CEO, CEFIA February 6, 2014
Washington, D.C. Creating and Managing a Green Bank Agenda 202.777.7700 • Foundation for Success and Overview • Important Decisions We Made Early On • “Top 3” Biggest Successes • “Top 3” Biggest Challenges Going Forward • The Green Bank Model Works 2
Washington, D.C. Foundations for Success 202.777.7700 • POLICY: State energy policy was (and is) an important focus for the Governor - sweeping energy legislation June 2011 • INDEPENDENCE: Connecticut’s green bank would become its own quasi-public organization, but with existing staff • FUNDING: Connecticut’s green bank would take over existing sources of capital – Clean Energy Fund and RGGI allowance proceeds • GOVERNANCE: New Entity & New Board. Board of the Clean Energy Fund – the predecessor to CEFIA – was disbanded by act of legislation that created CEFIA on July 1, 2011 3
Washington, D.C. Overview Visionary Leadership 202.777.7700 …transitioning programs away from government-funded grants, rebates, and other subsidies, and towards deploying private capital …CEFIA was established in 2011 to develop programs that will leverage private sector capital to create long-term, sustainable financing for energy efficiency and clean energy to support residential, commercial, and industrial sector implementation of energy efficiency and clean energy measures. 4
Washington, D.C. Overview Organization 202.777.7700 • Quasi-public organization – created by PA 11-80 and successor to the Connecticut Clean Energy Fund • Focus – finance clean energy (i.e. renewable energy, energy efficiency, and alternative fuel vehicles and infrastructure) • Balance Sheet – currently $100 million in assets • Support – supported by a $0.001/kWh surcharge on electric ratepayer bills that provides approximately $30 MM a year for investments, RGGI (EE and RE) about $5-$10 MM a year, federal competitive solicitations (i.e. SunShot Initiative) and non-competitive resources (i.e. ARRA-SEP), private capital, etc. 5
Washington, D.C. Overview Financial Tools 202.777.7700 Grants Special Capital Reserve Fund Equity Loans Connecticut Green Bank Third Party Insurance Subordinated Debt Loan Loss Reserves Leases, PPAs, and ESAs Energy Savings Performance Contracts Bonding Commercial Property Assessed Clean Energy On-Bill Repayment 6
Washington, D.C. Important Decisions We Made Early On202.777.7700 Decision #1 – Governance Positions Committees Chair Catherine Smith B&O Dan Esty DECD DEEP President & CEO Vice Chair Dan Esty Deployment Reed Hundt Bryan Garcia DEEP Coalition Green Capital Board of Directors Administrative Staff Professional Staff Secretary Matthew Ranelli AC&G Matt Ranelli (CII) (CEFIA) Shipman & Goodwin Shipman & Goodwin REFERENCES Established Board of Directors in September of 2011 – bylaws, operating procedures, employee handbook, etc. 7
Washington, D.C. Important Decisions We Made Early On202.777.7700 Decision #2 – Who Are We (Stakeholder Views) REFERENCES Strategic Planning Retreat at the Pocantico Conference Center (November 2011) 8
Washington, D.C. Important Decisions We Made Early On 202.777.7700 Decision #2 – Who Are We (Board of Directors View) CLEAN TECH or CLEAN ENERGY FINANCE 9
Washington, D.C. Important Decisions We Made Early On202.777.7700 Decision #3 – What Programs Do We Keep? Clean Tech Training 37 PROGRAMS Education Green Bank 4 PROGRAMS 10
Washington, D.C. Important Decisions We Made Early On202.777.7700 Decision #4 – What Are Our Goals Support the Governor’s and legislature’s energy strategy to achieve cleaner, cheaper and more reliable sources of energy while creating jobs and supporting local economic development • Attract and deploy capital to finance the clean energy goals for Connecticut • Develop and implement strategies that bring down the cost of clean energy in order to make it more accessible and affordable to consumers • Reduce reliance on grants, rebates and other subsidies and move towards innovative low-cost financing of clean energy deployment 11
Washington, D.C. Important Decisions We Made Early On202.777.7700 Decision #4 (cont’d)–…and Metrics of Success? • Maximize the amount of clean energy produced (or energy saved) per dollar of public funds at risk • Amount of clean energy (i.e. energy efficiency, renewable energy, etc.) produced and deployed. Jobs created and amount of emissions reduced • Deploy X amount of private capital leveraged by Y amount of public funds by Year Z. Total dollars of investment in clean energy • Ratio of private capital to public funds and ratio of ratepayer funds invested in subsidies (i.e. grants) versus financing programs (i.e. loans) 12
Washington, D.C. Important Decisions We Made Early On Decision #5 – What Structure Do We Build? Finance Residential Sector Operations 202.777.7700 President and CEO C&I Sector Institutional Sector Infrastructure Sector Legal Marketing Policy HR IT 13
Washington, D.C. Biggest Successes #1 Rebuilt the Organization Finance 3 President and CEO 4 Marketing (Future Hire) 5 Residential Sector Operations 202.777.7700 C&I Sector Institutional Sector Infrastructure Sector Legal 2 Marketing 1 6 Policy HR IT REFERENCES Everybody depicted in this slide, was not with the organization before May 31, 2011. Each of them is here at the Green Bank Academy. 14
Washington, D.C. Biggest Successes #2 202.777.7700 Municipalities Opted into C-PACE • • • • • • • • • • • • • • • • • • Ansonia Avon Beacon Falls Berlin Bloomfield Branford Bridgeport Brookfield Canaan Canton Chester Clinton Coventry Danbury Durham East Granby East Haddam East Hampton • • • • • • • • • • • • • • • • • • • • East Hartford East Windsor Enfield Fairfield Farmington Glastonbury Granby Greenwich Groton Hartford Killingworth Manchester Mansfield Meriden Middletown Milford Montville New Britain New Haven New London • • • • • • • • • • • • • • • • • • • • New Milford Newtown North Branford North Canaan Norwalk Norwich Old Saybrook Plainville Portland Putnam Rocky Hill Simsbury Southbury Southington Sprague Stafford Stamford Stratford Suffield Tolland • • • • • • • • • • • • • • Torrington Trumbull Vernon Waterbury Waterford West Hartford West Haven Westbrook Westport Wethersfield Wilton Windham Windsor Windsor Locks Over 80% of Connecticut is Open for Business 15
Washington, D.C. Biggest Successes #3 202.777.7700 Residential Solar PV $/W Reduced installed cost $/Watt by about 10% year-over-year since 2011 Lowered subsidy by 20% since 2011 CT Solar Lease 2 ($60 MM), CT Solar Loan ($5 MM), and Smart-E Loan ($30 MM) Installed capacity grew 150% year-over-year since 2011 kW 16
Biggest Challenges Going Forward #1 Washington, D.C. 202.777.7700 State Budget Deficits and CEFIA Balance Sheet 17
Washington, D.C. Biggest Challenges Going Forward #2 Collaboration with the Utilities 202.777.7700 ▪ Use of Funds – ratepayer funds vs. private capital (credit enhancement strategy of IRBs versus LLRs) ▪ Additionality – utility model of cost-effectiveness testing (i.e. freerider and spill-over effects) ▪ Goal Congruence – energy savings + private capital to achieve deeper savings 18
Washington, D.C. Biggest Challenges Going Forward #3 202.777.7700 Financial Innovation AND Marketing Innovation Increase the attractiveness to capital providers Increase the attractiveness to customers 19
Washington, D.C. The Green Bank Model Works Recap 202.777.7700 • Green banks support the energy policy • Organizational independence is key • Focus on clean energy finance • Hire the right people • Demonstrate (then communicate) impactful results 20
Washington, D.C. The Green Bank Model Works Doing More, Faster and Efficiently $220 MM INVESTMENT 10:1 LEVERAGE 202.777.7700 1,200↑ 30 MW DEPLOYMENT JOBS ECONOMY 250,000↓ TCO2 ENVIRONMENT 21
Thank You Bryan Garcia, President and CEO Clean Energy Finance and Investment Authority 845 Brook Street, Rocky Hill, CT Bryan.Garcia@ctcleanenergy.com (860) 257-2170 www.ctcleanenergy.com
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