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June 2011 Archives

June 9, 2011

New York City Announces Program to Test Green Products in City-Owned Buildings

In May 2011, New York City announced that it is accepting applications for the Municipal Entrepreneurial Testing System (METS), a new program that will allow startup companies to test green products, such as smart meters and renewable energy technologies, in city-owned properties. According to the city, METS will help clean-tech companies market their products more quickly, green the city, and create new jobs for New Yorkers who manufacture, sell and install these new technologies.

According to the city, applications should target products that have the potential to cost-effectively improve the environmental performance of city-owned buildings and/or sites. Specifically, it is looking for products in 14 specific areas: lighting; HVAC and lighting controls and sensors; meters, sub-meters, and related measuring and monitoring software; HVAC and service hot water systems; building management systems; energy and plug load management systems; renewable energy (solar PV, solar heating, wind, geothermal); envelope technologies, including roof, wall, fenestration, foundation and assembly systems; clean distributed generation, including combined heat and power; lab and fume hood technologies; interior finishes and/or furnishings that reduce toxic indoor gases; water efficiency, including recycling systems and uses; storm water management in buildings and sites; and analytical tools and software.

A panel of specialists will review the proposals and select finalists based on feasibility, scalability, cost-effectiveness, compliance with current laws, and other criteria. The city also intends to forward particularly promising applications to building owners and outside investment groups.

Interested companies were required to submit a 1-page letter of intent by May 27 and a full 5-page application by June 30, 2011. Additional details are available here.

June 15, 2011

New York, Along with 11 Other Northeastern and Mid-Atlantic States, Agrees to Support Sustainable Communities

On June 7, 2011, 12 Northeastern and Mid-Atlantic states announced that they have agreed to work cooperatively to support sustainable communities. The agreement was announced by the Transportation and Climate Initiative, whose goals include reducing greenhouse gas emissions in the transportation sector and creating clean-energy jobs.

The Initiative was launched in June 2010 and includes transportation, energy, and environmental officials in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and the District of Columbia.

Under the agreement, the agencies of all participating states will work together to promote sustainable communities that expand transportation options, promote economic prosperity, enhance natural resource protection, strengthen communities, and minimize environmental impacts. According to the agreement, the states will meet this goal through enhancement of state-level transportation policies that combine a smart growth land use planning approach with sustainable development concepts and by partnering with community development, economic growth, and housing and land use agencies.

With respect to clean, safe, and affordable transportation, the agreement's goals are to increase safe and affordable, multi-modal transportation options, lower greenhouse gas emissions and other pollutants, increase energy efficiency in the transportation sector, reduce reliance on foreign oil, and improve air quality. With respect to economic prosperity, the states will target investments in transportation systems and other infrastructure to support economic growth and development while reducing long-term environmental, public health and energy costs.

With respect to natural resource protection, the agreement's goals are to promote smart growth supported by sustainable state transportation, environmental and energy decisionmaking to help cities, towns, and villages protect natural resources, waterways, open space, and active farmland, and enhance access to natural and cultural resources.

With respect to strengthening communities, the agreement's goals are to encourage land-use practices that include all modes of transportation--cars, buses, trains, bikes, and walking--that build communities around existing and planned transit, reduce automobile dependence, minimize the amount of land devoted to roads, and support housing options that address the needs of all residents of all ages and incomes.

With respect to minimizing environmental impacts, the agreement's goals are to construct and manage transportation, infrastructure, and development projects in ways that limit emissions and wastes, promote construction practices and recycling to conserve natural resources, minimize waste and pollution, and maximize efficiencies in the use of land, energy, water and materials.

June 22, 2011

RGGI Announces that Only 30% of Available Allowances Purchased at June Auction

On June 10, 2011, the Regional Greenhouse Gas Initiative (RGGI) announced that only 30 percent of the 42 million carbon dioxide allowances offered for sale in its June 8 auction were purchased at the minimum reserve price of $1.89 per allowance. According to RGGI, approximately half of the 1.8 million allowances offered for sale for use after 2012 were sold at the same price. A spokesperson for RGGI stated that this decline in demand could be attributed to significantly reduced carbon emissions. According to RGGI, 25 entities purchased the allowances available for immediate use. Ninety-one percent of the entities are electric generators or their affiliates. In the first 12 RGGI auctions, electric generators or their affiliates have purchased 85 percent of the allowances available for immediate use, 92 percent of those available for future use, and 85 percent of all allowances sold. Each allowance allows the owner to emit one ton of carbon dioxide.

June 29, 2011

State Legislature Passes Bill Regulating Large Water Withdrawals

On June 16, 2011, the state Legislature passed a bill that, if enacted, would protect the state's water resources by regulating water withdrawals of 100,000 gallons or more per day. The law would require DEC to promulgate regulations establishing a water-permitting program for large users. To obtain a permit, water users would be required to demonstrate they have incorporated environmentally sound and economically feasible water conservation methods.

According to the sponsor memo accompanying the bill, the law would bring New York into compliance with the Great Lakes-St. Lawrence River Basin Water Resources Compact, which requires New York and other Great Lakes states to regulate large water withdrawals from the Great Lakes Basin, according to a memo from the sponsors of the bill. According to the memo, under current law, the state's authority to protect water withdrawals is largely limited to public water supplies to ensure an adequate amount of potable water.

New York Legislature Passes Innovative Financing Mechanism for Improving Building Energy Efficiency

On June 22, 2011, the New York State Legislature passed The Power NY Act of 2011 (A. 8510/S. 5844) (PNY Act). Governor Cuomo is expected to sign it. The new law, once enacted, would do two very important things: (1) provide a mechanism to allow owners of residential and non-residential buildings to borrow money for energy efficiency projects, and pay it back over a period of years through their electric and gas bills; and (2) revive Article X of the Public Service Law, which creates an expedited, state-led program for permitting electric generating facilities while preempting local requirements. Additionally, the new law requires a study with respect to increasing solar photovoltaic generation in the state. This blog post will explain the first part of the bill--the on-bill recovery program.

"On-bill" financing is a mechanism that allows utility customers to pay back loans for energy efficiency upgrades through a charge on their monthly utility bill. This type of financing mechanism helps to overcome some common barriers to energy efficiency, including the up-front capital cost and the complexity of taking out a loan from a third-party lender that requires payment through a separate invoice. In addition, on-bill recovery allows the charge to stay with the property upon its sale or lease. This type of financing is also advantageous because it does not require a separate loan be taken out by a homeowner in the form of a mortgage, which could exclude persons who have poor credit. Although several municipalities and individual utilities have implemented limited on-bill financing programs, this is the first statewide program of its kind in the nation that allows residents, non-profits, and small businesses access to on-bill recovery for energy efficiency upgrades.

The new program will serve much the same function as the Property Assisted Clean Energy (PACE) program, which issued loans for energy efficiency and paid them back through charges on property taxes. PACE collapsed in 2010 because of objections from federal mortgage lenders who did not want their liens to be second priority behind PACE loans. PACE also required municipalities to adopt implementing legislation; on-bill financing does not.

Background: Green Jobs/Green New York Act

In 2009, the Legislature enacted the Green Jobs/Green New York Act (GJGNY Act). The GJGNY Act directs the New York State Energy Research Development Authority (NYSERDA) to establish a revolving loan fund to finance "qualified energy efficiency services" for residential, small business, not-for-profit, and multi-family structures. These services include modifications to a structure based on the recommendations of an energy audit approved by NYSERDA that will increase its energy efficiency.

The GJGNY Act further directs NYSERDA to use $112 million that represented a portion of New York's share of the proceeds from the sale of carbon allowances under the Regional Greenhouse Gas Initiative (RGGI) for the revolving loan fund. RGGI is the first mandatory carbon dioxide mitigation trading system in the U.S. Its members include 10 Northeast and Mid-Atlantic states (though Governor Chris Christie is pulling New Jersey out of the program). RGGI regulates carbon dioxide emissions from electric power plants that have a capacity of at least 25 megawatts. Emissions are capped at a certain level and regulated utilities must purchase carbon allowances via auction, the proceeds of which are then returned to the member states.

The GJGNY Act limited the amount of each loan as follows: loans are not to exceed $13,000 per applicant for approved qualified energy efficiency services for residential structures and $26,000 per applicant for approved qualified energy efficiency services for non-residential structures. For multi-family structures, loans are to be in amounts determined by NYSERDA, provided that it assures that a significant number of residential structures are included in the program.

On-Bill Recovery Provisions of the PNY Act

The PNY Act makes no substantive changes to the GJGNY Act. Instead, it provides a mechanism that allows customers who take out loans pursuant to the GJGNY Act to repay these loans through a charge on their monthly utility bill.

The on-bill recovery program is located in Sections 2-11 of the PNY Act, the most important of which are Sections 5,8 and 11.

Section 5 amends the Public Service Law by adding a new Section 66-m. This section requires the Public Service Commission (PSC), within 45 days of the effective date of the Act, to commence a proceeding leading to the establishment of billing and collection services for on-bill charges for customers of gas and electric utilities with respect to payment of obligations for energy efficiency projects under the GJGNY Act. Covered utilities are directed to use existing billing systems, to the extent practical, to collect on-bill charges and use money available from NYSERDA for improvements that would streamline the collection of these charges. The program is initially limited to no more than 0.5% of the customers of a covered utility; NYSERDA can increase this limit as long as the PSC finds that the program is not causing significant harm to the utility or its ratepayers. (PNY Act § 5; Public Service Law (PSL) § 66-M(1)(A)-(1)(B)). This is an important provision, as it allows for NYSERDA (with PSC approval) to scale up the program without requiring additional action by the legislature.

Participation in the program for residential customers is limited to those individuals who hold primary ownership of the premises and hold primary meter account responsibility for all meters to which such on-site recovery charges will apply. (PNY Act § 5; PSL§ 66-M(2)(A)).

Unless fully satisfied prior to sale or transfer of the property, the on-bill charges for any services provided at a particular premises will survive changes in ownership, tenancy, or meter account responsibility. In addition, any arrears in on-bill charges at the time of account closure or meter transfer will remain the responsibility of the incurring customer, unless expressly assumed by a subsequent purchaser of the property. It will be NYSERDA's responsibility, rather than the utility, to collect such arrears. (PNY Act § 5; PSL § 66-M(2)(D)-(2)(E)).

While the loan amounts for each applicant remain $13,000 for residential structures and $26,000 for non-residential structures, NYSERDA can increase these amounts to as much as $25,000 for residential structures and $50,000 for non-residential structures if the total cost of the energy efficiency measures will achieve a payback period of 15 years or less. Further, the monthly repayment amount cannot exceed 1/12 of the annual savings projected to result from the installation of energy efficiency measures financed by the program. (PNY Act § 8; Pub. Auth. L. § 1896(2)(b)(ii), (2)(e)(i)).

For each loan, NYSERDA is required to file a mortgage upon the property that received the loan, which is subordinate to any existing or future mortgage on the property. (PNY Act § 8; Pub. Auth. L. § 1896(4)(a)).

Any entity offering to sell real property that is subject to an on-bill charge pursuant to the GJGNY Act must provide a prospective purchaser with written notice prior to the acceptance of a written offer detailing the property's obligations to the program, the amount of the original charge, the payment schedule, the remaining balance, and a description of the energy efficiency service performed on the property. (PNY Act § 11; Real Prop. L. 242(4)).

About June 2011

This page contains all entries posted to Envirosphere in June 2011. They are listed from oldest to newest.

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