The California Public Utilities Commission (CPUC) proposed a decision to implement an energy efficiency financing pilot program, including an on-bill repayment feature, to test the value of incentives to financial institutions and utility customers. The CPUC is set to vote on the proposed decision Sept 19.
Among other things, the decision authorizes an expansion of on-bill utility collection of the monthly finance payments for energy efficiency projects. The on-bill Repayment (OBR) feature will test whether payment on the utility bill increases debt service performance across market sectors. No ratepayer funds are authorized to support OBR financing for medium and large businesses. The decision requires the utilities to develop uniform OBR tariff language that includes transferability of the obligation through written consent (and other mechanisms), and service disconnection for default on the debt obligation.
The Environmental Defense Fund issued the following statement in response to the CPUC’s proposed decision:
“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 proposed pilot comes pursuant to California’s Energy Action Plan wherein the state has determined to invest first in energy efficiency and demand-side resources, followed by renewable resources, and then in clean conventional electricity supply. This proposed decision allocates $65.9 million to launch the pilot programs designed to test market incentives for attracting private capital through investment of limited ratepayer funds.
The financing pilot would also create the California Hub for Energy Efficiency Financing Entity (CHEEF) to manage the flow of funds and data and provide a structure through which energy users, financial institutions, energy efficiency providers and IOUs can participate in a standardized “open market” that facilitates energy efficiency financing in California.
Photo credit: Prayitno’s Flickr photostream