On-Bill Financing. An Overview for Local Governments. Mike Hackett NRG Answers, LLC for Pacific Gas & Electric. October 10, 2014

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1 On-Bill Financing An Overview for Local Governments Mike Hackett NRG Answers, LLC for Pacific Gas & Electric October 10, 2014

2 On-Bill Financing: Program Overview What is On-Bill Financing? PG&E energy efficiency program to assist non-residential customers and government customers with funding for energy efficient facilities improvements through zero interest loans OBF serves as an enhancement to existing rebate and/or incentive programs o OBF helps remove the upfront cost barrier that often prohibits local governments from installing energy efficiency retrofits, particularly for smaller capital improvement projects After project completion, PG&E will lend the money for the retrofit and the customer will pay the loan interest free through their monthly utility bills Note: OBF is one of many financing tools. Customers can selffund energy efficiency projects, or obtain financing through regular lender programs. 2

enhancement to existing rebate and/or incentive programs o OBF helps remove the upfront cost barrier that often prohibits local governments from installing energy efficiency retrofits, particularly

3 On-Bill Financing: Eligibility Who is eligible? OBF is available to non-residential customers for projects that qualify for a rebate or incentive through a PG&E program, and meet the minimum payment history screening criteria Commercial customers may qualify for loans between $5,000 and $100,000, with loan periods of up to 60 months Government agencies may qualify for loans between $5,000 and $250,000 per PG&E meter ($1M cap w/pg&e approval*), loan periods of up to 120 months Note: OBF eligibility is subject to a customer payment history review Loan Terms Commercial, Industrial, Agricultural Government Agency Only Interest 0% 0% Minimum Loan Amount per Customer $5,000 $5,000 Maximum Loan Amount $100,000 / premises $250,000 / meter** Maximum Loan Amount per Customer $1,000,000 $1,000,000 Maximum Loan Term 60 months 120 months *$1,000,000 allowed where, in PG&E s sole opinion, unique opportunities to capture large energy savings exist and all other OBF loan program terms will be met. Meters and locations can be aggregated. **$250,000 max per government customer for LED Streetlight Projects 3

may qualify for loans between $5,000 and $100,000, with loan periods of up to 60 months Government agencies may qualify for loans between $5,000 and $250,000 per PG&E meter ($1M cap w/pg&e

4 Sample OBF Payment Calculation 4

OBF Status Report August 2014 5 OBF Loan Pool (as of 8/31/14) Status # $ Requested 483 $5,832,499 Reserved 246 $17,484,166 Loaned 828 $35,148,688 Loaned 828 $35,148,688 (Repayments) ($10,786,459) Net

5 OBF Status Report August OBF Loan Pool (as of 8/31/14) Status # $ Requested 483 $5,832,499 Reserved 246 $17,484,166 Loaned 828 $35,148,688 Loaned 828 $35,148,688 (Repayments) ($10,786,459) Net Loaned $24,362,229 Loan Pool $50,500,000 Subscribed (Reserved + Net Loaned) ($41,846,395) Remaining $8,653,605 Key Stats Through Aug. 2014, loan volume originated is 25% higher than 2013 full year results $35.1M loaned to date: $14.3M in 2013 on 300 loans $12.6M in 2014 on 375 loans 31% of loaned amounts have been repaid Aug. monthly repayments: $595k (YTD average: $595k/mo.) Average Loan: $42k (SMB $25k, Gov t Agency $113k) Net loaned amount increased by $3.4M, July-Aug. Loaned Cust. Type # % $ % Avg. $ Final KWHs Final THERMS SMB % $14,029,419 40% $25,278 31,342,689 91,681 Gov't Agency % $15,752,773 45% $113,329 24,538, ,918 LCIA % $5,366,497 15% $40,048 22,381,980 53,951 Total % $35,148, % $42,450 78,263, ,550 Reserved Cust. Type # % $ % Avg. $ Orig. KWHs Orig. THERMS SMB % $4,992,661 14% $29,896 1,385,443 - Gov't Agency 42 5% $11,418,927 32% $271,879 1,325,762 1,565 LCIA 37 4% $1,072,578 3% $28, ,860 - Total % $17,484,166 50% $71,074 3,456,065 1,565

2014, loan volume originated is 25% higher than 2013 full year results $35.1M loaned to date: $14.3M in 2013 on 300 loans $12.6M in 2014 on 375 loans 31% of loaned amounts have been repaid Aug.

6 Barriers with On Bill Financing Education about OBF advantages and process Electeds, Staff, Financial, Legal Build in program timeline Project approval, initiation Incentive approval Loan modification Lowering Barriers Pre-approval process Internally Externally Close communication Utility Account Rep (specialists) and Contractor Start Small, Progressive Approach 6

Loan modification Lowering Barriers Pre-approval process Internally Externally Close

7 OBR for State Agency Facilities On-Bill Repayment (OBR) - New Statewide Pilot programs to support energy investments Partnership between IOUs, CAEATFA, and CPUC OBR allows lenders to originate loans and leases for energy measures with repayment on utility bill Expected Launch 2 nd Qtr 2015 Track progress at OBF OBR Loan Size $5k-$250k Not limited: Based on Lender Requirements Lender PG&E/SCE/SCG/SDGE Private Financial Institution Underwriting Criteria Bill payment history Determined by Lender Loan Term Up to 10 years. Determined by projected energy savings Flexible. Determined by Lender Eligible Measures Energy Efficiency (EE) EE, Demand Response, Distributed Generation 7

com OBF OBR Loan Size $5k-$250k Not limited: Based on Lender Requirements Lender PG&E/SCE/SCG/SDGE Private Financial Institution Underwriting Criteria Bill payment history

8 Thank you! Mike Hackett NRG Answers, LLC Santa Barbara, CA CONTACT PG&E: Al Gaspari Principal Program Manager Energy Efficiency Financing Programs Michael Norbeck Program Manager On Bill Financing 8

com CONTACT PG&E: Al Gaspari Principal Program Manager Energy

9 RESOURCES Links to Utility Company OBF Programs PG&E: pge.com/eef Southern CA Edison: So Cal Gas: SDG&E: Other: 10/14/14 Paso Robles, 8-10AM PG&E Contractor Rebates 10/23/14 Fresno, 5-8PM, PG&E Contractor Financing 9

com/for-your-business/rebates/zero-interest.shtml SDG&E: http://www.sdge.

ON BILL REPAYMENT FOR ENERGY EFFICIENCY FINANCING. Real Estate Industry Consultation

ON BILL REPAYMENT FOR ENERGY EFFICIENCY FINANCING Real Estate Industry Consultation California s Investor Owned Utilities November 22, 2013 TOPICS COVERED On Bill Repayment (OBR) overview Energy Efficiency