New York City Energy Efficiency Corporation
Although in theory energy efficiency building retrofits pay for themselves through energy savings, only a small percentage of buildings have undergone retrofits. In New York City this challenge is more pronounced, with buildings consuming 80% of the city's energy and producing 75% of its greenhouse gas emissions. There is an urgent need to develop an entity to scale up retrofit implementation by convening, coordinating, providing and harmonizing financial and technical assistance resources.
Over the past year and a half, NRDC has worked closely with New York City's Office of Long-Term Planning and Sustainability (OLTPS) and Deutsche Bank's Community Development Financing group to establish the New York City Energy Efficiency Corporation (NYCEEC), an independent not-for-profit entity tasked with catalyzing the development of a fully scaled, market-driven energy efficiency retrofit industry in New York City.
NYCEEC, incorporated as a public-private partnership, has received seed funding from the city in the amount of $37.5 million of federal stimulus money granted to New York under DOE's Energy Efficiency and Conservation Block Grant program. NYCEEC has capacity to implement a range of energy efficiency financing strategies, but also focuses on generating retrofit demand from building owners, and works with partners to build capacity for job creation and economic development stemming from the energy retrofit market.
NRDC/NYCEEC Accomplishments to Date
- NYCEEC is incorporated as a non-profit corporation (currently seeking 501(c)(3) tax exempt status).
- NRDC has assisted the city in identifying and recruiting board members. NYCEEC's initial three-member board has been expanded to eight individuals, consisting of three city employees and five independent members, including Greg Hale from CMI. The Board will be expanded shortly with an additional non-city representative.
- NRDC participated in the RFP, interview and selection process for NYCEEC's initial financial advisor, Forsythe Street Advisors, who is now under contract.
- NRDC served on the interview committee for the entity's CEO. As a result of this process, Susan Leeds (a CMI alumna) was selected and unanimously approved by the full board and the Mayor's office. Now that Susan has been seated, NYCEEC is in a position to move forward quickly with the design and roll-out of its initial financial products and services.
- NYCEEC was initially capitalized with $37.5 million received by New York City through two federal ARRA stimulus grants earmarked for energy efficiency in real estate under DOE's Energy Efficiency and Conservation Block Grant program. NYCEEC has raised an additional $1.5 million of philanthropic grant funding from the Rockefeller Foundation, Kresge Foundation, Deutsche Bank Americas Foundation and Living Cities Foundation.
- In November, 2011, NYCEEC closed its first financing transaction: NYCEEC provided credit enhancement to a private sector financial institution (BB&T Bank), which enabled the bank to provide debt capital into a Managed Energy Services Agreement (MESA) transaction structure sponsored by Transcend Equity Development Corp. to finance a $1.5 million energy efficiency retrofit of a commercial condominium office property in downtown Manhattan.
- As of January, 2012, NYCEEC is in the process of developing various financing products – both direct loan products, where financing gaps exist, and credit enhancement vehicles to incentivize commercial lenders to lend against and attribute value to energy savings generated by energy efficiency retrofit projects.
- Many more transactions are in the pipeline. NYCEEC is engaged in active discussions with a wide range of potential counterparties including ESCOs, commercial and multifamily property owners and managers, retrofit project developers (ESA and MESA sponsors), financial institutions (commercial banks, regional/community banks, GSEs, CDFIs), and utilities.
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CMI on Switchboard
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