NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10038
SPONSOR: Rules (Paulin) TITLE OF BILL: An act to amend the public authorities law, the public
service law and, the real property law, in relation to establishing the
"Commercial on-bill repayment act of 2014"
PURPOSE OF BILL: Commercial. On-bill Repayment facilitates the
financing of clean energy projects through the utility bill, which can
allow for more affordable financing terms than would be otherwise avail-
able due to the security of utility bill payments. On-bill repayment
will incentivize private investors to invest in clean energy improve-
ments in New York, will stimulate the state's economy by creating jobs
for contractors and other persons who complete new energy improvements,
and will reinforce the leadership role of the state in the new energy
economy, thereby attracting clean energy manufacturing facilities and
related jobs to the state.
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 oper-
ating 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 implementa-
tion 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-ll and adds a new
section 1020-ii which would establish a program to provide for the bill-
ing and collection of on-bill repayment charges for payment of obli-
gation 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 provides the effective date.
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 commer-
cial 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.
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 sche-
dules. The "open-source" platform allows for the participation of
private investors to provide capital to energy efficiency and distrib-
uted 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.
On-bill repayment:
*Creates a marketplace for clean energy lending, expanding the pool of
investors and economically-attractive projects which lowers 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 occupan-
cy 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
*A tariffed OBR provides a higher degree of security to investors there-
fore increasing investor willingness to finance projects. A tariffed ORR
program will bring tremendous benefits including:
*Long-term, sustainable clean energy economy jobs;
*Millions in additional private capital investment, and; *Reduced green-
house 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 installa-
tions are structured as leases), ESAs, and PPAs
*Can accommodate many energy efficiency and clean distributed energy
measures, including single measure installations, whole-building inter-
ventions and everything in between
*Leverages existing changes to billing mechanisms and existing master
servicer to 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.
