EDF, Business Community Respond to Decision for On-Bill Repayment in California

FOR IMMEDIATE RELEASE                                                                                           

Contact:
Joaquin McPeek, 916-492-7173, [email protected]

(SAN FRANCISCO, CA – Sept 17, 2013) Environmental Defense Fund (EDF) issued the following statement today in response to the California Public Utilities Commission’s (CPUC) proposed decision for an On-Bill Repayment (OBR) program for public and commercial buildings. OBR is intended to allow property owners access to cleaner, cheaper energy by helping them finance energy efficiency and renewable energy upgrades to their buildings. Through OBR, building owners can repay the obligation for the clean energy upgrade over an extended period of time through a charge on their utility bill.

Unfortunately, the proposed decision does not ensure that the OBR repayment charge remain attached to the utility meter, and automatically transfer to the subsequent owners/occupants without requiring written consent. While this is not a major obstacle for public buildings, like community centers or schools, which rarely change ownership, the absence of automatic “transferability” makes OBR very difficult to implement for private commercial buildings.  EDF has been pushing hard for transferability and strongly recommends that the proposed decision allows OBR to automatically transfer to subsequent owners/occupants. The CPUC is set to vote on the proposed decision on Sept 19. 

“While the revised decision contains many of the elements necessary for a successful OBR program, we believe Californians deserve better,” said Brad Copithorne, EDF’s Financial Policy Director. “EDF remains optimistic that this program will help accelerate cost-effective, clean energy upgrades in the publically owned buildings. Unfortunately, if adopted in its current form, the program would miss a golden opportunity for California’s commercial buildings to invest in clean energy, create jobs, save money and continue the state’s leadership in the clean energy economy.”

“We urge the PUC to reconsider and create an OBR program that will spur investment in both commercial and public buildings. It would be a step in the right direction for energy efficiency financing in California.”

What others are saying about the need for a robust OBR program:

Citi, Director, Steve Vierengel:

At the Citi and EDF “Innovations in Energy Efficiency and Distributed Generation Finance II” conference on February 28, 2013, Steve Vierengel, Director at Citi, stated that “automatic transferability without subordination will be critical to the success of an OBR program.”

SolarCity Comments to CPUC filed August 5^th, 2013:

“[We] are concerned about a key feature of the PD’s OBR pilot that may frustrate or completely nullify the benefits of OBR or limit the applicability of any lessons learned from the pilot. Specifically, the requirement that subsequent property owners, landlords and tenants (to the maximum extent feasible) will have to provide written consent to the OBR obligation is problematic, particularly following a foreclosure.”

Metrus Energy, CEO/President Bob Hinkle:

“A properly structured OBR program will likely allow Metrus (and other energy services companies) to finance projects that do not qualify today. Survivability of the OBR obligation through a foreclosure, is what separates OBR from a second lien, unsecured loan or other traditional financing products.”
-Letter to Brad Copithorne dated July 2^nd, 2013

SCIenergy, CEO Steve Gossett Jr: 

“If implemented with survivability through foreclosure that is not contingent upon future occupants’ consent, and is not-subordinated to energy charges, OBR may catalyze significant growth in the energy efficiency market.”
-Letter to Brad Copithorne dated July 15^th 2013

Renewable Funding Comments to CPUC filed August 5^th, 2013:

“Without a tariff-based obligation that applies to the property until the OBR obligation is satisfied, this pilot will not create a new lending opportunity from the perspective of financial institutions.”

Carbon Lighthouse, CEO Brenden Millstein:

“Carbon Lighthouse has dozens of projects lined up and ready to be executed through the OBR program, but these projects may have difficulty moving forward if the OBR attachment mechanism is not done well.”
-Letter to Brad Copithorne dated June 25^th, 2013

Matadors Community Credit Union (MCCU), Chief Lending Officer Mark Tsimanis:

“MCCU believes that an OBR program that survives foreclosure, is not contingent upon consent of future owners or occupants, provides adequate disclosure, and is treated equal to the energy charge on the utility bill may significantly grow the energy efficiency market.”
-Letter to Brad Copithorne on July 12^th, 2013

PineBridge Investments, Vice President Gunter Seeger:

“If the obligation is considered subordinate to the energy charge or does not run-with-the meter through changes in occupancy, then OBR offers no credit enhancement relative to existing opportunities and PineBridge would be unlikely to participate in OBR.”
-Letter to Commissioner Ferron dated August 2^nd, 2013

Alternative Power Capital Comments to CPUC filed August 5^th, 2013:

“Attachment of the OBR obligation to the meter via a tariffed charge that applies to subsequent customers on a property transfer, with service termination right for default, has the potential to open up a new market opportunity.”

To read Brad’s blog on the proposed decision: http://blogs.edf.org/californiadream/2013/09/17/the-fate-of-on-bill-repayment-in-california-one-step-forward-two-steps-back/

For more information about On-Bill Repayment: http://www.edf.org/energy/obr