Creates a commercial on-bill repayment program

Summary of provisions

Section 1 of the bill outlines the Legislative findings.

Section 2 of the bill would amend the Public Authorities Law by adding a new title 9B to be known as the "Commercial On-Bill Repayment Program".

Section 3 would amend the Public Authorities Law to allow NYSERDA to issues rules and regulations for Title 9-B, the "Commercial On-Bill Repayment Act of 2014".

Section 4 would amend the Public Service Law to exclude on-bill recovery charges from any determination of a participating utility's gross operating revenues.

Section 5 would amend the Public Service Law to allow, but not require gas corporations to establish on-bill recovery charges for customers participating in the Commercial On-Bill Repayment program.

Section 6 would amend the Public Service Law by adding a new section 66-n to investigate program implementation. Section 6 would create an Advisory Council to advise the Authority on the creation and implementation of the program.

Section 7 would renumber sections 1020-ii, 1020-jj and 1020-kk of the Public Authorities Law to 1020-jj, 1020-kk and 1020-11 and adds a new section 1020-ii which would establish a program to provide for the billing and collection of on-bill repayment charges for payment of obligation of its customers to the commercial on-bill repayment program.

Section 8 would amend the Real Property Law by requiring disclosure of the "Commercial On-bill Repayment charge" upon sale of the property.

Section 9 would amend the Real Property Law to require NYSERDA to record the loan.

Section 10 This act shall take effect immediately.

Statement in support

This legislation will create a market based, open-source on-bill repayment (OBR) platform allowing consumers to finance energy efficiency and distributed generation projects on commercial properties at low rates of interest with longer-term repayment schedules. Financing is provided by private lenders and investors no taxpayer or ratepayer funds are used or put at risk - and repaid over time through the monthly utility bills.

This legislation has one part:

To create an open-source on-bill repayment mechanism designed to attract private capital into the market to finance energy efficiency and renewable energy projects on commercial properties.

On-bill repayment is a market-based, open-source platform for private investors to finance energy efficiency and distributed generation projects at competitive rates of interest with long-term repayment schedules. The "open-source" platform allows for the participation of private investors to provide capital to energy efficiency and distributed generation projects. Financial institutions may offer a variety of financing products (loans, leases, Energy Services Agreements (ESA), Power Purchase Agreements (PPA), etc.) to best meet the needs of their customers.

OBR:

*Creates a marketplace for clean energy lending, expanding the pool of investors and economically-attractive projects thus lowering financing and transaction costs

*No taxpayer or ratepayer funds used or put at risk

*The obligation to repay is a tariff on the meter repaid through the utility bill

*The tariff stays with the meter through changes in occupancy or ownership (including bankruptcy and foreclosure)

*Bill neutrality requires that the expected savings from the project must be greater than the financing cost

*A third-party Master Servicer acts as an interface and clearing house between the billing utilities and investors, reducing transaction costs Tariffed OBR has three key features:

*Normal collection procedures apply to the collection of the OBR charge

*The OBR obligation automatically transfers to new owner if building ownership changes

*Bill neutrality requires that expected savings for consumers from the project are greater than financing cost

A tariffed OBR provides a higher degree of security to investors therefore increasing investor willingness to finance projects. A tariffed OBR program will bring tremendous benefits including:

*Long-term, sustainable clean energy economy jobs;

*Millions in additional private capital investment, and; *Reduced greenhouse gas emissions

An "open source" platform. designed to drive private capital into energy efficiency and renewable energy projects on commercial properties:

*Is non-prescriptive, and technology agnostic, allowing customers to choose the best, most effective option available to them from a variety of competing contractors and investors

*Would accommodate financing for commercial and industrial buildings

*Allows for financing from private capital providers in a competitive marketplace, without using taxpayer or ratepayer funding

*Can accommodate a variety of financial arrangements, including leases (particularly important because many residential rooftop solar installations are structured as leases), ESAs, and PPAs

*Can accommodate many energy efficiency and clean distributed energy measures, including single measure installations, whole-building interventions and everything in between

*Leverages existing changes to billing mechanisms and existing master servicer tc allow for the private sector financing of clean energy retrofits in the commercial sector

In summary:

1. Program participation is completely voluntary

2. Saves consumers money on their energy bills

3. No public funding required; no ratepayer or taxpayer funds are used or put at risk

4. Contains significant protections designed to simultaneously protect consumers and attract private capital investment

5. Creates an open source scalable platform designed to attract private capital, expanding the pool of investors providing capital

6. Lowers financing and transaction costs for consumers

7. Creates jobs and economic activity

8. Accelerates capital flows into clean energy investments

9. Reduces greenhouse gas emissions

10. Avoids the cost of new generation capacity and reduces use of higher cost generation

On-bill recovery will work in conjunction with GJ-GNY and New York's other energy efficiency programs, driving private capital into the New York economy and stimulating significant job creation in the energy efficiency and renewable energy industry.

Prior legislative history

This is a new proposal.

Budget implications

None.

Effective date

Immediately.