creating & managing a green bank
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DESCRIPTIONThis presentation given by Connecticut Green Bank President Bryan Garcia shares some of the best practices involved with creating and managing a state green bank.
- 1. The Clean Energy Financing and Investment Authority: Creating and Managing a Green Bank Bryan Garcia, President and CEO, CEFIA February 6, 2014
2. 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 Works2 3. Washington, D.C.Foundations for Success202.777.7700 POLICY: State energy policy was (and is) an important focus for the Governor - sweeping energy legislation June 2011 INDEPENDENCE: Connecticuts green bank would become its own quasi-public organization, but with existing staff FUNDING: Connecticuts 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 4. Washington, D.C.Overview Visionary Leadership202.777.7700transitioning 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 5. Washington, D.C.Overview Organization202.777.7700 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 6. Washington, D.C.Overview Financial Tools202.777.7700GrantsSpecial Capital Reserve FundEquityLoansConnecticut Green BankThird Party InsuranceSubordinated DebtLoan Loss Reserves Leases, PPAs, and ESAsEnergy Savings Performance ContractsBonding Commercial Property Assessed Clean EnergyOn-Bill Repayment 6 7. Washington, D.C.Important Decisions We Made Early On202.777.7700 Decision #1 Governance PositionsCommitteesChair Catherine SmithB&O Dan EstyDECDDEEPPresident & CEOVice Chair Dan EstyDeployment Reed HundtBryan GarciaDEEPCoalition Green CapitalBoard of DirectorsAdministrative StaffProfessional StaffSecretary Matthew RanelliAC&G Matt Ranelli(CII)(CEFIA)Shipman & GoodwinShipman & GoodwinREFERENCES Established Board of Directors in September of 2011 bylaws, operating procedures, employee handbook, etc.7 8. Washington, D.C.Important Decisions We Made Early On202.777.7700Decision #2 Who Are We (Stakeholder Views)REFERENCES Strategic Planning Retreat at the Pocantico Conference Center (November 2011)8 9. Washington, D.C.Important Decisions We Made Early On202.777.7700Decision #2 Who Are We (Board of Directors View)CLEAN TECHorCLEAN ENERGY FINANCE9 10. Washington, D.C.Important Decisions We Made Early On202.777.7700 Decision #3 What Programs Do We Keep? Clean Tech Training37 PROGRAMSEducationGreen Bank4 PROGRAMS 10 11. Washington, D.C.Important Decisions We Made Early On202.777.7700 Decision #4 What Are Our Goals Support the Governors and legislatures 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 deployment11 12. Washington, D.C.Important Decisions We Made Early On202.777.7700 Decision #4 (contd)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 13. Washington, D.C.Important Decisions We Made Early On Decision #5 What Structure Do We Build? FinanceResidential SectorOperations202.777.7700President and CEOC&I SectorInstitutional SectorInfrastructure SectorLegal Marketing Policy HR IT13 14. Washington, D.C.Biggest Successes #1 Rebuilt the Organization Finance3President and CEO4Marketing (Future Hire)5Residential SectorOperations202.777.7700C&I SectorInstitutional SectorInfrastructure SectorLegal2Marketing16Policy 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 15. Washington, D.C.Biggest Successes #2202.777.7700Municipalities 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 LocksOver 80% of Connecticut is Open for Business 15 16. Washington, D.C.Biggest Successes #3202.777.7700Residential Solar PV $/WReduced 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 2011kW16 17. Biggest Challenges Going Forward #1Washington, D.C. 202.777.7700State Budget Deficits and CEFIA Balance Sheet17 18. Washington, D.C.Biggest Challenges Going Forward #2Collaboration with the Utilities202.777.7700 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 19. Washington, D.C.Biggest Challenges Going Forward #3202.777.7700Financial Innovation AND Marketing InnovationIncrease the attractiveness to capital providersIncrease the attractiveness to customers19 20. Washington, D.C.The Green Bank Model Works Recap202.777.7700Green banks support the energy policyOrganizational independence is keyFocus on clean energy financeHire the right peopleDemonstrate (then communicate) impactful results20 21. Washington, D.C.The Green Bank Model Works Doing More, Faster and Efficiently$220 MM INVESTMENT10:1 LEVERAGE202.777.77001,20030 MW DEPLOYMENTJOBS ECONOMY250,000 TCO2 ENVIRONMENT21 22. 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