Legislature(2017 - 2018)CAPITOL 17

03/28/2017 10:15 AM ENERGY

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Audio Topic
10:23:00 AM Start
10:26:54 AM Presentation: Connecticut Green Bank
11:59:45 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: How Green Banks Accelerate Clean TELECONFERENCED
Energy Investment by Bert Hunter, Exec. VP,
Connecticut Green Bank
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                         March 28, 2017                                                                                         
                           10:23 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Adam Wool, Chair                                                                                                 
Representative Ivy Spohnholz, Vice Chair                                                                                        
Representative Dean Westlake                                                                                                    
Representative DeLena Johnson                                                                                                   
Representative Jennifer Johnston                                                                                                
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Matt Claman                                                                                                      
Representative George Rauscher                                                                                                  
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION: CONNECTICUT GREEN BANK                                                                                            
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CHRIS ROSE, Executive Director                                                                                                  
Renewable Energy Alaska Project (REAP)                                                                                          
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented a brief overview of the                                                                        
Connecticut Green Bank.                                                                                                         
                                                                                                                                
BERT HUNTER, Chief Investment Officer                                                                                           
Connecticut Green Bank                                                                                                          
Rocky Hill, Connecticut                                                                                                         
POSITION STATEMENT:  Presented a PowerPoint titled "Connecticut                                                               
Green Bank.                                                                                                                     
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
                                                                                                                                
CHAIR  ADAM WOOL  called the  House Special  Committee on  Energy                                                             
meeting to order at 10:23  a.m.  Representatives Wool, Spohnholz,                                                               
Westlake,  Johnston, and  Johnson  were present  at  the call  to                                                               
order.                                                                                                                          
                                                                                                                                
[Due  to  technical  difficulties,  the call  to  order  and  the                                                               
announcement to the order of business were not recorded.]                                                                       
                                                                                                                                
CHAIR WOOL announced  that the only order of business  would be a                                                               
presentation by the Connecticut Green Bank.                                                                                     
                                                                                                                                
10:23:00 AM                                                                                                                   
                                                                                                                                
^Presentation: Connecticut Green Bank                                                                                         
              Presentation: Connecticut Green Bank                                                                          
                                                                                                                                
CHRIS ROSE,  Executive Director, Renewable Energy  Alaska Project                                                               
(REAP), reported that the Renewable  Energy Alaska Project (REAP)                                                               
was  a coalition  of 80  statewide organizations  focused on  the                                                               
promotion  of  clean  energy, energy  efficiency,  and  renewable                                                               
energy.   Since 2008, REAP  had supported a number  of successful                                                               
programs,  including  the   Alaska  Housing  Finance  Corporation                                                               
programs for weatherization  or rebate.  He noted  that more than                                                               
40,000 homes  had been weatherized  through the program,  with an                                                               
average savings of 30 percent.   He shared that the AHFC estimate                                                               
was for  a heating oil  savings of  more than 25  million gallons                                                               
every year.  He pointed out  that this money saved was staying in                                                               
the Alaska  economy.   He reported on  an additional  60 projects                                                               
which  were saving  30 million  gallons of  diesel annually.   He                                                               
noted  that  these  projects successfully  kept  dollars  in  the                                                               
Alaska economy.   In order to  keep this momentum, even  in times                                                               
of  a  tight state  budget,  he  suggested  it was  necessary  to                                                               
leverage  private money.    He estimated  that  Alaskans paid  $5                                                               
billion  annually  for  energy,  which  included  transportation,                                                               
heating,  and  electricity.     He  pointed  out   that,  as  the                                                               
residential industry had saved 30  percent in costs, a 20 percent                                                               
savings  for  the  commercial  industry  would  keep  another  $1                                                               
billion  in  the  Alaska  economy.   He  pointed  out  that  this                                                               
investment  would  also  create  many jobs.    He  described  the                                                               
Connecticut Green Bank program as  a catalyst for these programs,                                                               
noting  that this  was the  first green  bank established  in the                                                               
United  States, in  2011.    He declared  that  this program  had                                                               
tremendous success,  and he reported  that the  Connecticut Green                                                               
Bank  was  not  competing  with  the  private  sector,  but  was,                                                               
instead,  allowing  the private  sector  easier  access into  the                                                               
markets.                                                                                                                        
                                                                                                                                
10:26:54 AM                                                                                                                   
                                                                                                                                
BERT HUNTER,  Chief Investment  Officer, Connecticut  Green Bank,                                                               
offered some background about the  program, and reported that the                                                               
Connecticut Green Bank was formed in  2011 by the Governor of the                                                               
State of Connecticut  and the state legislature.   He stated that                                                               
the  energy  policy  spoke  to  reducing  the  energy  burden  on                                                               
businesses and residents, as well  as benefitting the economy and                                                               
the environment.  He said  that the Connecticut clean energy fund                                                               
was established in 1999.   He reported that the Connecticut Green                                                               
Bank  had done  more than  $1  billion of  investment, more  than                                                               
three times the amount of  investment from the clean energy fund,                                                               
in less than half  the time.  He explained that  the focus of the                                                               
Green  Bank was  to  attract more  private  investment for  clean                                                               
energy deployment by partnering  with financial institutions.  He                                                               
declared that the  Green Bank offered the  financing to encourage                                                               
more private  investment for clean energy,  which included energy                                                               
efficiency,  solar, oil  to gas  conversions, electric  charging,                                                               
fuel cells, small  hydro, and wind.  He said  that public dollars                                                               
were  used  to  attract  local  banks,  credit  unions,  national                                                               
lenders,   and   global   financial   institutions   to   provide                                                               
businesses, consumers, municipalities and  schools with access to                                                               
affordable capital  to solve the  clean energy needs.   He stated                                                               
that  the financial  institutions were  now contacting  the Green                                                               
Bank for  partnerships, as  the Green  Bank offered  programs and                                                               
financial  products to  help the  citizens of  the state  achieve                                                               
their  own  energy conservation  and  energy  choice goals  while                                                               
helping the  state meet  its ambitious  environmental goals.   He                                                               
pointed  out  that  these   improvements  helped  the  industrial                                                               
manufacturers  become  more  competitive  as  it  lowered  energy                                                               
costs,  and that  homeowners could  upgrade to  cleaner and  more                                                               
efficient  energy.   He added  that  the Green  Bank also  helped                                                               
businesses  and communities  invest in  micro grids.   He  shared                                                               
that there  was support for economically  challenged communities,                                                               
as energy  costs often consumed up  to 25 percent of  income.  He                                                               
said that the Green Bank  worked with the social service agencies                                                               
to lower  the energy  costs of  families with  fixed income.   He                                                               
declared that  all of these  programs had "an enormous  impact on                                                               
economic development  for the  state."  He  reported that  the $1                                                               
billion  of  investment  by the  Green  Bank  represented  12,500                                                               
direct and indirect  job years.  He reminded that  a reduction in                                                               
energy costs allowed for more local investment.                                                                                 
                                                                                                                                
10:33:11 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  JOHNSTON asked  how  the  Connecticut Green  Bank                                                               
incorporated federal tax credits and federal programs.                                                                          
                                                                                                                                
MR. HUNTER replied  that federal tax credits for  solar were used                                                               
through a  solar fund, established  with U.S. Bank and  Key Bank.                                                               
This  enabled  the  Connecticut   Green  Bank  to  provide  power                                                               
purchase  agreements and  solar  leases to  homeowners and  small                                                               
businesses.                                                                                                                     
                                                                                                                                
REPRESENTATIVE JOHNSTON  asked what percentage of  the $1 billion                                                               
investment was dependent on the federal programs.                                                                               
                                                                                                                                
MR.  HUNTER  opined  that  it was  currently  about  50  percent,                                                               
although it  was decreasing.   He said  that the Green  Bank also                                                               
managed   an  incentive   program  which   provided  funding   to                                                               
homeowners and third-party owners.                                                                                              
                                                                                                                                
CHAIR WOOL asked about the  proportion of investment for in-state                                                               
energy consumption.                                                                                                             
                                                                                                                                
MR.  HUNTER offered  his belief  that  about 30  percent was  for                                                               
commercial   and   industrial,   with  about   70   percent   for                                                               
residential, including multi-family.                                                                                            
                                                                                                                                
REPRESENTATIVE   JOHNSON  questioned   the   amount  of   federal                                                               
investments.   She asked if  the U.S. Department of  Energy (DOE)                                                               
focused  primarily  on  nuclear  power,  and  if  there  was  any                                                               
contribution toward green programs.                                                                                             
                                                                                                                                
MR. HUNTER  said that the DOE  incentivized through co-investment                                                               
to  have  innovation and  energy  efficiencies.   He  offered  an                                                               
example of  a high efficiency  fuel cell  in the pilot  phase and                                                               
stated that DOE would lend funds  to the developer to make this a                                                               
commercialized  process.   He stated  that  DOE had  a number  of                                                               
energy investment programs, related  to the American Recovery and                                                               
Reinvestment Act  (ARRA) of 2009.   He opined that most  of those                                                               
programs were "being wound up right now."                                                                                       
                                                                                                                                
MR. HUNTER addressed slide 2,  "Agenda," and shared that he would                                                               
speak  about  the  Green  Bank,  its  basics,  its  benefits  and                                                               
impacts, and  its projects and  program examples, as well  as the                                                               
Green Bank  movement.  He  moved on to  slide 3, "About  Us," and                                                               
stated that  the Green Bank  had been  formed with a  $60 million                                                               
capital base, currently  had $175 million in  assets, and focused                                                               
on clean energy and energy efficiency.   He explained that it was                                                               
supported by  a slight  surcharge, $0.001  per kilowatt  hour, on                                                               
everyone's electric  bill, which was about  $27 million annually.                                                               
He  added that  they participated  in a  regional greenhouse  gas                                                               
initiative  which  generated  about  $5  million  annually.    He                                                               
pointed out that there was also  portfolio income of about $2 - 3                                                               
million annually.   He said  that the  Green Bank applied  to the                                                               
federal  government  for  funding  through  various  initiatives,                                                               
including   ARRA,  and   also  received   funding  from   private                                                               
foundations.                                                                                                                    
                                                                                                                                
MR.  HUNTER offered  demographics for  the State  of Connecticut,                                                               
slide  4, and  compared the  high  costs of  electricity in  both                                                               
states,  slide   5,  "Connecticut   &  Alaska."  He   listed  the                                                               
challenges  which drove  the formation  of the  Connecticut Green                                                               
Bank,  slide 6,  "Five Macro  Energy Challenges,"  which included                                                               
high energy costs, old, energy  inefficient buildings, a need for                                                               
cleaner,   cheaper   energy   sources,  grid   reliability,   and                                                               
constrained government spending.                                                                                                
                                                                                                                                
REPRESENTATIVE JOHNSTON  asked about Connecticut's  dependence on                                                               
natural gas.                                                                                                                    
                                                                                                                                
MR.  HUNTER replied  that the  natural gas  came from  across the                                                               
Hudson River, and,  as the pipelines were  established and fixed,                                                               
there was  no new capacity.   He  relayed that, in  winter, there                                                               
can  be constraint  which causes  the  price for  natural gas  to                                                               
spike, which had a ripple effect on electricity prices.                                                                         
                                                                                                                                
10:43:41 AM                                                                                                                   
                                                                                                                                
MR. HUNTER shared  slide 7, "Green Bank Basics" and  said that it                                                               
could be  sponsored by any government,  which established capital                                                               
for the  Green Bank, in  order to  mitigate the risk  for private                                                               
investors.    He  said  that  this allowed  for  the  low  carbon                                                               
projects  to be  developed for  substantial energy  efficiency in                                                               
renewables.                                                                                                                     
                                                                                                                                
MR. HUNTER explained that the  Green Bank operated in three ways;                                                               
co-investment with  other private capital banks  or institutions,                                                               
credit  support  with  a limited  guarantee  in  the  residential                                                               
lending  program, and  warehousing for  a pool  of financing  for                                                               
commercial programs, slide 8, "How  Green Banks's Leverage Public                                                               
Capital with More Private Capital."                                                                                             
                                                                                                                                
CHAIR WOOL asked  about the PACE (Property  Assessed Clean Energy                                                               
Programs) activity.                                                                                                             
                                                                                                                                
MR. HUNTER said  that Connecticut had the  most active commercial                                                               
PACE  program  in  the  US,   with  more  than  $100  million  in                                                               
transactions in  two years.   He said  that the average  size was                                                               
$600,000, although the range was very wide.                                                                                     
                                                                                                                                
MR.  HUNTER moved  on  to  slides 10  and  11, "Accelerate  Green                                                               
Energy  Deployment," which  reflected  the increase  in the  last                                                               
five years  to more than  208 megawatts  of clean energy  with $1                                                               
billion in investment.                                                                                                          
                                                                                                                                
CHAIR  WOOL determined  that  this money  had  been from  grants,                                                               
which were now exhausted.                                                                                                       
                                                                                                                                
MR.  HUNTER said  that  they now  encouraged  private money,  and                                                               
combined with  the Green  Bank financing,  this had  a multiplier                                                               
effect.                                                                                                                         
                                                                                                                                
REPRESENTATIVE JOHNSTON  asked if  there was any  venture capital                                                               
investment.                                                                                                                     
                                                                                                                                
MR. HUNTER replied that it  was mainly traditional financing.  He                                                               
referenced  the  comprehensive  annual   financial  report.    He                                                               
focused on the lifetime CO2  emissions table in the report, which                                                               
reflected a lifetime  savings of more than 2 million  tons of CO2                                                               
in the first five years.                                                                                                        
                                                                                                                                
MR.  HUNTER  shared  slide 12,  "Comprehensive  Annual  Financial                                                               
Report"  which   encapsulated  the  financial   and  programmatic                                                               
performances.      He   pointed    to   slide   13,   "Investment                                                               
Transactions,"  which  listed  many   of  the  transactions  with                                                               
private capital.                                                                                                                
                                                                                                                                
CHAIR WOOL asked if the  ratio was the private capital investment                                                               
relative to the Green Bank.                                                                                                     
                                                                                                                                
MR.  HUNTER expressed  his agreement  and moved  on to  slide 14,                                                               
"Delivering Results  for Connecticut," which listed  the benefits                                                               
and substantial impact from investment, jobs, and energy burden.                                                                
                                                                                                                                
10:51:54 AM                                                                                                                   
                                                                                                                                
MR. HUNTER  directed attention to  slide 17, "Smart-E  Loan," and                                                               
spoke about these loans, which  were intended for local community                                                               
banks  and   credit  unions  to   provide  unsecured   loans  for                                                               
homeowners.  He relayed that  banks were already offering secured                                                               
loans, and that homeowners always  had the option of applying for                                                               
a home  equity line  of credit or  refinancing a  first mortgage.                                                               
He explained that  these loans allowed work  with contractors for                                                               
a  "smooth and  easy  process."   He  suggested  this would  move                                                               
toward  the elimination  of  teaser rates,  and  would allow  the                                                               
contractor to  work with  banks, credit  unions, the  Green Bank,                                                               
and customers  to offer lower rate  loans for a longer  term.  He                                                               
said that  some of the ARRA  funds provided a loan  loss reserve,                                                               
which allowed for a limited  undertaking for losses that might be                                                               
experienced by  the banks, in  return for a lowering  of interest                                                               
rates for unsecured loans.                                                                                                      
                                                                                                                                
REPRESENTATIVE  JOHNSTON asked  how  this was  coordinated.   She                                                               
asked if the  companies were vetted.  She  questioned whether the                                                               
cost of energy  would go down, and how this  could be meshed into                                                               
the energy grid to allow for an overall benefit.                                                                                
                                                                                                                                
MR. HUNTER  replied that the  contractors were vetted  and needed                                                               
to apply and  provide proof they had adequate  insurance and were                                                               
registered  and licensed  as home  improvement  contractors.   He                                                               
pointed out that  the contractors were required to  be trained by                                                               
Connecticut Green Bank  for an understanding of  how the programs                                                               
worked.  He added that there  was a quality assurance and quality                                                               
control program  to ensure the  projects were  installed properly                                                               
and were functioning  properly.  He reported that  the Green Bank                                                               
provided a list  for the range of activities  which qualified for                                                               
the  loan program.   He  pointed out  that the  bank did  not get                                                               
involved with the qualifications for  the range of measures, they                                                               
only performed the  underwriting of the customer.   He noted that                                                               
the approval was done through an internet portal.                                                                               
                                                                                                                                
REPRESENTATIVE JOHNSTON asked about the effect on the grid.                                                                     
                                                                                                                                
MR. HUNTER replied that Connecticut  did not have the integration                                                               
of  solar  where  this  would  remotely  become  an  issue.    He                                                               
acknowledged that  this was an  issue in parts of  California and                                                               
Hawaii,  and   that  it   was  a   challenge  to   integrate  the                                                               
intermittent resources  into the grid,  which was built  for one-                                                               
way delivery  of power  from the  central power  source out.   He                                                               
offered  a   few  comments,  stating  that   some  upgrades  were                                                               
necessary,  and that  those  improvements were  paid  for by  the                                                               
contractors and the home owners  where they happened.  He offered                                                               
his  belief that  this was  "not a  particularly fair  way."   He                                                               
declared that  the solar use  had brought many benefits  in terms                                                               
of  distributed generation.   He  reported  that the  Connecticut                                                               
policy had net metering, which  meant that a home which generated                                                               
more  energy than  it  was  using was  offered  a  credit by  its                                                               
utility, which could be drawn on when necessary.                                                                                
                                                                                                                                
REPRESENTATIVE  JOHNSTON asked  how  they dealt  with the  policy                                                               
level.                                                                                                                          
                                                                                                                                
MR. HUNTER  replied that the  Green Bank worked closely  with the                                                               
regulatory  authority  and the  utilities,  and  that it  was  an                                                               
ongoing  evolution  and  dialogue  throughout the  country.    He                                                               
stated  that  the  utilities were  working  positively,  as  they                                                               
viewed  the  distribution  of the  resources  as  beneficial  for                                                               
taking stress  off the grid.   He pointed out that  the utilities                                                               
wanted to do  it in a more planned fashion,  with the possibility                                                               
of enhanced incentives in areas  that needed more generation.  He                                                               
stated that this would result in a stronger grid.                                                                               
                                                                                                                                
MR.  HUNTER stated  that their  interest rates  ranged from  4.49                                                               
percent to 6.99 percent, from  five years to twelve years, adding                                                               
that it  was a moderate,  clearly affordable amount  of interest.                                                               
He added that the Green Bank used  its ARRA funds to buy down the                                                               
interest  rates,  to  make  it   even  more  affordable,  if  the                                                               
homeowner  decided  to do  even  more  of  a project,  slide  19,                                                               
"Bundle Special Offer."                                                                                                         
                                                                                                                                
CHAIR WOOL asked  if this was a guarantee service  for default to                                                               
the banks, provided by Green Bank.                                                                                              
                                                                                                                                
MR.  HUNTER said  that  it was  credit enhancing  the  loan.   He                                                               
explained that a  percentage of the loan, a  loss reserve benefit                                                               
of 7.5  percent of the  loan, goes into  an account at  the Green                                                               
Bank for  the benefit of  the lender to withstand  credit losses.                                                               
He relayed  that this demonstrated  to the banks that  they would                                                               
not have  excess losses on  their portfolio.   He added  that the                                                               
first 1.5  percent of the loan  was retained loss by  the lender,                                                               
and if the  loss was larger, they  were then able to  look at the                                                               
reserve to  recoup.  In  response to Chair  Wool, he said  it was                                                               
the  Green Bank  money from  ARRA in  the reserve.   He  reported                                                               
that, in three years, Green Bank  had $16 million worth of loans,                                                               
of which  only two loans  had defaulted.   He noted that  none of                                                               
the reserve had  been used.  He offered his  belief that this was                                                               
a good way to leverage funds.                                                                                                   
                                                                                                                                
11:04:14 AM                                                                                                                   
                                                                                                                                
MR. HUNTER  stated that they  serviced the  low-income residents,                                                               
slide 21, "Low  Income Portfolio."  He pointed out  that it was a                                                               
misconception that  low-income people had a  poor credit history,                                                               
as it  was possible to have  poor credit while making  "way above                                                               
median income."   He stated  that by reaching out  and partnering                                                               
through  community development  financial  institutions, many  of                                                               
these  overlooked  residents and  families  were  able to  attain                                                               
energy  efficiency.   He said  that many  companies would  bypass                                                               
these  communities,  and instead  focus  on  middle- and  higher-                                                               
income populations.                                                                                                             
                                                                                                                                
MR. HUNTER  said that this  reinforced the idea that  homes being                                                               
heated with oil could convert  to solar for energy efficiency and                                                               
to bring  down the energy burden,  slide 23, "Solar PV  Lease and                                                               
EE  ESA."   He noted  that  the Green  Bank was  a repository  of                                                               
information   for   energy   efficiency  resources,   slide   24,                                                               
"Resources for  CT Homeowners."   He pointed  out that  they were                                                               
working in partnership with the utility.                                                                                        
                                                                                                                                
CHAIR  WOOL asked  how  AEA  would compare  to  this program  for                                                               
acquiring funds and knowledge of projects as a "one stop shop."                                                                 
                                                                                                                                
MR. ROSE  said that Alaska  had two state  corporations concerned                                                               
with  energy  efficiency,   Alaska  Housing  Finance  Corporation                                                               
(AHFC)  and  Alaska  Energy   Authority  (AEA),  although  Alaska                                                               
Industrial Development and Export  Authority (AIDEA) was the most                                                               
like Green Bank, except it did not  have the focus.  He said that                                                               
both  had  the knowledge  and  could  take advantage  of  federal                                                               
programs and  federal money to  integrate into new programs.   He                                                               
pointed out that AEA was not a finance institution.                                                                             
                                                                                                                                
MR.  HUNTER   shared  that  Green  Bank   supported  multi-family                                                               
property owners, even though the  actual resident paying the bill                                                               
was not the owner, slide 26, "Multifamily Programs- What we do."                                                                
                                                                                                                                
CHAIR  WOOL asked  whether the  loans for  improvements would  be                                                               
assumed upon sale  of the property and would  still be considered                                                               
an incentive for investment.                                                                                                    
                                                                                                                                
MR.  HUNTER  expressed agreement  and  said  that this  would  be                                                               
addressed.   He  moved  on to  slide 27,  "Resources  to Get  You                                                               
Started on the Right Path," and  said that Green Bank worked with                                                               
pre-development resources  and loans that offered  the ability to                                                               
determine  what   improvements  were   needed  for   more  energy                                                               
efficiency.   He added  that Green Bank  would provide  loans for                                                               
this determination,  and could  be wrapped  into the  next phase,                                                               
slide 28,  "Energy Upgrade Financing."   He spoke about  the LIME                                                               
(low  income multifamily  energy) loan,  the commercial  property                                                               
assessed  clean  energy  (C-PACE)  loan, and  Gap  Financing  for                                                               
projects with asbestos,  old wiring, lead pipes,  or old building                                                               
stock issues that needed to be addressed for health and safety.                                                                 
                                                                                                                                
11:13:44 AM                                                                                                                   
                                                                                                                                
MR.   HUNTER  directed   attention  to   slide  29,   "Affordable                                                               
Multifamily  Impact to  Date" and  reported that  there had  been                                                               
1,300 residential units outfitted  with solar, with an additional                                                               
1,300  units  becoming more  energy  efficient,  in the  past  18                                                               
months.   He  spoke  about slide  30, "Don't  Go  It Alone,"  and                                                               
listed  many  of  the  partners,  including  the  Departments  of                                                               
Housing and Public Health, who  helped direct the Green Bank with                                                               
technical assistance and direction.   He spoke about partnerships                                                               
for  low-cost  financing,  including  C-PACE  and  the  MacArthur                                                               
Foundation, and he  labeled the Green Bank as a  hub for bringing                                                               
all the resources, the capital side, and the projects together.                                                                 
                                                                                                                                
MR.  HUNTER   spoke  about  slide   33,  "C-PACE   Addresses  Key                                                               
Barriers,"  which allowed  100  percent financing  for  up to  25                                                               
years  and  that  the  savings   over  time  had  to  exceed  the                                                               
assessment  on  the  property.   He  addressed  slide  35,  "DEEP                                                               
Retrofits"   and  spoke   about  work   with  commercial   office                                                               
buildings,  public  schools, and  not  for  profits which  needed                                                               
financing  for energy  efficiency projects.   He  addressed slide                                                               
36,  "CT Solar  Lease 2"  and spoke  about the  relationship with                                                               
ONYX for commercial solar installation.                                                                                         
                                                                                                                                
CHAIR WOOL  asked how much of  the activity could be  ascribed to                                                               
the decrease in the price of solar.                                                                                             
                                                                                                                                
MR.  HUNTER  said that  about  half  of  the overall  Green  Bank                                                               
portfolio was for solar.                                                                                                        
                                                                                                                                
REPRESENTATIVE  JOHNSTON  asked how  much  of  the portfolio  was                                                               
thermal, or heat pumps.                                                                                                         
                                                                                                                                
MR. HUNTER  said that although  heat pumps was currently  a small                                                               
portion  of the  portfolio, it  was  an increasing  portion.   He                                                               
added that there  was currently a big thermal push  and that heat                                                               
pumps were now a part of the strategy.                                                                                          
                                                                                                                                
11:22:08 AM                                                                                                                   
                                                                                                                                
MR. HUNTER presented slide 37,  "SBEA Program Funding Structure,"                                                               
and explained  that the small  business energy  advantage program                                                               
(SBEA) worked  with the  local utilities  for three  to four-year                                                               
loans to commercial  customers.  He explained  that, although the                                                               
local utilities no  longer wanted to be lenders,  they had agreed                                                               
to be  the on-bill provider for  repayment.  He pointed  out that                                                               
the funding would  now come from the private capital  market.  He                                                               
reported that,  since inception of  the program ten  years prior,                                                               
the loss  rate was 1  percent.  He  added that the  utility would                                                               
put up a loss reserve to  backstop the loans, and this protection                                                               
was  sufficient.   He  said  the  Green  Bank would  provide  the                                                               
vehicle  to secure  the revenue  stream  for the  lenders, and  a                                                               
small amount of  transactional liquidity.  He  explained that the                                                               
Green  Bank could  be instrumental  in a  program with  a capital                                                               
cost of 4 - 5 percent.                                                                                                          
                                                                                                                                
MR. HUNTER  moved on to  slide 38,  "Lead by Example,"  and spoke                                                               
about the need for energy savings  for state facilities.  He said                                                               
there were  some transactions with  general obligation  bonds, as                                                               
well as  green bonds from the  Green Bank.  He  reported that the                                                               
Green Bank was exploring an  energy service agreement which would                                                               
take  these  transactions  away  from the  state  and  convert  a                                                               
capital investment into a service contract with the Green Bank.                                                                 
                                                                                                                                
REPRESENTATIVE JOHNSTON  asked how  the general  obligation bonds                                                               
would be integrated.                                                                                                            
                                                                                                                                
MR. HUNTER  explained that  the Green Bank  would issue  bonds to                                                               
the capital  provider.   In return for  issuing the  bonds, those                                                               
funds would come into the Green Bank under a bonding mechanism.                                                                 
                                                                                                                                
REPRESENTATIVE  JOHNSTON  said  that  the Green  Bank  could  not                                                               
integrate municipal or state bonds.                                                                                             
                                                                                                                                
MR. HUNTER replied that the  general obligation bonds would be on                                                               
the  state  balance  sheet,  and  the  state  could  do  its  own                                                               
financing;  however,   as  an  alternative,  using   hundreds  of                                                               
millions of  dollars to open  up the potential for  activity, the                                                               
energy savings  agreements could  be an alternative  for reducing                                                               
the burden of  the bonds on the state's balance  sheet.  He added                                                               
that the Green  Bank was constrained by an annual  bond limit, so                                                               
that energy savings agreements could solve this.                                                                                
                                                                                                                                
MR.  HUNTER reported  that Green  Bank would  finance grid  sized                                                               
projects, slide  39, "Bridgeport  Fuel Cell  Park," a  $5 million                                                               
financing to  incentivize the buyer  to complete the  $65 million                                                               
transaction.   This was  the largest fuel  cell project  in North                                                               
America,  15 megawatts.    He  said that  Green  Bank financed  a                                                               
number of micro  grids.  In response to Chair  Wool, he said this                                                               
was  a power  plant, with  a  power purchase  agreement with  the                                                               
local  utility.   He explained  that the  fuel cell  manufacturer                                                               
built the project, which was then sold to an investment company.                                                                
                                                                                                                                
MR. HUNTER turned to slide 40,  "Micro Grids," which he cited for                                                               
resiliency  and   as  back-up  power  to   ensure  that  critical                                                               
facilities still  had power  if there  was a  power failure.   He                                                               
moved to  slide 41, "Anaerobic Digester  Projects," and announced                                                               
that  there  was  a  big  organic problem  in  Connecticut.    He                                                               
reported  that there  was a  state policy  which said  that large                                                               
organic producers  had to supply  their organics to  an anaerobic                                                               
digester, if  they were within  a 20-mile  radius.  He  said that                                                               
this facilitated the Green Bank to finance a digester.                                                                          
                                                                                                                                
11:32:25 AM                                                                                                                   
                                                                                                                                
MR. HUNTER  discussed slide 42, "Wind  Projects," mentioning that                                                               
Green Bank  had some  5-Megawatt projects  and had  provided some                                                               
subordinated  debt that  encouraged seven  times leverage  from a                                                               
tax equity investor.  He  mentioned that, as Connecticut also had                                                               
some  small   hydro  projects,  they  had   taken  some  European                                                               
commercial technology and brought it  to the U.S., slide 43, "New                                                               
England Hydropower."  He reported  that this transaction had been                                                               
worked on by  the clean energy fund, which  provided financing to                                                               
the developer  to explore and  bring it to the  commercial phase.                                                               
He shared that these could be put anywhere.                                                                                     
                                                                                                                                
CHAIR WOOL  opined that  wind and  hydro projects  were expensive                                                               
relative  to  the  number  of  consumers  in  many  small  Alaska                                                               
communities.  He  relayed that these projects  were only feasible                                                               
if paid by a grant.                                                                                                             
                                                                                                                                
MR.  HUNTER  said  that  the  aforementioned  hydro  project  was                                                               
financed by federal clean renewable  energy bonds, and that there                                                               
was still funding available.   He shared that these bonds brought                                                               
the cost of financing down to about 1.5 percent over 20 years.                                                                  
                                                                                                                                
REPRESENTATIVE SPOHNHOLZ asked about the cost of the project.                                                                   
                                                                                                                                
MR. HUNTER replied  that it was a $4 million  project, because it                                                               
was the first.   He acknowledged that although  it was expensive,                                                               
it was  a discount for  the city, which had  signed up for  a 20-                                                               
year power  purchase agreement,  which was  also extendable.   It                                                               
was this  long contract  life which allowed  them to  recover the                                                               
investment.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ said  that a  $4 million  project which                                                               
would produce energy for 115 homes  would be cheap for many rural                                                               
Alaska communities, even  with an inflated cost  due to increased                                                               
construction expense.                                                                                                           
                                                                                                                                
MR.  HUNTER added  that this  price tag  also included  a lot  of                                                               
expense,  about $1  million, in  developmental cost,  which would                                                               
not be present in future projects.   He said that there were also                                                               
economies of scale if a second project was built alongside.                                                                     
                                                                                                                                
11:40:02 AM                                                                                                                   
                                                                                                                                
MR.  HUNTER  said  that there  was  foundation  money  available,                                                               
especially for  providing services to  disadvantaged communities,                                                               
slide   45,  "MacArthur   Foundation."     He  said   that  these                                                               
foundations  were   often  amenable   to  assisting   for  energy                                                               
efficiency  and  clean  energy  services.   He  pointed  out  the                                                               
various green  bonds, slide 46,  "Green Bonds."   He moved  on to                                                               
slide 47, "Grid of the  Future," and spoke about electric vehicle                                                               
charging, for which  the Green Bank could  provide financing over                                                               
a longer period of time than a commercial bank.                                                                                 
                                                                                                                                
REPRESENTATIVE  WESTLAKE  expressed  his interest  in  the  Tesla                                                               
battery  and   asked  if  the   Green  Bank  was   pursuing  this                                                               
technology.                                                                                                                     
                                                                                                                                
MR. HUNTER acknowledged that the  technology was rapidly changing                                                               
and  that the  battery capacities  were increasing,  allowing for                                                               
longer range which would necessitate  faster chargers, which were                                                               
more expensive.                                                                                                                 
                                                                                                                                
REPRESENTATIVE WESTLAKE  spoke about the difficulties  of cold on                                                               
these batteries.                                                                                                                
                                                                                                                                
MR. HUNTER, in  response to Chair Wool, replied  that there could                                                               
be  that  the chargers  were  placed  where there  was  activity,                                                               
including workplaces and shopping areas.                                                                                        
                                                                                                                                
CHAIR WOOL asked about the financing and the power production.                                                                  
                                                                                                                                
MR.  HUNTER  explained  that  these  were  networks  which  would                                                               
necessitate payment  with a  card swipe, or  similar, to  use the                                                               
charger.                                                                                                                        
                                                                                                                                
CHAIR WOOL asked how the Green Bank became involved.                                                                            
                                                                                                                                
MR. HUNTER  replied that they  provided the capital to  build the                                                               
network.   He stated that  the charger  unit was cheap,  but that                                                               
the cost  was in  the installation.   He  suggested that  some of                                                               
this  infrastructure could  even  be rate  based and  co-financed                                                               
with the utility.                                                                                                               
                                                                                                                                
REPRESENTATIVE JOHNSTON asked about storage on the grid.                                                                        
                                                                                                                                
MR. HUNTER said  they were at the neighborhood  level of storage,                                                               
and that there was a pilot program  with a utility for the use of                                                               
intermittent resources and storage.                                                                                             
                                                                                                                                
REPRESENTATIVE JOHNSTON asked about the hydrogen fuel cars.                                                                     
                                                                                                                                
MR.  HUNTER  replied  that  the   Green  Bank  was  watching  the                                                               
progress,  although   the  cars   and  the   build  out   of  the                                                               
infrastructure were very  expensive.  He opined  that the program                                                               
was  still challenged  by the  sheer  economics and  was not  yet                                                               
sustainable.                                                                                                                    
                                                                                                                                
11:51:31 AM                                                                                                                   
                                                                                                                                
MR.  HUNTER   returned  attention   to  slide  50,   "Green  Bank                                                               
Movement,"  and said  that Green  Banks  were part  of an  entire                                                               
global movement, the  Green Bank Network.  He listed  some of the                                                               
states  and  countries,  including   Rhode  Island,  New  Jersey,                                                               
California,  Japan and  Malaysia,  which also  had green  finance                                                               
organizations.                                                                                                                  
                                                                                                                                
CHAIR WOOL asked how many states currently had green banks.                                                                     
                                                                                                                                
MR. HUNTER  listed California,  Connecticut, New  York, Maryland,                                                               
Rhode Island, and Vermont.                                                                                                      
                                                                                                                                
REPRESENTATIVE JOHNSON asked if  funding was being withdrawn from                                                               
the Connecticut Green Bank.                                                                                                     
                                                                                                                                
MR.  HUNTER acknowledged  that  state budgets  were  an issue  of                                                               
concern, and  that Green Banks could  be viewed as a  piggy bank.                                                               
He  offered  his  belief  that the  legislatures  would  see  the                                                               
economic   development  benefits   was   money   well  spent   in                                                               
investment.   He  said that  they  met with  the legislators  and                                                               
reported  that  this was  an  efficient  use  of resources.    He                                                               
pointed  out that  this  worked positively,  and  that any  money                                                               
pulled  from  the  Green  Bank was  "turning  the  whole  process                                                               
around, so  it means  you'll have  lower investment,  not greater                                                               
investment."                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSTON asked about providing dividends.                                                                        
                                                                                                                                
MR.  HUNTER  said that  dividends  back  to  the state  would  be                                                               
possible as the portfolio grows.                                                                                                
                                                                                                                                
CHAIR WOOL asked about the  aforementioned system benefit charge,                                                               
pointing  out  that  the utilities  had  expressed  concern  that                                                               
ratepayers pay  for projects that  benefited somewhere else.   He                                                               
asked how much Alaska would make with a similar charge.                                                                         
                                                                                                                                
MR. ROSE  said that this  would raise about $6  million annually,                                                               
and  that, as  most of  the people  lived in  the Railbelt,  they                                                               
would receive  the most benefit.   He suggested that  there could                                                               
be multiple sources of stable revenue.                                                                                          
                                                                                                                                
11:57:52 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  SPOHNHOLZ  referenced the  aforementioned  Alaska                                                               
institutions, AEA, AIDEA, and AHFC,  and asked which would be the                                                               
best vehicle for a Green Bank  in Alaska, or whether it should be                                                               
a  separate  institution  to  deliver   these  same  outcomes  as                                                               
Connecticut.                                                                                                                    
                                                                                                                                
MR. ROSE offered  his belief that it was still  a little early to                                                               
tell.   He stated that  there was  expertise in banking  at AIDEA                                                               
and AHFC,  and expertise in  energy efficiency and  renewables at                                                               
AEA and  AHFC.  He said  that, although there was  a small amount                                                               
of lending  at AEA,  the majority  of lending  took place  at the                                                               
other two  institutions.  He  opined that  the benefit was  for a                                                               
very specific  and discreet focus.   He  stated that AIDEA  had a                                                               
broad focus  and reiterated that it  was still early to  make the                                                               
determination for one of these  institutions.  He reported that 6                                                               
or 7  people could provide  a lot of  the expertise to  move this                                                               
program along, with some accounting support.                                                                                    
                                                                                                                                
11:59:45 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special Committee on Energy meeting was adjourned at 11:59 a.m.                                                                 

Document Name Date/Time Subjects
House Energy - 3.28.17 - Bert Hunter BIO.pdf HENE 3/28/2017 10:15:00 AM
House Energy - 3.28.17 - Green Bank White Paper.pdf HENE 3/28/2017 10:15:00 AM
House Energy - 3.28.17 - Pres. by Bert Hunter - Intro to Green Banks.pdf HENE 3/28/2017 10:15:00 AM