If you have any questions, comments or concerns, please feel free to contact me at any time.

Transcription

1 July 7, 2015 Dear Connecticut Green Bank Deployment Committee: We have a special meeting of the Deployment Committee scheduled for Tuesday, July 14, 2015 from 2:30 to 3:30 p.m. in the Colonel Albert Pope Board Room of the Connecticut Green Bank at 845 Brook Street, Rocky Hill, CT On the agenda we have the following items: - Commercial and Industrial Sector Programs we are bringing three (3) C-PACE transactions for your review and approval totaling about $1.5 million in financing for projects in New London, Newtown, and Stamford. - Statutory and Infrastructure Sector Programs now that the Governor s SHREC policy has passed, we are bringing forth our recommendations for the Residential Solar Investment Program (RSIP) incentives for Steps 8 through 10. Given our ongoing discussions with the Board to improve the adoption of solar PV for low to moderate income (LMI) customers, we are also recommending a special LMI performance based incentive. If you have any questions, comments or concerns, please feel free to contact me at any time. We hope that you are all enjoying your summers and look forward to seeing you next week. Sincerely, Bryan Garcia President and CEO

2 AGENDA Deployment Committee of the Connecticut Green Bank 845 Brook Street Rocky Hill, CT Tuesday, July 14, :30-3:30 p.m. Staff Invited: Mackey Dykes, Brian Farnen, Bryan Garcia, Dale Hedman, Bert Hunter, Kerry O Neill, and Genevieve Sherman 1. Call to order 2. Public Comments 5 minutes 3. Approval of Meeting Minutes for May 14, 2015* 4. Commercial and Industrial Sector Program Updates and Recommendations* 10 minutes a. C-PACE Transactions* i. New London C-PACE Transaction* ii. Newtown C-PACE Transaction* iii. Stamford C-PACE Transaction* 5. Statutory and Infrastructure Sector Program Updates and Recommendations* 40 minutes a. Residential Solar Investment Program (Steps 8 through 10) SHREC 6. August Special Meeting 5 minutes 7. Adjourn *Denotes item requiring Board action Join the meeting online at Or call in using your telephone: Dial (312) Access Code:

3 RESOLUTIONS Deployment Committee of the Connecticut Green Bank 845 Brook Street Rocky Hill, CT Tuesday, July 14, :30-3:30 p.m. Staff Invited: Mackey Dykes, Brian Farnen, Bryan Garcia, Dale Hedman, Bert Hunter, Kerry O Neill, and Genevieve Sherman 1. Call to order 2. Public Comments 5 minutes 3. Approval of Meeting Minutes for May 14, 2015* Resolution #1 Motion to approve the minutes of the Deployment Committee for May 14, 2015 Regular Meeting. 4. Commercial and Industrial Sector Program Updates and Recommendations* 10 minutes a. C-PACE Transactions* Resolution #2 i. New London C-PACE Transaction* WHEREAS, Pursuant to Section 157 of Public Act No of the June 12, 2012 Special Session of the Connecticut General Assembly and as amended (the Act ), the Green Bank is directed to, amongst other things, establish a commercial sustainable energy program for Connecticut, known as Commercial Property Assessed Clean Energy ( C-PACE ); WHEREAS, the Green Bank Board of Directors has approved a $40,000,000 C- PACE construction and term loan program; and WHEREAS, the Green Bank seeks to provide a $501,206 construction and (potentially) term loan under the C-PACE program to Crocker s Realty, LLC, the property owner of Crocker s Boatyard, New London, CT (the "Loan"), to finance the construction

4 of specified clean energy measures in line with the State s Comprehensive Energy Strategy and the Green Bank s Strategic Plan; NOW, therefore be it: RESOLVED, that the President of the Green Bank, and any other duly authorized officer of the Green Bank, is authorized to execute and deliver the Loan in an amount not to be greater than one hundred ten percent of the Loan amount with terms and conditions consistent with the memorandum submitted to the Deployment Committee dated July 7, 2015, and as he or she shall deem to be in the interests of the Green Bank and the ratepayers no later than 120 days from the date of Deployment Committee authorization; RESOLVED, that before executing the Loan, the President of the Green Bank and any other duly authorized officer of the Green Bank shall receive confirmation that the C- PACE transaction meets the statutory obligations of the Act, including but not limited to the savings to investment ratio and lender consent requirements; and RESOLVED, that the proper the Green Bank officers are authorized and empowered to do all other acts and execute and deliver all other documents and instruments as they shall deem necessary and desirable to effect the above-mentioned legal instrument. Resolution #3 ii. Newtown C-PACE Transaction* WHEREAS, Pursuant to Section 157 of Public Act No of the June 12, 2012 Special Session of the Connecticut General Assembly and as amended (the Act ), the Green Bank is directed to, amongst other things, establish a commercial sustainable energy program for Connecticut, known as Commercial Property Assessed Clean Energy ( C-PACE ); WHEREAS, the Green Bank Board of Directors has approved a $40,000,000 C- PACE construction and term loan program; and WHEREAS, the Green Bank seeks to provide a $470,710 construction and (potentially) term loan under the C-PACE program to Windmill Enterprises, LLC, the property owner of 30 Perks Lane, Newtown, CT (the "Loan"), to finance the construction of specified clean energy measures in line with the State s Comprehensive Energy Strategy and the Green Bank s Strategic Plan; NOW, therefore be it: RESOLVED, that the President of the Green Bank and any other duly authorized officer of the Green Bank, is authorized to execute and deliver the Loan in an amount not to be greater than one hundred ten percent of the Loan amount with terms and conditions consistent with the memorandum submitted to the Deployment Committee dated July 7, 2015, and as he or she shall deem to be in the interests of the Green Bank and the ratepayers no later than 120 days from the date of Deployment Committee authorization;

5 RESOLVED, that before executing the Loan, the President of the Green Bank and any other duly authorized officer of the Green Bank shall receive confirmation that the C- PACE transaction meets the statutory obligations of the Act, including but not limited to the savings to investment ratio and lender consent requirements; and RESOLVED, that the proper the Green Bank officers are authorized and empowered to do all other acts and execute and deliver all other documents and instruments as they shall deem necessary and desirable to effect the above-mentioned legal instrument. iii. Stamford C-PACE Transaction* Resolution #4 WHEREAS, pursuant to Section 157 of Public Act No of the June 12, 2012 Special Session of the Connecticut General Assembly and as amended (the Act ), the Connecticut Green Bank (Green Bank) is directed to, amongst other things, establish a commercial sustainable energy program for Connecticut, known as Commercial Property Assessed Clean Energy ( C-PACE ); WHEREAS, the Green Bank Board of Directors (the Board ) has approved a $40,000,000 C-PACE construction and term loan program; WHEREAS, the Green Bank seeks to provide a $540,710 construction and (potentially) term loan under the C-PACE program to First Presbyterian Church of Stamford, the building owner of 1101 Bedford Street, Stamford, Connecticut (the "Loan"), to finance the construction of specified clean energy measures in line with the State s Comprehensive Energy Strategy and the Green Bank s Strategic Plan; and WHEREAS, the Green Bank may also provide a short-term unsecured loan (the Feasibility Study Loan ) from a portion of the Loan amount, to finance the feasibility study or energy audit required by the C-PACE authorizing statute, and such Feasibility Study Loan would become part of the Loan and be repaid to the Green Bank upon the execution of the Loan documents. NOW, therefore be it: RESOLVED, that the President of the Green Bank, and any other duly authorized officer of the Green Bank, is authorized to execute and deliver the Loan in an amount not to be greater than one hundred ten percent of the Loan amount with terms and conditions consistent with the memorandum submitted to the Deployment Committee dated July 7, 2015, and as he or she shall deem to be in the interests of the Green Bank and the ratepayers no later than 120 days from the date of authorization by the Deployment Committee; RESOLVED, that before executing the Loan, the President of the Green Bank and any other duly authorized officer of the Green Bank shall receive confirmation that the C- PACE transaction meets the statutory obligations of the Act, including but not limited to the savings to investment ratio and lender consent requirements; and RESOLVED, that the proper the Green Bank officers are authorized and empowered to do all other acts and execute and deliver all other documents and instruments as they shall deem necessary and desirable to effect the above-mentioned legal instrument.

6 5. Statutory and Infrastructure Sector Program Updates and Recommendations* 40 minutes a. Residential Solar Investment Program (Steps 8 through 10) SHREC Resolution #5 WHEREAS, Public Act An Act Concerning the Encouragement of Local Economic Development and Access to Residential Renewable Energy (the Act ) requires the Connecticut Green Bank ( Green Bank ) to design and implement a Residential Solar Photovoltaic ( PV ) Investment Program ( Program ) that results in no more than three-hundred (300) megawatts of new residential PV installation in Connecticut before December 31, 2022 and creates a Solar Home Renewable Energy Credit ( SHREC ) requiring the electric distribution companies to purchase through 15- year contracts the Renewable Energy Credits ( RECs ); WHEREAS, as of June 26, 2015, the Program has thus far resulted in approximately eighty-two megawatts of new residential PV installation application approvals in Connecticut about 52 MW prior to January 1, 2015 and 26 MW after January 1, 2015 and when complete and commissioned will achieve about twenty-five percent of the target of three-hundred megawatts established per Public Act ; WHEREAS, pursuant to Conn. Gen Stat a, a renewable portfolio standard was established that requires that Connecticut Electric Suppliers and Electric Distribution Company Wholesale Suppliers obtain a minimum percentage of their retail load by using renewable energy; WHEREAS, real-time revenue quality meters are included as part of solar PV systems being installed through the Program that determine the amount of clean energy production from such systems as well as the associated RECs which, in accordance with Public Act will be sold to the Electric Distribution Companies through a master purchase agreement entered into between the Green Bank, Eversource Energy, and United Illuminating, and approved by the Public Utility Regulatory Authority; WHEREAS, pursuant to the Act, the Green Bank has prepared a declining incentive block schedule ( Schedule ) that offers direct financial incentives, in the form of the expected performance based buy down ( EPBB ) and performance-based incentives ( PBI ), for the purchase or lease of qualifying residential solar photovoltaic systems, respectively; and WHEREAS, pursuant to the Act, to address willingness to pay discrepancies between communities, the Green Bank will provide additional incentive dollars to improve the deployment of residential solar PV in low to moderate income communities. NOW, therefore be it: RESOLVED, that Board approves of the Schedule of Incentives as set forth in Tables 3 and 4 of the memo dated July 10, 2015 to achieve 90.0 MW of solar PV deployment over FY MW from Step 8, 30.0 MW from Step 9, and 30.0 from Step 10.

7 6. August Special Meeting 5 minutes 7. Adjourn *Denotes item requiring Board action Join the meeting online at Or call in using your telephone: Dial (312) Access Code:

8 Deployment Committee July 14, 2015

9 Deployment Committee Agenda Item #1 Call to Order

10 Deployment Committee Agenda Item #2 Public Comments

11 Deployment Committee Agenda Item #3 Approve Meeting Minutes for May 14, 2015

12 Deployment Committee Agenda Item #4 Commercial and Industrial Sector

13 Deployment Committee Agenda Item #4ai Commercial and Industrial Sector C-PACE New London

14 56 Howard Street, New London Ratepayer Payback $501,206 to install kw solar PV system PHOTO REDACTED Projected savings are 12,583 MMBtu versus $501,206 of ratepayer funds at risk. Ratepayer funds will be paid back in one of the following ways (a) through a take-out by a private capital provider at the end of construction (project completion); (b) subsequently, when the loan is sold down to a private capital provider; or (c) through receipt of funds from the City of New London as it collects the C-PACE benefit assessment from the property owner. 7

15 56 Howard Street, New London Terms and Conditions $501,206 construction loan at 5% and term loan set at a fixed 6% over the 20-year term $501,206 loan against the property Property valued at REDACTED Loan-to-value ratio equals REDACTED; Lien-to-value ratio equals REDACTED DSCR > REDACTED 8

16 56 Howard Street, New London The Five W s What? Receive approval for a $501,206 construction and (potentially) term loan under the C-PACE program to Crocker s Realty, LLC to finance the construction of specified energy upgrade When? Project to commence 2015 Why? Allow Green Bank to finance this C-PACE transaction, continue to build momentum in the market, and potentially provide term financing for this project until Green Bank sells it along with its other loan positions in C-PACE transactions. Who? Crocker s Realty, LLC, the property owner of 56 Howard Street, New London CT Where? 56 Howard Street, New London CT 9

17 56 Howard Street, New London Tear Sheet 10

18 56 Howard Street, New London Anticipated Green Bank Cash Flow CGB Pro Forma Project Basics Cash Flows Amount Financed $501,206 Date CEFIA $ Construction Period (years) 0.42 Jul 2015 $501,206 Term (years) 20 Nov 2015 $10,442 1 Jan 2016 $43,367 Construction Financing Rate 5.00% 2 Jan 2017 $43,367 Term Financing Rate 6.00% 3 Jan 2018 $43,367 4 Jan 2019 $43,367 Construction Interest Payment (bullet) $10,442 5 Jan 2020 $43,367 Yearly Debt Service Payments (made semi-annually) $43,367 6 Jan 2021 $43,367 7 Jan 2022 $43,367 8 Jan 2023 $43,367 9 Jan 2024 $43, Jan 2025 $43, Jan 2026 $43, Jan 2027 $43, Jan 2028 $43, Jan 2029 $43, Jan 2030 $43, Jan 2031 $43, Jan 2032 $43, Jan 2033 $43, Jan 2034 $43, Jan 2035 $43,367 11

19 56 Howard Street, New London Key Financial Metrics 12

20 Deployment Committee Agenda Item #4aii Commercial and Industrial Sector C-PACE Newtown

21 30 Pecks Lane, Newtown Ratepayer Payback $470,710 to install kw solar PV system PHOTO REDACTED Projected savings are 10,179 MMBtu versus $470,710 of ratepayer funds at risk. Ratepayer funds will be paid back in one of the following ways (a) through a take-out by a private capital provider at the end of construction (project completion); (b) subsequently, when the loan is sold down to a private capital provider; or (c) through receipt of funds from the Town of Glastonbury as it collects the C-PACE benefit assessment from the property owner. 14

22 30 Pecks Lane, Newtown Terms and Conditions $470,710 construction loan at 5% and term loan set at a fixed 6% over the 20-year term $470,710 loan against the property Property valued at REDACTED Loan-to-value ratio equals REDACTED; Lien-to-value ratio equals REDACTED DSCR > REDACTED 15

23 30 Pecks Lane, Newtown The Five W s What? Receive approval for a $470,710 construction and (potentially) term loan under the C-PACE program to Windmill Enterprises, LLC to finance the construction of specified energy upgrade When? Project to commence 2015 Why? Allow Green Bank to finance this C-PACE transaction, continue to build momentum in the market, and potentially provide term financing for this project until Green Bank sells it along with its other loan positions in C-PACE transactions. Who? Windmill Enterprises, LLC, the property owner of 30 Pecks Lane, Newtown CT Where? 30 Pecks Lane, Newtown CT 16

24 30 Pecks Lane, Newtown Tear Sheet 17

25 30 Pecks Lane, Newtown Key Financial Metrics 18

26 Deployment Committee Agenda Item #4aiii Commercial and Industrial Sector C-PACE Stamford

27 1101 Bedford Street, Stamford Ratepayer Payback $540,710 to convert from oil to natural gas & HVAC upgrades PHOTO REDACTED Projected savings are 6,830 MMBtus versus $540,710 of ratepayer funds at risk. Ratepayer funds will be paid back in one of the following ways (a) through a take-out by a private capital provider at the end of construction (project completion); (b) subsequently, when the loan is sold down to a private capital provider; or (c) through receipt of funds from the City of Stamford as it collects the C-PACE benefit assessment from the property owner. 20

28 1101 Bedford Street, Stamford Terms and Conditions $540,710 construction loan at 5% and term loan set at a fixed 5.70% over the 17-year term $540,710 loan against the property Property valued at REDACTED Loan-to-value ratio equals REDACTED; Lien-to-value ratio equals REDACTED DSCR > REDACTED 21

29 1101 Bedford Street, Stamford The Five W s What? Receive approval for a $540,710 construction and (potentially) term loan under the C-PACE program to First Presbyterian Church of Stamford to finance the construction of specified energy upgrade When? Project to commence 2015 Why? Allow Green Bank to finance this C-PACE transaction, continue to build momentum in the market, and potentially provide term financing for this project until Green Bank sells it along with its other loan positions in C-PACE transactions. Who? First Presbyterian Church of Stamford, the property owner of 1101 Bedford Street, Stamford CT Where? 1101 Bedford Street, Stamford CT 22

30 1101 Bedford Street, Stamford Tear Sheet 23

31 1101 Bedford Street, Stamford Anticipated Green Bank Cash Flow 24

32 1101 Bedford Street, Stamford Key Financial Metrics 25

33 Deployment Committee Agenda Item #5 Statutory and Infrastructure Sector Residential Solar Investment Program

34 RSIP Progress to Date Demand approved nearly 85 MW to date, of which over 55 MW from FY 2015 (more than triple FY 2014) Installed Costs reduced by almost 30% since 2011 (from $5.35/W to $3.75/W) Incentive reduced by almost 70% since 2011 (from $1.68/W to $0.53/W) Financing increase in use of financing products (i.e., more than 1,434 projects and $43.1 million in approved loans and leases in FY REFERENCES Note installed costs exclude Solar City.

35 RSIP Progress to Date Income Distribution by Census Tract Income Level (AMI) # of Census Tracts Tract Pop. # of Projects Projects per Capita Installed Capacity (kw) Installed Capacity per Capita Less than 60% , , % , , % ,379 2, , % ,320 3, , More than 120% 230 1,053,233 5, , Total 824 3,566,416 13, , For LMI to reach non-lmi market penetration, solar PV deployment in less than 60% AMI, 60-80% AMI, and % AMI would have to increase by approximately 10 times, 3 times and 2 times respectively 28 REFERENCES Note projects include both Connecticut Clean Energy Fund and Connecticut Green Bank.

36 SHREC Policy Overview Target establishes a new target from no less than 30 MW by the end of 2022 to no more than 300 MW by the end of 2022 SHREC establishes a solar home renewable energy credit (SHREC) whereby EDCs must purchase RECs from the CGB over a 15-year period at a price set by the CGB through a Master Purchase Agreement approved by PURA. SHREC price includes RSIP incentive and administrative costs, as well as costs of securitization. SHREC price can t exceed $50 (i.e., lesser of small ZREC or $5 less than ACP) and must decline over time. Permitting seeks to improve permitting processes in municipalities and lower soft costs 29

37 Proposed Steps 8 through 10 Structure and Launch Race to the Rooftop BOD approved 90 MW of RSIP in FY 2016 Establishes race to the rooftop targets of 30 MW each for Steps 8 through 10 for a total of 90 MW Establishes 4.5 MW for LMI market segment (i.e., less than 100% of AMI) Launch Step 8 to begin on August 7, 2015 (i.e., three weeks following BOD approval notice to installers), and Steps 9 and 10 to immediately follow conclusion of race to the rooftop of prior step. 30

38 Proposed Steps 8 through 10 Schedule of Incentives RSIP Incentive Step EPBB ($/W) PBI ($/kwh) 5 kw 5 to 10 kw >10 kw 10 kw >10 kw Step 6 $0.675 $0.400 $0.080 $0.060 Step 7 $0.540 $0.400 $0.064 $0.060 Step 8 $0.540 $0.400 $0.054 $0.054 Step 9 $0.513 $0.400 $0.046 $0.046 Step 10 $0.487 $0.400 $0.039 $0.039 The estimated RSIP incentives at an equivalent 15-year price ($/REC) is $22-$33 for Step 8, $19-$32 for Step 9, and $16- $30 for Step REFERENCES Note SHREC applies to projects approved after January 1, 2015, which begins at Step 6.

39 Proposed Steps 8 through 10 Schedule of Incentives LMI PBI RSIP Incentive Step 10 kw LMI PBI ($/kwh) >10 kw Step 8 $0.110 $0.055 Step 9 $0.110 $0.055 Step 10 TBD TBD LMI PBI established at these levels to support Boardapproved PosiGen investment and to reduce overall energy burden for <100% AMI households. 32

40 Reduction in Energy Burden Focus on 80% AMI Home (New Haven Oil Heat) Solar PV Energy Efficiency + + $59,250 HHI $2,963 Energy Costs % HHI on Energy Costs $85/month Lease $427 Energy Savings 4.3% HHI on Energy Costs $15/month ESA Energy Savings High Savings Low Savings $543 $70 3.4% HHI 4.2% HHI on Energy Costs REFERENCES Note analysis examines 20-year lease for a 6-kW system at an $85 monthly cost and an additional $15 for energy efficiency measures through a 20-year energy savings agreement with low (i.e., HES core services) and high (i.e., HES core services plus insulation) expected energy savings. Based on oil-heated home in New Haven.

41 Reduction in Energy Burden Solar PV Lease and EE ESA Income Level (AMI) HH Income Avg. HH Energy Costs % Income Spent on Energy (Before) Solar Lease Savings EE Savings (Low-High) % Savings Energy Costs % Income Spent on Energy (After) 60% $45,060 $2, $423 $70-$ % % $59,250 $2, $427 $70-$ % % $75,250 $3, $425 $70-$ % % $90,072 $3, $308 $70-$ % This analysis demonstrates that even a 60% AMI household could achieve the same percent of income being spent on energy after going solar and installing a higher energy efficiency package as the starting energy burden of a 120% AMI household. 34 REFERENCES Note analysis examines 20-year lease for a 6-kW system at an $85 monthly cost and an additional $15 for energy efficiency measures through a 20-year energy savings agreement with low (i.e., HES core services) and high (i.e., HES core services plus insulation) expected energy savings. Based on oil-heated home in New Haven.

42 Overall Strategy Multipronged Multifamily and Low Income PosiGen Partnership solar lease ($85/month) and energy efficiency ESA ($15/month) product for LMI homeowners supported by $5-$10 MM investment from CGB CHIF Partnership assisting CHIF in selling down $12-$14 MM portfolio and recapitalizing ($10-$11 MM) for focus on credit challenged homeowners (i.e., < 680 FICO) through $1.5-$2.5 MM investment; supporting MF line loan with $1.3 MM CHFA Partnership Solarize for state-sponsored housing portfolio has seen 20 projects in 12 housing authorities get ZREC contracts supporting benchmarking of 500+ affordable multifamily buildings MacArthur Foundation Partnership supporting predevelopment, construction, and term loans for affordable MF through $5 MM PRI Future Strategies community/shared solar policy, sub-metering, etc. to further support low income rental populations 35

43 Recommendation RSIP Steps 8 through 10 Race to the Rooftop 30 MW blocks for Steps 8 through 10, with a 4.5 MW block for LMI (considering higher capacity for LMI?) Schedule of Incentives non-lmi for EPBB and PBI for Steps 8 through 10 and LMI PBI for Steps 8 through 9 (Step 10 is TBD) 36

44 Deployment Committee Agenda Item #6 August Special Meeting

45 Funding Requests below $300,000 Project Name Comprehensive Plan Amount Type Earth Place C-PACE (EERE) $170,713 Benefit Assess. Sheffield Pharmaceuticals C-PACE (Natural Gas) $160,718 Benefit Assess. Total $331,431 Approximately $330,000 in loans Note we wanted to notice you that we plan on calling a special meeting in August of 2015 to recommend the review and approval of several C-PACE transactions 38

46 Deployment Committee Agenda Item #7 Adjourn

47 DEPLOYMENT COMMITTEE OF THE CONNECTICUT GREEN BANK Draft Minutes Regular Meeting Thursday, May 14, :00-4:00 p.m. A regular meeting of the Deployment Committee of the Board of Directors of the Connecticut Green Bank was held on May 14, 2015 at the office of the Green Bank, 845 Brook Street, Rocky Hill, CT. 1. Call to Order: Mr. Hundt noting the presence of a quorum, called the Deployment Committee Meeting to order at 3:05 p.m. Deployment Committee members participating: Patricia Wrice, Matt Ranelli (by phone), Bettina Ferguson (by phone), Reed Hundt (by phone). Reed Hundt asked Bryan Garcia to preside over the meeting. Staff Attending: Dale Hedman, Genevieve Sherman, Cheryl Samuels, Rick Ross, Bryan Garcia, Brian Farnen, Alysse Buzzelli. 2. Public Comments: There were no public comments. 3. Approval of meeting minutes for March 3, 2015: The Deployment Committee members were asked to consider the minutes from the March 3, 2015 Meeting. Upon a motion made by Matt Ranelli, seconded by Reed Hundt, with an abstention from Bettina Ferguson, Deployment Committee members voted in favor of adopting the minutes from the March 3, 2015 Meeting as presented. 4. Commercial and Industrial Sector Program Updates and Recommendations: C-PACE Transactions i. Bridgeport C-PACE Transaction Resolution #2 Genevieve Sherman highlighted the Bridgeport C-PACE transaction, 200 Cogswell Road. She advised that this is their first project with GM Industries. She explained that financing will be for a 10 year term at a 5% rate.

48 DEPLOYMENT COMMITTEE 5/14/15 Draft Meeting Minutes WHEREAS, pursuant to Section 157 of Public Act No of the June 12, 2012 Special Session of the Connecticut General Assembly and as amended (the Act ), the Connecticut Green Bank ( Green Bank ) is directed to, amongst other things, establish a commercial sustainable energy program for Connecticut, known as Commercial Property Assessed Clean Energy ( C-PACE ); WHEREAS, the Green Bank Board of Directors (the Board ) has approved a $40,000,000 C-PACE construction and term loan program; WHEREAS, the Green Bank seeks to provide a $386,128 construction and (potentially) term loan under the C-PACE program to Cogswell- Bridgeport, LLC, the building owner of 200 Cogswell Street, Bridgeport, Connecticut (the Loan ), to finance the construction of specified clean energy measures in line with the State s Comprehensive Energy Strategy and the Green Bank s Strategic Plan; and WHEREAS, the Green Bank may also provide a short-term unsecured loan (the Feasibility Study Loan ) from a portion of the Loan amount, to finance the feasibility study or energy audit required by the C-PACE authorizing statute, and such Feasibility Study Loan would become part of the Loan and be repaid to the Green Bank upon the execution of the Loan documents. NOW, therefore be it: RESOLVED, that the President of the Green Bank and any other duly authorized officer of the Green Bank is authorized to execute and deliver the Loan and, if applicable, a Feasibility Study Loan in an amount not to be greater than one hundred ten percent of the Loan amount with terms and conditions consistent with the memorandum submitted to the Board dated May 7, 2015, and as he or she shall deem to be in the interests of the Green Bank and the ratepayers no later than 120 days from the date of authorization by the Deployment Committee; RESOLVED, that before executing the Loan, the President of the Green Bank and any other duly authorized officer of the Green Bank shall receive confirmation that the C-PACE transaction meets the statutory obligations of the Act, including but not limited to the savings to investment ratio and lender consent requirements; and RESOLVED, that the proper the Green Bank officers are authorized and empowered to do all other acts and execute and deliver all other 2

49 DEPLOYMENT COMMITTEE 5/14/15 Draft Meeting Minutes documents and instruments as they shall deem necessary and desirable to effect the above-mentioned legal instruments. ii. Glastonbury C-PACE Transaction Genevieve Sherman highlighted the Glastonbury C-PACE transaction, 259 Eastern Boulevard. She advised that this transaction is slightly over the LTV of 80%, but that they expect that this will be in line as they move forward. She advised that they will monitor the disbursements to keep this project within the guidelines of the 80% LTV. The financing will be over a 20- year term with a 6% rate. Resolution #3 WHEREAS, pursuant to Section 157 of Public Act No of the June 12, 2012 Special Session of the Connecticut General Assembly and as amended (the Act ), the Connecticut Green Bank ( Green Bank ) is directed to, amongst other things, establish a commercial sustainable energy program for Connecticut, known as Commercial Property Assessed Clean Energy ( C-PACE ); WHEREAS, the Green Bank Board of Directors (the Board ) has approved a $40,000,000 C-PACE construction and term loan program; WHEREAS, the Green Bank seeks to provide a $340,309 construction and (potentially) term loan under the C-PACE program to Eastern Ave Holdings, LLC, the building owner of 259 Eastern Boulevard, Glastonbury, Connecticut (the Loan ), to finance the construction of specified clean energy measures in line with the State s Comprehensive Energy Strategy and the Green Bank s Strategic Plan; and WHEREAS, the Green Bank may also provide a short-term unsecured loan (the Feasibility Study Loan ) from a portion of the Loan amount, to finance the feasibility study or energy audit required by the C-PACE authorizing statute, and such Feasibility Study Loan would become part of the Loan and be repaid to the Green Bank upon the execution of the Loan documents. NOW, therefore be it: RESOLVED, that the President of the Green Bank and any other duly authorized officer of the Green Bank is authorized to execute and deliver the Loan and, if applicable, a Feasibility Study Loan in an amount not to be greater than one hundred ten percent of the Loan amount with terms and conditions consistent with the memorandum submitted to the Board 3

50 DEPLOYMENT COMMITTEE 5/14/15 Draft Meeting Minutes dated May 6, 2015, and as he or she shall deem to be in the interests of the Green Bank and the ratepayers no later than 120 days from the date of authorization by the Deployment Committee; RESOLVED, that before executing the Loan, the President of the Green Bank and any other duly authorized officer of the Green Bank shall receive confirmation that the C-PACE transaction meets the statutory obligations of the Act, including but not limited to the savings to investment ratio and lender consent requirements; and RESOLVED, that the proper the Green Bank officers are authorized and empowered to do all other acts and execute and deliver all other documents and instruments as they shall deem necessary and desirable to effect the above-mentioned legal instruments. iii. Westport C-PACE Transaction Genevieve Sherman highlighted the Westport C-PACE transaction, 500 Post Road East. She explained that this project is both solar and energy efficiency upgrade including, lighting, HVAC, and windows. She advised that this project is very close to 1 for savings to investment ratio. The financing on this project is for a 20-year term at a rate of 6%. Resolution #4 WHEREAS, Pursuant to Section 157 of Public Act No of the June 12, 2012 Special Session of the Connecticut General Assembly and as amended (the Act ), the Connecticut Green Bank (Green Bank) is directed to, amongst other things, establish a commercial sustainable energy program for Connecticut, known as Commercial Property Assessed Clean Energy ( C-PACE ); WHEREAS, the Green Bank Board of Directors (the Board ) has approved a $40,000,000 C-PACE construction and term loan program; WHEREAS, the Green Bank seeks to provide a $985,060 construction and (potentially) term loan under the C-PACE program to French Post Road East LLC, the building owner of 500 Post Road East, Westport, Connecticut (the Loan ), to finance the construction of specified clean energy measures in line with the State s Comprehensive Energy Strategy and the Green Bank s Strategic Plan; and WHEREAS, the Green Bank may also provide a short-term unsecured loan (the Feasibility Study Loan ) from a portion of the Loan amount, to finance the feasibility study or energy audit required by the C-PACE 4

51 DEPLOYMENT COMMITTEE 5/14/15 Draft Meeting Minutes authorizing statute, and such Feasibility Study Loan would become part of the Loan and be repaid to the Green Bank upon the execution of the Loan documents. NOW, therefore be it: RESOLVED, that the Deployment Committee of the Connecticut Green Bank is authorized to execute and deliver the Loan in an amount not to be greater than one hundred ten percent of the Loan amount with terms and conditions consistent with the memorandum submitted to the Board dated May 7, 2015, and as he or she shall deem to be in the interests of the Green Bank and the ratepayers no later than 120 days from the date of authorization by the Deployment Committee; RESOLVED, that before executing the Loan, the President of the Green Bank and any other duly authorized officer of the Green Bank shall receive confirmation that the C-PACE transaction meets the statutory obligations of the Act, including but not limited to the savings to investment ratio and lender consent requirements; and RESOLVED, that the proper the Green Bank officers are authorized and empowered to do all other acts and execute and deliver all other documents and instruments as they shall deem necessary and desirable to effect the above-mentioned legal instrument. Bryan Garcia asked if there were any questions or concerns regarding the C- PACE updates. Reed Hundt inquired as to whether or not there were any trends. Genevieve Sherman answered that there seems to be a trend toward C-PACE combos of energy efficiency and solar installations. She explained that with the 20 year financing this trend should continue. Reed Hundt asked how customers locate a solar installer. Genevieve Sherman explained that solar installers are very proactive in terms of marketing. She explained that they are doing a lot of cold calling and door-to-door to locate customers. She also advised that some of the customers locate installers through the Green Bank. Pat Wrice was interested in learning a bit about the coordination between solar and energy efficiency. Genevieve Sherman explained that the coordination is deliberate. She explained that the cash flow for solar is more front-loaded, and then combining the flat savings it makes sense for the coordination. It makes it easier to upsell showing the economics. Matt Ranelli asked how they are making sure that the properties are not environmentally impaired. Genevieve Sherman explained that in closing they require the property owner to disclose any issues. Brian Farnen advised that our agreements include all customary reps and 5

52 DEPLOYMENT COMMITTEE 5/14/15 Draft Meeting Minutes warranties, our in-depth technical review could potentially bring red flags to light and they could also be found through the title search. Genevieve Sherman advised that they must disclose any issues. Matt Ranelli explained that his concern was that many environmental issues could predate and could quickly erase any value on the property. He inquired as to whether or not an environmental insurance policy on the whole portfolio would be an option. Brian Farnen advised that insurance policies such as this are not typically economical because of the uniqueness of each deal and the fact that we sell off our portfolio of loans. He advised that he would look into this further. Bryan Garcia advised that they would add this to the tasks. 5. Statutory and Infrastructure Sector Program Updates and Recommendations: i. Milford Anaerobic Digestion Rick Ross provided updates on the Anaerobic Digestion project in Milford. Rick Ross explained that the cost estimate is $23 million. He advised that GE will be providing $3 million, $1 million provided by others, and the Green Bank will be loaning approximately $4.5 million. Rick Ross explained that the facility will process 60,000 tons of food and other organic scraps annually. The system will produce approximately 24,500 MWh of electricity annually. The digester will produce 11,000 tons of biogas annually. The system will separate 95% of the organics from any contaminants. He explained that the pilot program allows for up to 5 projects to be built. He advised that at this point there have been 4 projects approved. He advised that they are planning to bring this project to the Board for approval at the June 19, 2015 meeting. ii. New Britain Combined Heat and Power Rick Ross provided updates on the Combined Heat and Power project in New Britain. Rick Ross explained that the system would produce 14,500 MWh of electricity and 23,000 MMBtu s of heat annually. He also touched on the fact that there will be a 400-ton absorption chiller that will enable existing electric chillers to be used as backup. He explained that this would save 1,000,000 kwh of electric usage. Rick Ross explained that the project cost estimate is $5 million, of which $1 million will come from the Green Bank and an additional $1 million from the owners and partners. Rick Ross advised that the 3-year pilot program administered by the Green Bank has expired. Rick Ross also advised that the Board has approved 6 projects to date. He explained that they are planning to bring this project to the Board for approval at the June 19, 2015 meeting. 6

53 DEPLOYMENT COMMITTEE 5/14/15 Draft Meeting Minutes Bettina Ferguson asks what happens to the contaminants. Rick Ross advised that any contaminants would be hauled off. Pat Wrice questioned if the information will be ready for the June 19, 2015 meeting. Rick Ross confirmed that it would be ready for the meeting. Bryan Garcia advised that a special meeting could be organized if needed, prior to the June 19, 2015 meeting. Bryan Garcia also stated that they could have a call two weeks prior to the meeting to make sure everything is ready for the meeting and for any questions. He advised that they could go to the Board from there with any additional questions or concerns. Bryan and Rick will send out draft materials and set up an optional call for Deployment Committee members two weeks in advance of the Board of Directors meeting in case they have questions on these two transactions. 6. Other Business: Bryan Garcia updated the Board on 6 projects for approval below $300,000. He advised that they could leave the policy as is, up to $1 million in aggregate or increase the aggregate to $1.5 million. He advised that there are typically 6 Deployment meetings annually. He explained that they are looking to do $50 million in C-PACE projects and that they may run into limitations if it is kept at $1 million. Bryan Garcia also explained the other options. If there are no material deviations from the standard underwriting and technical review they can just do a general report at the next Deployment Committee meeting. The last option was to do a report to the Board and the Deployment Committee Chairs at specific intervals. Matt Ranelli advised that if the meetings were spaced out regularly that he has no objections to raising the aggregate to $1.5 million. Bettina Ferguson advised that she too would like to bump the aggregate to $1.5 million. Bryan Garcia stated that this would allow for 3 5 more deals to be approved between meetings. Reed Hundt explained that this would allow for greater flexibility between meetings. He advised that they could put a cap to a specific amount, and that if there are any issues they can reduce the levels. Pat Wrice asked how often do they hit the $1 million threshold and does $1.5 million provide enough space. Bryan Garcia stated that in the winter the projects slow down. He stated that it s more of a seasonal issue and $1.5 million will allow them to move along. Pat Wrice suggested approval of the $1.5 million and suggested that they revisit this in a couple of months. Upon a motion made by Pat Wrice and seconded by Bettina Ferguson the Committee Members voted unanimously in favor. Resolution #5 7

54 DEPLOYMENT COMMITTEE 5/14/15 Draft Meeting Minutes WHEREAS, pursuant to Section of the Green Bank Bylaws, the Green Bank Deployment Committee has been granted the authority to evaluate and approve funding requests between $300,000 and $2,500,000; WHEREAS, on June 24, 2014, the Board of Directors authorized Green Bank staff to evaluate and approve funding requests less than $300,000 which are pursuant to an established formal approval process requiring the signature of a CEFIA officer, consistent with the Green Bank Comprehensive Plan, approved within Green Bank s fiscal budget and in an aggregate amount not to exceed $1,000,000 from the date of the last Deployment Committee meeting ( Staff Approval Policy for Projects Under $300,000 ). NOW, therefore be it: RESOLVED, that the Green Bank Deployment Committee hereby recommends that the Board of Directors adopt a resolution amending the Staff Approval Policy for Projects Under $300,000 to increase the aggregate amount for staff authorization from $1,000,000 to $1,500, Adjournment: Upon a motion made by Reed Hundt, seconded by Bettina Ferguson the Deployment Committee Members voted unanimously in favor or adjourning the meeting at 3:46 p.m. Respectfully submitted, Reed Hundt, Chairperson of the Deployment Committee 8

55 DEPLOYMENT COMMITTEE 5/14/15 Draft Meeting Minutes 9

56 Crocker s Boatyard: A C-PACE Project in New London, CT Address 56 Howard St, New London, CT Owner Crocker s Realty, LLC. Proposed Assessment $501,206 (1) Term (years) 20 Term Remaining (months) Pending construction completion Annual Interest Rate 6% Annual C-PACE Assessment $43,367 Savings-to-Investment Ratio 1.16 Average Debt-Service Coverage Ratio Lien-to-Value Ratio Total Loan-to-Value Ratio RE Projected Energy Savings Per year 658 MMBtu Over term of loan 12,583 MMBtu Estimated Cost Savings (incl. ZRECs and tax benefits) Per year $50,036 Over term of loan $1,000,716 Objective Function 25.1 kbtu / ratepayer dollar at risk Location City of New London, New London County Type of Building Warehouse Year of Build 1978 Building Size (sf) 32,210 sq. ft. Year Acquired by Current Owner 2003 As-Is Appraised Value Estimated As-Complete Value Status of Mortgage Lender Consent Proposed Project Description Est. Date of Construction Completion Current Status Energy Contractor kw roof mount Solar PV, Cool Roof Pending closing Awaiting Deployment Committee approval of financing amount Notes 2

57 30 Pecks Lane: A C-PACE Project in Newtown, CT Address 30 Pecks Lane, Newtown, CT Owner Windmill Enterprises, LLC Proposed Assessment $470,710 (1) Term (years) 20 Term Remaining (months) Pending construction completion Annual Interest Rate 6% Annual C-PACE Assessment $40,728 Savings-to-Investment Ratio 1.42 Average Debt-Service Coverage Ratio Lien-to-Value Ratio Total Loan-to-Value Ratio RE Projected Energy Savings Per year 724 MMBtu Over term of loan 13,845 MMBtu Estimated Cost Savings (incl. ZRECs and tax benefits) Per year $57,621 Over term of loan $1,152,419 Objective Function 29.4 kbtu / ratepayer dollar at risk Location City of Newtown, Fairfield County Type of Building Industrial Year of Build 1997 Building Size (sf) 60,720 sq. ft. Year Acquired by Current Owner 2013 As-Is Appraised Value Status of Mortgage Lender Consent Proposed Project Description Est. Date of Construction Completion Current Status Energy Contractor Notes kw roof mount Solar PV Pending closing Awaiting Deployment Committee Approval 2

58 First Presbyterian Church: A C-PACE Project in Stamford, CT Address Owner Proposed Project Description 1101 Bedford Street, Stamford CT First Presbyterian Church of Stamford Oil to Gas Conversion and HVAC upgrade Proposed C-PACE Assessment $540,710 Assessment Term (years) 17 Term Remaining (months) Pending Construction Completion Annual Interest Rate 5.7% Annual C-PACE Assessment $50,085 Savings-to-Investment Ratio 1.01 Average Debt-Service Coverage Ratio Loan-to-Value Ratio Projected Energy Savings (mmbtu) Estimated Cost Savings Objective Function Location Type of Building EE Total Per year Life Cycle 6,830 6,830 Per year ($) $50,591 $50,591 Over Term ($) $860,041 $860, kbtu per ratepayer dollar at risk City of Stamford Worship Year of Build Building Size (total sf) 51,200 Year Acquired by Current Owner 1940 Assessed Value Status of Mortgage Lender Consent Est. Date of Construction Completion Current Status Pending closing Pending CT Green Bank Deployment Committee Approval Energy Contractors Additional Comments

59 Memo To: Board of Directors of the Connecticut Green Bank From: Bryan Garcia, Dale Hedman, and Kerry O Neill Date: July 10, 2015 Re: Residential Solar Investment Program Steps 8 through 10 Recommendations Background On March 2, 2012, the Connecticut Green Bank launched the Residential Solar Investment Program ( RSIP ). Per Section 106 of Public Act (now codified at Connecticut General Statute Sec ff), the RSIP required that a minimum of 30 MW of new residential solar PV be installed in Connecticut on or before December 31, 2022, at a reasonable payback to the customer all the while developing a sustainable market for contractors. The RSIP provides to residential customers, via solar PV contractors, direct financial incentives in the form of a onetime expected performance-based buy-down ( EPBB ) or a 6-year performance-based incentive ( PBI ) for the purchase and/or lease of qualifying PV systems respectively. The success of the RSIP over its first three years resulted in an improvement to the policy in the 2015 legislative session. As a result of the leadership of Governor Malloy, Public Act An Act Concerning the Encouragement of Local Economic Development and Access to Residential Renewable Energy was passed with bipartisan support. The improved policy includes, but is not limited to the following: Target resets the goal from no less than 30 MW to no more than 300 MW a tenfold increase from PA 11-80; SHREC establishes a Solar Home Renewable Energy Credit (SHREC) whereby the EDCs must purchase RECs from and at a price 1 set by the Connecticut Green Bank over 15 years through a master purchase agreement approved by the Public Utility Regulatory Authority. The policy takes effect January 1, 2015 with Step 6 of the RSIP; and Permitting incorporates the desire for municipalities to improve permit processing to lower soft costs of solar PV systems. To date, through the RSIP, we have approved, in progress, and completed over 80 megawatts of projects while reducing the level of subsidies by nearly 80 percent since 2012 through seven steps see Table 1. About 40 percent (or 32 MW) of the installations are homeownership. 1 The price shall not exceed the lesser of the small ZREC or $5 below the alternative compliance payment of the Class I RPS 1

60 Table 1. Installed Capacity by Step for Approved, In Progress, or Completed Projects (as of June 26, 2015) RSIP Incentive Step Approved (kw) In Progress (kw) Completed (kw) Total (kw) Average Incentive ($/WSTC) Step ,170 1,187 $1.78 Step ,194 6,194 $1.64 Step ,000 13,235 $1.23 Step 4 3,111 1,011 16,401 20,523 $1.03 Step 5 5, ,056 14,925 $0.75 Step 6 10,014 1,362 2,815 14,191 $0.51 Step 7 11, ,921 $0.39 Total 30,508 3,929 47,738 82,175 $0.89 More than 56 MW of solar PV deployment were the result of Steps 1 through 5, while about 26 MW of solar deployment will result from Steps 6 and 7. 2 The investment of over $360 million in residential solar PV in Connecticut through the RSIP to date has created nearly 5,600 job-years (i.e., 2,142 direct and 3,449 indirect and induced) and will reduce over 1 MTCO 2 emissions over the 25-year life of the projects. Of the more than 13,000 projects approved under the Connecticut Green Bank s RSIP and Connecticut Clean Energy Fund s Small Solar Program, the following penetration rates were achieved in census tracts with the following area medium incomes (AMI) (see Table 2). Income Level (AMI) Table 2. Statewide Residential Solar PV Deployment by Income Level and Census Tract # of Census Tracts Tract Population # of Projects Projects per Capita Installed Capacity 3 (kw) Installed Capacity per Capita Less than 60% , , % , , % ,379 2, , % ,320 3, , More than 120% 230 1,053,233 5, , Total 824 3,566,416 13, , This data suggests that residential solar PV is predominantly deployed in moderate and higher income communities in Connecticut about 25% of the market is less than 100% AMI or the low-to-moderate (LMI) market. Another way to look at the challenge of solar PV adoption in the LMI market is that the markets for residential solar PV in the 60-80% AMI and % AMI bands would need to triple and double respectively in order to be the same on a per capita basis as 100% AMI and above. The Board of Directors and Staff of the Connecticut Green Bank seek to improve the deployment of residential solar PV in low to moderate income communities. 4 As outlined previously to the Board, there are a variety of tools and strategies for achieving deeper penetration of solar in LMI communities, including enactment of a community (or shared) solar 2 It should be noted that Section 106 of PA applies to Steps 1 through 5 of the RSIP, while PA applies to Steps 6 and beyond projects approved after January 1, Note that lower income bands have a smaller average installed system size than higher income bands: 5.8 kw for <60% AMI, 6.5 kw for 60-80%, 6.8 kw for %, 7.4 kw for %, 7.7 kw for >120%. 4 See Market Analysis of Residential Solar Deployment and Housing Characteristics of CT s Low Income Sector memo to the Board of Directors on December 12,