Qualified Energy Conservation Bonds (GEC BS)

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  • 1. 2 The Tennessee Department of Environment and Conservation through its Office of Energy Programs is proud to launch a new Energy Education Initiative which will be delivered in conjunction with Pathway Lending and other statewide energy resource providers. This Initiative provides in depth training along with educational tools to support the implementation of energy efficiency, renewable energy and energy management projects. Funding for the Energy Education Initiative is provided by the Department of Energy through the American Reinvestment and Recovery Act. As a result, the program will be able to provide “tuition paid” workshops and conferences at many locations throughout the state over the next several months. Some will focus on very specific topics such as multi-family housing or industrial energy efficiency while others will have a broader approach to Sustainability. At each of these events, the presentations and materials will be recorded and made available for all Tennessee companies to access through an Online Resource Center to launch later in the year. Acknowledgment: This project is funded under an agreement with the State of Tennessee. This material is based upon work supported by the Department of Energy under Award Number DE-EE0000160. CFDA 81.041.
  • 2. Date Event City 2-May Tennessee Chamber of Commerce and Industry Manufacturing Excellence Conference Nashville 2-May & 3-May Baker Center Electric Vehicle Symposium Knoxville 8-May Chattanooga Manufacturers Association Energy Efficiency Conference Chattanooga 17-May TREEDC Bethel University McKenzie 6-Jun TVA Preferred Partners Network Webinar Online 12-Jun TREEDC Columbia State College Franklin 13-Jun Business & Industry Energy Workshop Clarksville 26-Jun & 27-Jun Memphis and Shelby County Sustainability Summit Memphis 9-Jul TREEDC Austin Peay State University Clarksville 17-Jul & 18-Jul Industrial Energy Efficiency Summit Nashville 25-Jul National Association of Women Business Owners - Nashville Chapter - Focus on Energy Efficiency Nashville 26-Jul TREEDC Tennessee Tech University Cookeville 21-Aug & 22-Aug Oak Ridge National Laboratory Southeast Sustainability Summit Knoxville July/Aug Business & Industry Energy Workshop East TN July/Aug Business & Industry Energy Workshop West TN 22-Sep thru 24-Sep American Council National Conference on Energy Efficiency Nashville 3 Calendar of Events
  • 3. TNEnergy.org
  • 4. Qualified Energy Conservation Bonds Katie Southworth Program Manager TDEC Office of Energy Programs
  • 5. 7 QECB Background • Low interest bonds for qualified energy projects • Initially created by Congress in 2008; greatly expanded by ARRA in 2009 • Total national allocation is $3.2 billion; Tennessee allocation is $64,676,000 • 1%-5% effective interest rate for issuer • Issuer gets 3%-4% subsidy from Treasury • 15 to 22-year term • Qualified projects are broadly defined
  • 6. 8 Large Local Government Allocations • Large Local Governments in Tennessee receive a share of the $64.7 million based on their percentage of the Tennessee population - Cities with populations of 100,000 or more - Counties with populations of 100,000 or more, not including any cities within the county that are large local governments • 15 entities in Tennessee received allocations.
  • 7. 9 QECB Qualified Projects: • Capital expenditures incurred for purposes of: - Reducing energy consumption in publicly-owned buildings by at least 20 percent - Implementing green community programs (including the use of loans, grants, or other repayment mechanisms to implement such programs) - Rural development involving the production of electricity from renewable energy resources - Certain research facilities and research grants - Mass commuting facilities - Demonstration projects In Tennessee, bonds can only be issued if physical asset development or improvement is critical component of project
  • 8. 10 Quick Aside: Energy Savings Performance Contracts • Also called Guaranteed Energy Savings Contracts with energy service companies (ESCOs) • Contract for the evaluation, recommendation, or implementation of energy conservation measures • Payments made over time • Energy savings guaranteed to exceed costs
  • 9. 11 Allegheny County, PA: Municipal Building Efficiency Improvements • $9.3 million QECB for energy efficiency improvements to County Jail and Regional Center, annual positive cash flow of $1.56 million • Upgrades included: Lighting & HVAC upgrades, new waste disposal system and domestic water pumping upgrades for the jail, and water upgrades & new high efficiency boilers for the regional center Initial guaranteed energy savings agreement project (both buildings) $14,186,509 EECBG (Energy Efficiency and Conservation Block Grant) $4,848,602 QECB $9,337,907 1st year annual guaranteed energy savings (Starting 2012) $2,107,866 1st year payment (Starting 2012) ($523,994) Measurement and verification service payment ($24,219) 1st year annual positive cash flow $1,559,653
  • 10. 12 Yolo County, CA: 1 MW solar photovoltaic (PV) to supply power to both a jail and juvenile center – Finance was a mix of new CREBs, QECBs, a California Energy Commission (CEC) loan, a Pacific Gas and Electric (PG&E) rebate, and a Tax Exempt Lease Program (TELP) loan – 3.9 percent interest rate with a 15 year tenor for QECBs – Yolo is anticipating that it will have a net positive cash flow of $100,000 per year starting in year 1 and $600,000 per year starting in year 16 in utility expenditures
  • 11. 13 • OEP will evaluate requests for QECB allocations through a competitive process in October. • Local governments and state universities will be eligible to apply.
  • 12. Thank You 14 OEP Energy Hotline: 615-741-2994 TDEC OEP Website http://www.tn.gov/environment/energy/qualified-energy-conservation-bonds.shtml Katie Southworth Program Manager TDEC Office of Energy Programs
  • 13. 15