On-Bill Financing An Overview for Local Governments Mike Hackett NRG Answers, LLC for Pacific Gas & Electric October 10, 2014
On-Bill Financing: Program Overview • What is On-Bill Financing? • PG&E energy efficiency program to assist non-residential customers and government customers with funding for energy efficient facilities improvements through zero interest loans • OBF serves as an enhancement to existing rebate and/or incentive programs o OBF helps remove the upfront cost barrier that often prohibits local governments from installing energy efficiency retrofits, particularly for smaller capital improvement projects • After project completion, PG&E will lend the money for the retrofit and the customer will pay the loan – interest free – through their monthly utility bills • Note: OBF is one of many financing tools. Customers can self- fund energy efficiency projects, or obtain financing through regular lender programs. 2
On-Bill Financing: Eligibility • Who is eligible? • OBF is available to non-residential customers for projects that qualify for a rebate or incentive through a PG&E program, and meet the minimum payment history screening criteria • Commercial customers may qualify for loans between $5,000 and $100,000, with loan periods of up to 60 months • Government agencies may qualify for loans between $5,000 and $250,000 per PG&E meter ($1M cap w/PG&E approval*), loan periods of up to 120 months Note: OBF eligibility is subject to a customer payment history review Loan Terms Commercial, Industrial, Government Agency Agricultural Only Interest 0% 0% Minimum Loan Amount per Customer $5,000 $5,000 Maximum Loan Amount $100,000 / premises $250,000 / meter** Maximum Loan Amount per Customer $1,000,000 $1,000,000 Maximum Loan Term 60 months 120 months *$1,000,000 allowed ‘where, in PG&E’s sole opinion, unique opportunities to capture large energy savings exist and all other OBF loan program terms will be met. Meters and locations can be aggregated. **$250,000 max per government customer for LED Streetlight Projects 3
Sample OBF Payment Calculation 4
OBF Status Report – August 2014 5 OBF Loan Pool (as of 8/31/14) Key Stats Status # $ • Through Aug. 2014, loan volume originated is 25% Requested 483 $5,832,499 higher than 2013 full year results Reserved 246 $17,484,166 $35.1M loaned to date: Loaned 828 $35,148,688 $14.3M in 2013 on 300 loans Loaned 828 $35,148,688 $12.6M in 2014 on 375 loans (Repayments) ($10,786,459) • 31% of loaned amounts have been repaid Net Loaned $24,362,229 • Aug. monthly repayments: $595k (YTD average: $595k/mo.) Loan Pool $50,500,000 • Average Loan: $42k (SMB $25k , Gov’t Agency $ 113k) Subscribed (Reserved + Net Loaned) ($41,846,395) • Net loaned amount increased by $3.4M, July-Aug. Remaining $8,653,605 Loaned Cust. Type # % $ % Avg. $ Final KWHs Final THERMS SMB 555 67% $14,029,419 40% $25,278 31,342,689 91,681 Gov't Agency 139 17% $15,752,773 45% $113,329 24,538,677 242,918 LCIA 134 16% $5,366,497 15% $40,048 22,381,980 53,951 Total 828 100% $35,148,688 100% $42,450 78,263,346 388,550 Reserved Cust. Type # % $ % Avg. $ Orig. KWHs Orig. THERMS SMB 167 20% $4,992,661 14% $29,896 1,385,443 - Gov't Agency 42 5% $11,418,927 32% $271,879 1,325,762 1,565 LCIA 37 4% $1,072,578 3% $28,989 744,860 - Total 246 30% $17,484,166 50% $71,074 3,456,065 1,565
“Barriers” with On Bill Financing Education about OBF advantages and process • Electeds, Staff, Financial, Legal Build in program timeline • Project approval, initiation • Incentive approval • Loan modification Lowering Barriers • Pre-approval process • Internally • Externally • Close communication • Utility Account Rep (specialists) and Contractor Start Small, Progressive Approach 6
OBR for State Agency Facilities • On-Bill Repayment (OBR) - New Statewide Pilot programs to support energy investments • Partnership between IOUs, CAEATFA, and CPUC • OBR allows lenders to originate loans and leases for energy measures with repayment on utility bill • Expected Launch 2 nd Qtr 2015 • Track progress at www.caleefinance.com OBF OBR Loan Size $5k-$250k Not limited : Based on Lender Requirements Lender PG&E/SCE/SCG/SDGE Private Financial Institution Underwriting Criteria Bill payment history Determined by Lender Loan Term Up to 10 years. Determined Flexible. Determined by by projected energy savings Lender Eligible Measures Energy Efficiency (EE) EE, Demand Response, Distributed Generation 7
Thank you! Mike Hackett NRG Answers, LLC Santa Barbara, CA 805.403.6450 mike@nrganswers.com CONTACT PG&E: Al Gaspari – Principal Program Manager • Energy Efficiency Financing Programs Michael Norbeck – Program Manager • On Bill Financing www.pge.com/eef eefinance@pge.com 8
RESOURCES Links to Utility Company OBF Programs • PG&E: pge.com/eef • Southern CA Edison: • https://www.sce.com/wps/portal/home/business/tools/on-bill-financing • So Cal Gas: • http://www.socalgas.com/for-your-business/rebates/zero-interest.shtml • SDG&E: http://www.sdge.com/business/bill-financing Other: 10/14/14 Paso Robles, 8-10AM PG&E Contractor Rebates 10/23/14 Fresno, 5-8PM, PG&E Contractor Financing 9
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