Today, Former President-Bill Clinton was in Albany speaking to business leaders in an effort to promote Gov. Andrew Cuomo (his former HUD Secretary), New York, and to an extent the Obama Administration policies. 2 of the 3 need the boost in popularity that President Clinton provides when he speaks.
As 2010 Census recordss show, New York has continued to lose population and businesses. It is a loss that started in the 1950’s and has not abated since. The latest reduction has cost uncalculated numbers of jobs and tax revenue, as well as reducing the importance of New York in national politics. With the 2012 election looming in the distance, efforts to rally the highly Democrat (due to New York City) State and promote the positively viewed Governor are essential to maintaining power in NY. Especially after the disaterous blow to Democrats in losing the NY-9 congressional seat to Republicans in the recent special election.
President Clinton spoke at length, with an emphasis on “green” technology and it’s potential for New York. The comments seem determined to alter the current view on the initiative, which is highly influenced with the scandal of Solyndra. It also bolsters President Obama’s push for the American Jobs Act that dedicates at least $25 billion in “green” technology efforts – on top of the tens of billions already committed due to the Stimulus.
But one aspect of President Clinton’s speech stood out for us. The On-bill Recovery Financing, just enacted by Gov. Cuomo on August 4, 2010. It is a law that has received little attention, and according to the postulations of President Clinton, guarantees energy savings. In fact President Clinton quoted a savings of 22% four times, and 38% twice, in direct reference to On-bill financing.
What is On-bill financing? Is it truly the cure all to New York’s energy needs? Can it provide individuals “22 – 24% [in savings] that can be paid in a year to a year and a half”, with “no out-of-pocket expense”?
According to Daphne Livingston of the LongIslandPress.com
“On-bill financing uses future energy savings to cover the full cost of a state retrofit loan. Property owners will pay back the loan as a line item on their utility bill over time; the monthly repayment will be calibrated to the energy savings so that the loan doesn’t increase the bill. The program will give moderate income property owners access to energy-saving retrofits even if they cannot qualify for traditional bank loans.”
According to the Bill itself, the Power New York Act of 2011, is a fix to the 2009 Green Jobs/Green New York program. Green Jobs/Green New York was intended to create over 14,000 permanent jobs, but had no means of allowing financing to actually put the program into action. Power NY Act (on-bill financing) provides the means to create that funding.
“On bill recovery would help overcome some of the common barriers to energy efficiency, including up-front capital cost and the complexity of taking out a loan from a third-party lender that requires payment through a separate invoice. On-bill recovery allows the charge to stay with the meter upon transfer of the property, thus allowing home and business owners to pay for the efficiency measures over the useful life of the equipment, enabling them to pay for the cost of the loan through reductions in their energy bills.”
According to NYSERDA’s fact sheet:
- Loan Limits – $25,000 residential; $50,000 small business/NFP, $500,000 multifamily
- Covers utility customers of: Central Hudson, Con Edison, NYSEG, National Grid, Orange & Rockland, Rochester Gas & Electric, and Long Island Power Authority
- Each loan secured by mortgage upon real property – May not be used to force payment or foreclose. Prior to sale of property, seller must provide written notice to purchaser – mortgage will appear on title search
- Unless satisfied prior to sale, on-bill recovery charge survives changes in ownership
- Monthly repayment charge cannot exceed 1/12th of projected energy savings
- Partial payment of utility bill first applied to utility charges, then on-bill recovery charge
- On-bill recovery charge will be billed by the customer’s utility and failure to pay may result in termination of service
- The customer may not lower energy costs over time, based on additional factors that contribute to monthly energy costs
- Participation initially limited to .5% of each utility company’s customers, but NYSERDA can petition to increase limit provided PSC finds that program has not harmed the company or its ratepayers
It sounds great, but the last 3 items may be of the most interest. They are definitely the least discussed in the fact sheets by pro-Democrat groups like Centers for Working Families.
Considering that the repayment charge cannot exceed 1/12th of energy savings, how might failure to pay that repayment – which is supposed to be paid for by savings and no out-of-pocket expense – cause termination of service? If the .5% limit of participation is reached, how long will others have to wait, when and if the limit is raised? If this is such a success and benefit to individuals and business, why is there provision that limits are in force to protect ratepayers and the utility company?
Besides the fact that NYSERDA refutes the stated guarantee by President Clinton, stating savings many never occur – thus increasing cost to individuals and business – the big question keeps coming back to “harmed the company or its ratepayers”. That provision in the factsheet implies that by just .5% of participation, the cost of energy to some or all customers of a utility may increase. Which flies in the face of the hype on savings that is being touted.
Also of concern, in speaking with NYSEG’s customer service at 3:30pm while this artilce was being written, NYSEG has no information on the program. They refer customers, after an extended hold and after having to explain the Power NY Act in the first place, to NYSERDA. Which is fine, as NYSERDA does have the lead in this. Yet it seems somewhat disconcerting that NYSEG, a major utility in the Southern Tier of NY, has no information readily available, nor have they provided any information to their customer service personnel about the law.
On balance, President Clinton is correct that the Power New York Act deserves more attention. The potential from savings is far more vague, and may involve more work than President Clinton suggessted in stating “…it can be done in 8 hours, you just have to tell them (green energy professionals) what day.”
But we are wary that a major utility, NYSEG, has nothing to say about the law to customers. We are wary of the reality of no savings over time versus the hype of “22% in savings”. We are wary of the “harm” to ratepayers based on just .5% of participation, in something meant to benefit the State.
We would suggest readers go to NYSERDA’s website to review the new law and application thereof – except a search on the site for On-bill financing gives no result with answers. Going to the sites information on Green Jobs – Green NY, and then going to Energy Finance Solutions equally provides no direct reference or information.
For an effort, professed to be so great for New Yorkers, the lack of transparency and feedback does not inspire confidence. Still, that is the starting point we would suggest if you want to know more.