April 1, 2014 2014 Draft State Energy Plan Comments NYSERDA 17 Colum ia Cir!le Al any, NY 1220"#$"%% Dear Asso!

iates in t&e Climate C&ange 'attle( Re( 2014 Draft NYS Energy Plan )ere y an itemi*e+ response to t&e +raft plan, -&is is an open letter, a.aila le on S!ri + at( &ttp(//000,s!ri +,!om/+o!/2170$4%21/Da'2# Comments#on#NY#State#2014#Draft#Energy#Plan, so t&at all t&e lin3s 0ill e li.e, As general a!3groun+, it seems 0e s&oul+ a!3no0le+ge t&at, as a so!iety, 0e are in a para+igm s&ift, a pro!ess t&at usually is painful, an+ e.en more so if 0e remain stu!3 in t&e past, -&e faile+ energy

#2#

poli!y of t&e past &as re.ol.e+ aroun+ Energy Effi!ien!y, an+ energy 4sa.ings,5 0&i!& &as oo3e+ pre!ious little progress, an+ in fa!t ma+e t&e pro lem 0orse, y !ementing our relian!e on fossil fuels 0it& progressi.e in.estments in t&e te!&nology, e.en 0&ile alternati.e, rene0a le te!&nologies 0ere maturing, The new model evidently is: ow !an we "ay for # #$red%!tions from energy savings&' 6ortunately, t&ere is an e!onomi!ally po0erful !ase t&at rene0a le energy mo.es energy from lia ilities to assets, an+ sol.es t&e pro lem at t&e only pla!e it !an e sol.e+, on t&e +eman+ si+e, -o+ay, t&ere is e.er more rene0a le te!&nology an+ it is time to a+7ust t&e analyti!al frame0or3 an+ t&e poli!y frame0or3 0it& t&e ne0 o 7e!ti.e of 8)8#re+u!tions in min+, The goals stated in the draft "lan of (0) # #$red%!tions *y 20+0 and ,0) # #$ red%!tions *y 20(0 are a first ste"- To "%t %s on the road to a!hieving them. it sho%ld *e mathemati!ally o*vio%s that we !annot entertain a single "ro/e!t that a!hieves less than (0) # # red%!tions. "arti!%larly not if we *ring limited reso%r!es to the ta*le- -&e typi!al Energy Effi!ien!y pro7e!t 0it& 11#219 energy 4sa.ings,5 0ill simply ring +o0n t&e a.erage an+ ensure failure of t&e plan, E:ually, fuel s0it!&ing 0ill not ser.e any purpose if t&e ig a+.an!es, in t&e range of 10#%09 8)8#re+u!tions e.en on a retrofit asis are pre!lu+e+ y +i.erting resour!es to su stan+ar+ pro7e!ts t&at only ser.e to ma3e fossil fuels more !ompetiti.e, -&e items are num ere+ an+ refer to se!tions of t&e report, Note t&at t&e !omments are limite+ to !ertain items, an+ t&at failure to !omment on an item means not&ing, e2!ept 0e &a+ no !omment, 1, P1 # ;ision, <t is not a out affor+a le energy, <t is a out e!onomi! sur.i.al, -&e gro0t& of solar P; on =ong <slan+ >or

#"#

any0&ere? is a sign of mar3et failure, not a su!!ess, 1 2, P1 # E;s are 0ort&0&ile only if t&e !&arging stations are solar, 0in+, or 0ater po0ere+, ot&er0ise t&ey merely +ispla!e pollution an+ +on@t sol.e anyt&ing, ", P1 # Ao !reation is only s&ort term B only from retrofits, for innately t&ere is less CDE for rene0a le te!&nology, -&e transition 0ill ta3e a generation &o0e.er, Regaine+ e!onomi! !ompetiti.eness 0ill translate into 7o !reation in t&e longer term, 4, P1 B <n+epen+en!e from t&e gri+, e.en partial, is more important t&an a!3up po0er, Cn t&e margin, t&e gri+ s&oul+ in!reasingly e!ome t&e a!3up, 0&i!& &as alrea+y een a stan+ar+ of sorts in +ata !enter !onstru!tion sin!e !a, 2000, -&is mo+el ensures &ig&er relia ility an+ resilien!e, 8ri+s !an an+ must e +esigne+ as super &ig&0ays +eli.ering energy in all +ire!tions, -&is 0ill re:uire a s&ift in ot& engineering p&ilosop&ies an+ regulatory o.ersig&t, 1, P1 B Ne0 Yor3 solutions,,, t&e 0ay to engage t&e 4!onsumer,5 is to o.ertly an+ +eli erately engage 0it& t&em on t&e le.el of
1 8eot&ermal offers 4009 effi!ien!y an+ !&eap, en.ironmentally frien+ly storage >&ot 0ater?, Solar -&ermal offers %F9 effi!ien!y an+ !&eap, en.ironmentally frien+ly storage >&ot 0ater?, solar P; offers 179 effi!ien!y an+ at est pro&i iti.ely e2pensi.e an+ en.ironmentally ur+ensome storage >!&emi!al atteries?, <n effe!t, property o0ners are ris3ing t&eir orro0ing !apa!ity>!re+it?, an+ roof real estate for a 109 sa.ings on t&eir energy ills, an+ t&ey pay for 20 years on a 10 year lease, an+ &ere in t&e Nort& East per&aps a 20#219 re+u!tion in 8)8#emissions, 0&en 0it& t&e same roof spa!e an+ proper finan!ing, t&ey !oul+ &a.e eliminate+ 709 of t&eir energy ills >&eating, !ooling, &ot 0ater?, an+ 719 or etter of 8)8#emissions, <n ot&er 0or+s, a finan!ially an+ en.ironmentally inferior solution is 0inning mar3et s&are e!ause it is easier to sell an+ install, an+ t&ere@s lots of !ommissions an+ profits in t&e sale, Ge are s&ooting oursel.es in t&e foot as a so!iety, See also &ere( &ttp(//000,.lis!ony,!om/201"/10/2F/solar#ppas#impair#property#appre!iation/

#4#

en&an!ing t&e .alue of t&eir assets 0&ere.er rene0a le retrofits !an mo.e energy from lia ility to asset 1, -&e reasoning &as to e!ome property#!entri!, an+ 0&ere.er .ia le neig& or&oo+/!ommunity/regional, to in!lu+e +istri!t &eat/!ooling type solutions et!, 'ut t&e in+i.i+ual property is t&e atom of t&e system, an+ in!enti.es at t&e le.el of spe!ifi! te!&nologies s&oul+ e eliminate+, for t&ey lea+ to inappropriate an+ su optimal +esigns, $, P2 B )y+roele!tri! po0er B 'y !ons!iously 0or3ing 0it& en+ !onsumers of t&at &y+ro#ele!tri! po0er, an+ +e.eloping in effe!t +istri ute+ rene0a le po0er generation on t&e +eman+ si+e, uil+ings an+ neig& or&oo+s !an e!ome more resilient an+ t&e proportion of green energy on t&e NY gri+ !an in!rease, 7, P2 B Energy Effi!ien!y >EE? !ontinues to e liste+ un+er 4Clean Energy,5 ut it +oes not elong t&ere, -&ose 0&o urn fossil fuel s&oul+ +o so as effi!iently as possi le, ut t&at is a s&ort term fi2, an+ on t&e margin it !ompetes against Rene0a le Energy>RE?, an+ it s&oul+ not e in t&e mi2 as a !ategory of its o0n B it +oes not generate energy, 6ossil fuel or rene0a le energy systems s&oul+ ot& e as effi!ient as possi le, EE is %seless as a "oli!y o*/e!tive. and it is not an investment grade asset. never mind the fan!y rationali0ations 1the fifth f%el.' and negawatts'2, <n t&e long#term it e2ten+s t&e attra!ti.eness of fossil fuels an+ in!reases emissions, it +oes not +iminis& it, <t s&oul+ not e a part of pu li! poli!y, Effi!ien!y is a se!on+ary o 7e!ti.e, not a primary one,
1 &ttp(//000,.lis!ony,!om/201"/0$/1$/real#estate#.aluation#age#rene0a le#energy/

#1#

F, P2 B EE is also antit&eti!al to resilien!y, as it in!reases our +epen+en!e on fossil fuels t&at are ot& t&e !ause of !limate !&ange, an+ su 7e!t to supply +isruptions y 0eat&er, or sa otage, or 0orse, Cnly +istri ute+ RE 0ill &elp sol.e t&e resilien!e issue as 0ell as t&e en.ironmental issues, an+ t&ere are large !lasses of uil+ings 0&ere it !an e e!onomi!ally implemente+, Ge first +o!umente+ t&is option in our 2011 report to t&en Eayor 'loom erg, t&e Da'2 PlaNYC2020, 0&i!& 0as sin!e se!on+e+ y t&e Hr an 8reen Coun!il@s %0 y10 report, %, P2 B -&e oil &eat an+ air :uality issue is largely sol.a le 0it& a +ire!t transition to RE infrastru!tures, s0it!&ing to 4!lean fuels5 as a transition pro+u!es largely !apital +estru!tion 1, an+ only .ery s&ort#term, an+ lo!ali*e+ !lean air impro.ements, parti!ularly if t&at fuel is natural gas, sin!e t&e system#0i+e losses in pro+u!tion an+ transportation 0ipe out any o.erall 8)8#impro.ements, -&e en.ironmental ris3s of fra!3ing tip t&e s!ales to !ompletely negati.e territory, 10,P2 B Ne0 +ire!tions, reali*ing a++itional .alue, <n+ee+, -&e !entral issue is proper finan!ial/e!onomi! +e!ision ma3ing on t&e part of property o0ners, 'y an+ large go.ernment >fe+eral an+ state? in!enti.es &a.e typi!ally een +ire!te+ at te!&nologies >!omponent le.el?, not results, an+ lea+ to su optimal +esigns, 0&en a!!ountants, or sales people, arme+ 0it& ta2 in!enti.es, instea+ of engineers, +esign t&e solutions, De!isions are typi!ally ma+e ase+ on marginal pay a!3 of e:uipment, ut s&oul+ e ma+e on a 0&ole property asis, using mo+els li3e t&e EPA@s Energy Star Portfolio Eanager,
1 &ttp(//000,.lis!ony,!om/201"/0F/20/ny!#!lean#&eat#!apital#+estru!tion/

#$#

an+ simple "0#year !apital u+geting on a 0&ole property asis >CAPE?, typi!ally 0it& 10#20 year te!&nology plans to ma3e t&e transition to ma2imal RE, 11,P" # 4,,,operate t&e energy system more effi!iently5 one of t&e 3eys is t&at 0it& proper gui+an!e for t&e +e.elopment, utilization of t&e gri+ !an e impro.e+, 0&i!& s&oul+ ai+ in t&e o.erall e!onomi!s of t&e system#0i+e !&anges, an+ regulators nee+ to a++ress effi!ient means of fa!ilitating su!& !&ange, <n general, gri+s s&oul+ em ra!e mi!rogri+s so long as t&ey are fairly !ompensate+ for t&e use of t&eir property, 8ri+s y nature are ser.ants to eit&er supply or +eman+ an+ in mo+ern +eregulation ser.e ot&, 8ri+ o0ners/operators an+ t&eir regulators must loo3 at rene0a les in!lu+ing properties using t&em for a!3up as an opportunity to !ontinue to ma3e profits, 12,P4 B Yes, Ne0 Yor3 !an lea+ if it 0ants to, 0e &a.e some .ery po0erful infrastru!tural a+.antages to ma3e rapi+ !&anges, Cne e2ample( pro a ly at least &alf of NYC)A uil+ings 0oul+ e suita le for !ompre&ensi.e RE retrofits, in!lu+ing !entral );AC, y !om ining geot&ermal, solar t&ermal, 0in+, an+ en.elope impro.ements, eliminating 0in+o0 A/Cs in t&e pro!ess, an+ pro.i+ing NYC 0it& a !ore of uil+ings t&at 0ill stay largely lit in t&e ne2t la!3out, Su!& impro.ement in resilien!e 0ill e !riti!al in t&e future, an+ t&e po0er +ispla!e+ 0ill en&an!e t&e greening of t&e NY gri+, an+ in!rease NYPA re.enues, -&ere pro a ly is enoug& margin in t&ose pro7e!ts to sol.e NYC)A@s maintenan!e arrears in t&e pro!ess, <t 0oul+ also +emonstrate !on!lusi.ely to !ommer!ial property o0ners t&at t&ey nee+ to get serious 0it& RE !on.ersions, lest t&eir uil+ings lose .alue rapi+ly,

#7#

1",P4 B 4Ne0 Yor3 en.isions(5 1? 4Energy affor+a ility,5 t&e fo!us s&oul+ e on .alue !reation, parti!ularly y en&an!ing uil+ing .alues 0it& RE, 0&i!& mo.es energy from lia ilities to assets, E.en more get energy !ompanies to partner in +eman+#si+e rene0a le retrofits, 4? Not 4gi.ing !ustomers more !ontrol,5 ut partnering 0it& !ustomers y raising asset .alues t&roug& RE, Engage t&e e!onomi! interest of property o0ners, t&erein lies t&e partners&ip potential, 14,P4 B 4Resi+ential Customers an+ 'usinesses5 # -&is paragrap& un0ittingly ma3es t&e pro lem more intra!ta le y fo!using on effi!ien!y of t&e infrastru!ture 0e +o &a.e, Per&aps for a renter t&at is una.oi+a le, ut a property o0ner s&oul+ re# t&in3 t&e -C-A= energy e:uation, 6or e2ample, solar t&ermal or geot&ermal !an +ispla!e most all fossil fuels use+ for &eating, !ooling an+ &ot 0ater, <n general, on t&e +eman+ si+e 0on+ers !an e +one 0it& RE, on!e t&e fungi ility of energy is un+erstoo+, <t ma3es no sense to use solar P; t&at is only 179 effi!ient to egin 0it& an+ t&en to use it for &eating 0ater, 0it& losses for e.ery energy !on.ersion( t&ermal to ele!tri!ity an+ a!3 to t&ermal, Solar P; is not only %F9 effi!ient, ut it also eliminates nee+less energy !on.ersions, an+ t&ere are no transportation losses 0&en it@s installe+ on#site, 11,P4 B Hni.ersities, &ospitals, +ata !enters B not only !an !&oose, ut must, an+ t&e +esign prin!iple &as to e!ome energy in+epen+en!e first, an+ using t&e gri+ mostly for a!3up, Data !enters &a.e alrea+y +one t&at for 11 years, <t is statisti!ally more relia le, an+ t&e sprea+ is impro.ing for +oing so 0it& in!reasing 0eat&er ris3,

#F#

1$,P1 B Communities B <n+ee+ t&e !ommunity/+istri!t an+ 0&ole uil+ing approa!& s&oul+ e !entral, Ge !an only &ope t&at t&e 'au!us energy ta2 proposal is re.ise+ to in!lu+e t&e +eman+ si+e, an+ fo!us its in!enti.es on 8)8#re+u!tions on a per pro7e!t asis, relati.e to t&e past performan!e of ea!& uil+ing, Retrofits s&oul+ aim for net#*ero or near#*ero out!omes, 0&i!& 0ill often nee+ to e +one in steps, to tie#in 0it& normal repla!ement !y!les of uil+ing infrastru!tures, as suggeste+ in our o0n Da'2 PlaNYC2020, an+ in t&e Hr an 8reen Coun!il@s %0 y10 report, -&e !riti!al element is to stop tal3ing a out 4a!&ie.ing su stantial energy sa.ings,5 an+ instea+ spea3 of !reating a++e+ .alue 0it& rene0a le energy retrofits B an+ a!&ie.ing ma2imal 8)8#re+u!tions finan!e+ from energy sa.ings, -&e pro lem 0it& 4sa.ing energy5 is t&at it gets us into t&e 0rong analyti!al frame0or3, for 4sa.ing energy5 is a losing attle t&an3s to +iminis&ing returns,1 <t is e!onomi!ally an+ finan!ially a +eat&trap an+ it is en.ironmentally su optimal as 0ell, <t pro+u!es !apital +estru!tion,2 <t is also t&e e2planation of t&e past fifty years of energy poli!y failures, 17,P1 # Ear3ets an+ Ear3et Parti!ipants B Clearly, t&e regulatory frame0or3 nee+s a+apting, t&e gri+ nee+s to start eing .ie0e+ as more of a !ommons, an+ less as a one 0ay pipelineI it 0ill e !riti!al to +istri ute loa+s, Competition among energy suppliers is not enoug&, an+ in fa!t !ounter pro+u!ti.e, for it ma3es t&e pro lem more intra!ta le, y +istra!ting us 0it& ma3ing t&e stupi+ t&ings 0e are +oing !&eaper, -&is is 0&at 0e &a.e een +oing 0it& t&e energy
1 2 &ttp(//000,.lis!ony,!om/2014/0"/1F/energy#effi!ien!y#3illing#softly/ &ttp(//000,.lis!ony,!om/201"/0F/20/ny!#!lean#&eat#!apital#+estru!tion/

#%#

effi!ien!y !ra*e( ma3ing a a+ situation 0orse y ma3ing it e!onomi!ally attra!ti.e to perpetuate t&e pro lem, G&at is nee+e+ is a frame0or3 for property o0ners to ma3e +e!isions, 6irst of all t&at s&oul+ e +one on a 0&ole uil+ing asis an+ in!lu+e an un+erstan+ing of t&e fungi ility of energy, e,g, t&at ele!tri!al a/! !an e repla!e+ y solar t&ermal );AC, repla!ing t&e oil or gas furna!e as 0ell, -o+ay, 0&at mostly &appens is 0e ta3e t&e gi.en infrastru!ture for grante+, an+ unt&in3ingly 0aste our money on ma3ing it more effi!ient, an+ 4sa.ing energy,5 Ge s&oul+ sa.e all t&e energy 0e !an, if it is e!onomi!al, ut 0e s&oul+ really figure out t&e repla!ement !y!les an+ &o0 0e !an !&ange o.er to a rene0a le infrastru!ture, an+ in most !ases t&at 0ill e a pro!ess in se.eral steps, an+ figuring out t&e engineering an+ t&e e!onomi!s is not tri.ial, So mo+els for t&ese +e!isions nee+ to e +e.elope+, 6or t&e !onsumer mar3et t&is sort of &elp nee+s to !ome from t&e state, Consumers !an learn to use t&e EPA@s )ome Energy Yar+sti!3, an+ a "0 year CAPE Eo+el of t&eir property, an+ to see eyon+ repla!ing t&e same !omponents 0it& more effi!ient ones, an+ perpetuate t&e pro lem, -&ere s&oul+ e training to &elp people see t&roug& t&e fungi ility of energy, an+ to un+erstan+ t&e po0er of a!ti.e an+ passi.e t&ermal te!&nologies in any on#site appli!ations, Eost importantly, 0e nee+ to ta3e into a!!ount t&e fa!t t&at t&e e!onomi!ally optimal 0ay of ma3ing t&ese !&anges may e se.eral steps +eep an+ !an ta3e 10#20 years to a!!omplis&, -&is is !riti!al, for t&e !urrent fas&ion of ma3ing +e!isions ase+ on t&e marginal energy sa.ings of e:uipment, means t&at property o0ners are !onstantly +esigning t&emsel.es into a !orner y

# 10 #

gi.ing t&eir money to t&e last &appy, s&iny salesperson 0&o offers a 4self#li:ui+ating5 an+ 4no money +o0n5 solution, t&at may e 0il+ly su optimal, an+ lo!3s t&em into a !ounterpro+u!ti.e solution, ot& from an engineering stan+point > e!ause it p&ysi!ally lo!3s t&em out of etter t&ings? an+ e!ause it ties up t&e finan!ial !arrying !apa!ity of t&eir property for often su optimal solutions, ;arious in!enti.e programs, in!lu+ing ta2 !re+its &a.e ma+e t&ese a+ +e!isions more pre.alent, Ey fa.orite e2ample of &o0 +ysfun!tional t&e 4energy effi!ien!y5 mo+el of +e!ision ma3ing is, is t&e 4Energy Star rate+ tan3less &ot 0ater &eater,51 )ot 0ater potentially pro.i+es !&eap 4 atteries5 >energy storage? for eit&er solar t&ermal or geot&ermal, -&e pro lem is not ma3ing gas &eat more effi!ient, -&e pro lem is ma3ing a uil+ing more e!onomi!al to operate an+ re+u!e 8)8#emissions in t&e pro!ess, -an3less &ot 0ater &eaters are .alue +estroying if t&ere is any potential for t&ermal solutions, Anot&er e2ample of failure are solar P; PPAs, 1F,P1 B Ear3ets an+ Ear3et Parti!ipants B t&e 8reen 'an3, -&e 8reen 'an3, to e effe!ti.e, s&oul+ !reate t&e stan+ar+s for t&e mar3etpla!e, y !reating an effe!ti.e un+er0riting poli!y, 0&i!& it !an enfor!e y ta3ing t&e lea+ on pro7e!ts, typi!ally y un+er0riting t&e setup !osts for :ualifying pro7e!ts, an+ stipulating t&at it is pai+ a!3 first, so it !an play t&e role of initiator an+ set t&e stan+ar+s t&at 0ill !reate a mar3et for finan!ing rene0a le energy retrofits, -a3ing t&is route it !an pro a ly !ontrol J10#J20 illion 0ort& of pro7e!ts 0it& its J1
1 &ttp(//000,.lis!ony,!om/201"/01/12/energy#star#!ounterpro+u!ti.e/

# 11 #

illion in fun+ing, 6urt&er, y eing pai+ off first, ase+ on a!&ie.ing !ertain en!&mar3s, t&e 8reen 'an3 !oul+ t&en !ontinue to roll o.er into more pro7e!ts, an+ truly a!t to see+ t&e mar3et, 'esi+es t&e 8reen 'an3, t&ere is t&e important me!&anism of PACE finan!e, 0&i!& is still in its infan!y in NY, )o0e.er, in its !urrent form it is missing its mission, -&e name means Property Assesse+ Clean Energy, ut t&e pro7e!ts it is pursuing are mostly energy effi!ien!y type pro7e!ts, 0&i!& are a mismat!& 0it& t&e type of long term finan!ing it pro.i+es, an+ t&us finan!ially a perilous un+erta3ing for ot& len+ers, or in.estors an+ for uil+ing o0ners/ orro0ers,1 En.ironmentally also, pro7e!ts 0it& 10#209 8)8#re+u!tions +on@t ma3e any sense if t&ere are plenty of pro7e!ts to e foun+ t&at !oul+ offer 109 8)8#re+u!tions an+ &ig&er, 1%,P1 B -ransportation B Enormous potential for rene0a le energy &ere, Ne0 Yor3 City is 0in+ier t&an t&e presume+ 40in+y !ity,5 0it& 0in+ spee+s a.eraging a out a &alf a 3not &ig&er, 20,P1 B En.ironment an+ Pu li! )ealt& B Yes to !lean energy, an+ again +on@t ma3e energy effi!ien!y an en+ in itself, E2ample( t&e typi!al NY apartment uil+ing is !apa le of RE !on.ersions, an+ in t&e pro!ess );AC an+ D)G >Domesti! )ot Gater? !oul+ e +one 0it& solar t&ermal an+/or geot&ermal, As a result, most gas !an e eliminate+ from uil+ings, an+ uil+ings !an potentially s0it!& to all#ele!tri! !oo3ing, eliminating a serious sour!e of in+oor air pollution, 0&i!& t&en in turn fa!ilitates tig&ter 0in+o0s at t&e ne2t 0in+o0 repla!ement !y!le, an+ potentially &eat#re!o.ery
1 &ttp(//000,.lis!ony,!om/2014/0"/"1/self+estru!tion#pa!e#finan!e/

# 12 #

.entilation, 21,P$ # Roa+map to su!!ess B Again, forget energy affor+a ility as a primary goal, an+ mo.e on to re+u!ing 8)8#re+u!tions y !reating .alue 0it& rene0a le energy solutions finan!e+ on t&e asis of energy sa.ings, -o t&e e2tent t&at t&ese are rental properties, t&ere s&oul+ e a prote!tion so tenants s&are in t&e upsi+e, <n effe!t, e.ery rene0a le energy implementation means a partial energy pri!e &e+ge at a gi.en le.el, Pro a ly ele!tri!al an+ '-H metering s&oul+ e!ome t&e norm, an+ illing in multi#family uil+ings s&oul+ e +one eit&er t&roug& uil+ing o0ners or t&roug& utility !ompanies, if DPS !an get t&em to a!!ept t&e role of illing for "r+ parties, C0ners s&oul+ e eager to s&are t&e sa.ings, 0&i!& 0ill result in &ig&er o!!upan!y, A really !riti!al t&ing 0ill e to get energy !ompanies intereste+ in !o#in.esting 0it& t&eir !ustomers, 22,P$ # 8)8#re+u!tions, -&e o 7e!ti.es are great, 109 y 20"0 an+ F09 y 2010, ut t&e plan s&oul+ refle!t t&e fa!t t&at t&erefore it is un+esira le to +e+i!ate s!ar!e resour!es to any pro7e!ts t&at a!&ie.e less t&an 109 8)8#re+u!tions, Energy Effi!ien!y an+ fuel s0it!&ing an+ ot&er marginal tin3ering s&oul+ e!ome t&ings of t&e past, 2",P$ # Ro ust E!onomi! A!ti.ity B Yes, rene0a le te!&nology 0ill e a oom for at least a generation, ut it s&oul+ e re!ogni*e+ up front t&at t&e real goal is to +e.elop a permanent e!onomi! e+ge 0&i!& 0ill +e.elop ot&er usiness in t&e future, 24,P$ B <n!rease+ System Effi!ien!y B A!ti.e parti!ipatory +e.elopment t&at in!lu+es t&e utilities an+ system operators s&oul+ allo0 a !olla orati.e pro!ess in 0&i!& impro.e+

# 1" #

utili*ation of t&e gri+ !an gui+e in.estment, <t is a .ali+ part of t&e e:uation, E2amples mig&t in!lu+e e,g, running geot&ermal &eat pumps on time of use meters, an+ from solar or 0in+ po0er y +ay, 21,P7 B <mpro.ing energy affor+a ility B )ere again, t&e fo!us on energy effi!ien!y pro+u!es an analyti!al +ea+ en+, e!ause energy sa.ings is a limit fun!tion, so 0e are al0ays painting oursel.es into a !orner, -&e !orre!t posture is to .ie0 rene0a le energy as an asset, an+ to learn to i+entify t&e 4lo0 &anging fruit5 to !on.ert to rene0a le energy, pai+ for from energy sa.ings >0it& appropriate finan!e?, an+ ma3e :uantum 7umps in green &ouse gas re+u!tion in t&e pro!ess, -&ere are so many opportunities to re+u!e 8)8@s in 0ays t&at are e!onomi!ally pro+u!ti.e, t&at t&ere is no nee+ to e.er sele!t any pro7e!ts on t&e asis of 7ust !ost re+u!tions alone, E.ery single RE implementation puts in a pri!e &e+ge at a gi.en pri!e le.el, so if it is e!onomi!ally 7ustifie+ to+ay, it 0ill result in !ost !ontainment, Energy effi!ien!y +oes &a.e a role in RE, an+ in fa!t 0ill +ire!tly lo0er !apital outlays if it re+u!es t&e installe+ !apa!ity nee+e+, 2$,P7 # <nitiati.e 01, -&ere is no nee+ to realign energy effi!ien!y poli!ies, sin!e EE is a finan!ial, e!onomi!al, an+ en.ironmental +ea+ en+, -&ey s&oul+ e a an+one+ altoget&er, <t 0as an un+erstan+a le mista3e in t&e past, 0&en 0e t&oug&t t&at it 0as simple asset allo!ation pro lem, an+ t&e marginal +ollar oug&t more +eman+ re+u!tion t&an supply in!rease, At t&is point it is a et against oursel.es, an+ !ertainly not a 0ort&0&ile in.estment e!ause of +iminis&ing returns, an+

# 14 #

en.ironmental irrele.an!e an+ e.en regressi.eness, Spe!ifi!ally, utility in.estments in effi!ien!y, 0&ere appropriate s&oul+ e ma+e in t&e normal !ourse of t&eir a!!ounta ility to t&eir s&are&ol+ers, No nee+ to 0aste pu li! resour!es on t&at, Ge s&oul+ not fo!us ratepayer fun+s on energy effi!ien!y as an en+ in itself, ut on e!onomi!ally .ia le opportunities to ma3e a real +ifferen!e 0it& RE, Cn!e t&e pointlessness of EE as an en+ in itself is un+erstoo+, it s&oul+ e left to pro.i+ers an+ users of !ar on energy, 46a!ilitate greater a!!ess,,,5 # RE, not EE, =o0 in!ome !ommunities are espe!ially .ulnera le to t&e EE +elusion, -&e only t&ing 0e !an affor+ is RE, not EE, Solar t&ermal &ot 0ater alone !an e a life sa.er, an+ imme+iately ma3es for in!rease+ resilien!e, 27,P7 B <nitiati.e 02 B 'e on t&e loo3out for t&e EE !onfusion, an+ also for t&e storage opportunity in &ot 0ater on t&e resi+ential si+e, Solar t&ermal 0it& &ot 0ater storage to &ar.est pea3 energy at %F9 effi!ien!y is far superior to solar P; at 179 0it& at est e2pensi.e !&emi!al atteries >t&oug& it !an e etter in !om ination 0it& a geot&ermal system t&at !an +o energy &ar.esting?, 2F,PF B <nitiati.e 02a B Yes, +istri!t solutions 0ill e ne!essary, an+ appropriate re#regulation, espe!ially if a taller uil+ing ta3es a0ay s&a+e an+ 0in+ from smaller ones an+ a !ooperati.e solution is +esira le, 'ut also t&e famous split in!enti.e issue et0een lan+lor+s an+ tenants in apartment uil+ings nee+s to go, parti!ularly if uil+ings !an generate more po0er t&emsel.es, an+ also pro.i+e !entrali*e+ );AC, not as a matter of lu2ury, ut effi!ient use of energy,

# 11 #

2%,PF B <nitiati.e 02! B yes t&e life !y!le .alues are important, t&e mo+eling tool is EPA@s Energy Star Portfolio Eanager, <n NYC =o!al =a0s F4/F7/FF s&oul+ e refo!use+ on energy au+its t&at assess !urrent performan!e an+ pro.i+e an up+ate+ "0 year energy infrastru!ture plan e.ery 1 years, in!lu+ing an assessment of RE potential in line 0it& life !y!les of uil+ing infrastru!ture, -&e fo!us nee+s to e s&ifte+ a0ay from EE eyon+ s&ort pay a!3s, lest it lea+ to !apital +estru!tion, 0&en it 0oul+ e more pro+u!ti.e to sa.e up to0ar+s RE infrastru!ture impro.ements t&at !an a!&ie.e :uantum 7umps in 8)8#re+u!tions, "0,PF B <ntiati.e 0", Stan+ar+s, -&is paragrap& !ontinues to !onfuse EE as an en+ in itself, 0&i!& it is not, <f 0e &a.e no option ut to stay on fossil fuels in a uil+ing, 0e ma3e it as effi!ient as e!onomi!ally realisti!, ut t&e future is in rene0a le infrastru!ture, 0&i!& alone truly eliminates 8)8#re+u!tions, Stan+ar+s are important, ut more important is e+u!ation a out t&e rig&t 0ay to ma3e energy +e!isions an+ information, Current pra!ti!es mostly reinfor!e !ounterpro+u!ti.e +e!ision ma3ing, -&ere !oul+ also e legislati.e opportunities t&at 0oul+ for!e !&ange, starting 0it& man+ating a !omplete+ EPA )ome Energy Yar+sti!3 0it& e.ery sale of a resi+en!e, in!lu+ing t&e supporting energy ills, so a ne0 o0ner &as t&e &istori!al re!or+s to fa!ilitate +e!isions a out energy upgra+es, "1,PF B Hnleas&ing t&e Po0er of Pri.ate Se!tor Energy 6inan!ing, 8reen 'an3, PACE, an+ ot&er resour!es, -&e reason t&e one time su si+y regime &as een a +ea+ en+, is e!ause it &as not fo!use+ on +oing 0&at is goo+ for property o0ners, ut on 4 ri ing5 >in!enti.i*ing? property o0ners to +o 0&at is goo+

# 1$ #

for energy !ompanies an+ utilities, -&e ne0 mo+el is to a!&ie.e ma2imum 8)8#re+u!tions y en&an!ing uil+ing .alues t&roug& rene0a le energy retrofits, an+ finan!ing only pro7e!ts t&at a!&ie.e 109 or &ig&er 8)8 re+u!tions, At t&at le.el t&e returns in t&e form of property .alues 0ill e &ig& also, an+ t&e PACE mar3et 0ill e illions, not millions as it is no0, as long as t&e PACE portfolio is mainly energy effi!ien!y pro7e!ts, Cn a finan!ial le.el, EE se!uriti*ations 0ill struggle, an+ e!ome uninteresting as more analysts un+erstan+ t&e la!3 of a soun+ finan!ial/e!onomi! rationale to support t&em, 0&ile se!uriti*ations in t&e 10K9 8)8#re+u!tion area 0ill e 0ell re!ei.e+ e!ause t&ey are finan!ially soun+, Cn!e t&e 8reen 'an3 em ra!es t&is mission it !an truly e a su!!essful pioneer, an+ !reate a mar3et so as to e.entually ma3e itself superfluous in t&e long#run, an+ its people s&oul+ &a.e rig&t futures in pri.ate in+ustry, "2,P% B <nitiati.e 04, 8reen 'an3, -&e 8reen 'an3 !an only su!!ee+ if it is su!!essful in s&ep&er+ing t&e rig&t 3in+s of pro7e!ts to !ompletion, an+ esta lis&es t&e fa!t t&at &ig& 8)8# re+u!tion pro7e!ts are finan!ially soun+ an+ 0ort& finan!ing, Clearly, 0it&in t&e man+ate of t&is ne0 plan t&at EHS- mean t&at pro7e!ts nee+ to e o.er 109#8)8 re+u!tion initially, Clearly also, t&at must mean t&at t&e primary fo!us s&oul+ e on t&e +eman+ si+e of t&e gri+, for t&at is 0&ere :uantum a+.an!es are possi le, As 0e &a.e pointe+ out in our Da'2 PlaNYC2020 >&ttp(//000,s!ri +,!om/+o!/1F7$1$"7/Da'2#PlaNYC2020# Draft? report out +uring t&e 'loom erg a+ministration, RE is an option for t&e ma7ority of NYC@s ol+#line multi#family

# 17 #

uil+ings, ut instea+ t&e !ity +i.erte+ t&ese to urning gas un+er t&e NYC Clean )eat program, At t&e en+ of t&e 'loom erg a+ministration, t&e !ity starte+ a stu+y on geot&ermal energy for NYC, an+ at t&e same time t&e Hr an 8reen Coun!il pu lis&e+ t&e %0 y 10 report, 0&i!& too3 a similar approa!& to our Da'2 PlaNYC2020 report, ut a!ross a 0i+er array of uil+ings, -&ese approa!&es all i+entify t&e potential for rene0a le retrofits 0it& a o.e 109 8)8 re+u!tion in Ne0 Yor3, an+ sin!e 0e &a.e limite+ fun+s y +efinition, t&is is 0&ere 0e s&oul+ fo!us, A !ore part of t&e para+igm !&ange t&at t&e an3 must spear&ea+, pro a ly in !on7un!tion 0it& NYSERDA is !onsumer e+u!ation, as in+i!ate+ else0&ere in t&ese !omments, <t s&oul+ re:uire stan+ar+s su!& as t&e use of EPA@s Energy Star portfolio manager, an+ "0 year !apital u+gets as part of its :ualifi!ations of pro7e!ts, -&e goo+ pro7e!ts !an pay for 8)8#re+u!tions from energy sa.ings, an+ in!rease t&e .alue of t&e property in t&e pro!ess, Cn!e t&is is un+erstoo+, t&is energy pro lem 0ill e!ome instrumental in !reating e!onomi! .alue, -&e mar3et 0ill +o t&e rest, for properties t&at !an !on.ert to a o.e 109 rene0a les 0ill go up in .alue, an+ properties t&at !an@t 0ill lose .alue, <t 0ill e un+erstoo+ t&at EE !an only slo0 t&e sli+e, an+ se!uriti*ations of EE portfolios 0ill e!ome in!reasingly +ifferent, e!ause t&ere is no soun+ t&eory to support t&eir .aluation, RE se!uriti*ations, PACE or ot&er0ise, 0ill flouris&, on!e it is un+erstoo+ t&at t&ey uil+ asset .alues, See also( &ttp(//000,.lis!ony,!om/201"/07/01/falla!ies#energy# effi!ien!y#loans/ Potentially, t&e 8reen 'an3 !oul+ e.en play a role in &elping

# 1F #

!onsumer an3s a+opt 0inning green un+er0riting rules, ensuring t&e :uality of t&e resulting se!uriti*ations, to e +enominate+ as 10K9 8)8#re+u!tion, -&ere !oul+ e green mortgages >mortgage !um PACE loan for a uyer 0&o inten+s to !on.ert a property to rene0a le energy?, green se!on+ mortgages, 10K PACE on+s, 0&i!& in general s&oul+ e &ugely !onstru!ti.e to uil+ing property .alues, 0&ile stopping to t&ro0 goo+ money after a+ y su si+i*ing t&e fi2ing up of properties t&at !annot ma3e t&e !&ange, "",P% B <nitiati.e 01 B Rene0a le Energy Poli!ies, Ge +o &a.e important resour!es t&at are 0oefully un+eruse+ sometimes, starting 0it& t&e 0in+ier !ity >NYC, 0it& &ig&er a.erage 0in+ spee+s t&an t&e 40in+y !ity5?, )o0e.er, efore anyt&ing else 0e nee+ to reali*e t&at etter finan!ial an+ e!onomi! +e!ision ma3ing y property o0ners is t&e !entral pro lem, an+ t&at in t&e past >an+ still going on to+ay? ta2 in!enti.es an+ NYSERDA programs &a.e all &elpe+ to instill 0rong +e!ision ma3ing &a its among property o0ners, starting 0it& t&e fo!us on energy effi!ien!y, an+ !ompoun+e+ y t&e &a it of using marginal pay a!3 of !omponents from energy sa.ings, along in!enti.es at t&e !omponent le.el, .ersus &olisti!, property# le.el in!enti.es, Spe!ifi!ally( # t&e emp&asis nee+s to s&ift a0ay from in!enti.es altoget&er, people nee+ to e taug&t soun+ e!onomi!s first, # if t&ere are to e in!enti.es, t&ey s&oul+ e aime+ at property# le.el 8)8#re+u!tion targets, not at t&e te!&nology le.el, >Note &o0 t&e 'au!us energy ta2 o.er&aul proposes t&is ut limits it to t&e supply si+e, Cf !ourse t&e +eman+ si+e is far more rele.ant an+ s&oul+ e in!lu+e+,? # Pre#+e.elopment 0or3 is t&e most important area to fo!us on,

# 1% #

an+ i+eally !oul+ e fo!use+ on a template# ase+ approa!&, 0&i!& !oul+ e.en e self#li:ui+ating, if property o0ners !an simply li!ense a gi.en template, <t mig&t e a ni!e i+ea for NYSERDA transitioning o.er time to e!oming self supporting, so t&at rate payer sur!&arges !an e eliminate+, # Resilien!e s&oul+ mo.e up on t&e agen+a, <n!reasing energy in+epen+en!e, e.en if it is only partial is &ig&ly rele.ant for sur.i.a ility, Aust a single solar t&ermal 0ater &eater on a property materially impa!ts sur.i.a ility, <t ma3es a &uge +ifferen!e if you &a.e at least &ot 0ater +uring a po0er outage, "4,P10 B C&arge NY B Ge fer.ently &ope t&ose E; C&arging Stations 0ill e po0ere+ from rene0a le energy, -&is !oul+ in!lu+e solar !arports, ut also 0in+ tur ines 0ill e a .ia le sour!e in many lo!ations, E;s are green only >an+ not .ery green at t&at if life#!y!le !ar on footprints are !onsi+ere+? if t&ey use green po0er, As t&e gri+ e!omes more populate+ 0it& rene0a le energy an+ as t&e +eman+ goes +o0n +ue to its ne0 purpose as a a!3up, 0e &a.e a ne0 loa+ t&at !an ta3e a+.antage of t&is green po0er, an+ !an impro.e utili*ation, 0&i!& is !riti!al to gri+ e!onomi!s, -&e +esign of t&e !&arging stations !an e su!& t&at 0it& some storage an+ +eman+ re+u!tion >or in!rease? e!ome an+ integral part of t&e goal of 8)8 re+u!tions, "1, P10 B Energy Effi!ien!y Portfolio Stan+ar+s, )opefully t&is effort s&oul+ e a an+one+, -&e time for EE is gone, C&ange &appens on t&e margin, an+ t&ere are enoug& pro7e!ts t&at offer 10K9 8)8#re+u!tions !&asing after limite+ fun+ing, so 0e s&oul+ not 0aste pre!ious resour!es on energy effi!ien!y pro7e!ts t&at are effe!ti.ely an in+ire!t su si+y of t&e !ar on

# 20 #

fuel in+ustry, See &ere( &ttp(//000,.lis!ony,!om/2014/0"/1F/energy#effi!ien!y#3illing# softly/ <n s&ort 0e !an@t e prioriti*ing EE pro7e!ts at 11#219 8)8# re+u!tion, if 0e &a.e plenty of pro7e!ts offering 10K9 8)8# re+u!tion, 0&i!& y nature offer &ig&er finan!ial returns to all parti!ipants, t&an3s to t&e fa!t t&at EE pro+u!es +iminis&ing returns, an+ RE &as t&e potential for !ompoun+ returns, -&e only reason 0e@re not a0are of t&em is e!ause 0e@.e traine+ e.eryone to e loo3ing for energy effi!ien!y opportunities, 0&en t&ey s&oul+ e loo3ing for Rene0a le Energy opportunities, "$,P10 B NY#Sun <nitiati.e B <n t&e !onte2t of aiming for property# le.el 8)8#re+u!tion o 7e!ti.es, all te!&nology fo!use+ o 7e!ti.es s&oul+ go, Clearly, solar P; at 179 effi!ien!y in energy !on.ersion 0oul+ an+ s&oul+ lose out to solar t&ermal, 0&i!& offers %F9 effi!ien!y an+ great ease of energy &ar.esting, e!ause pro!ess &eat !an e store+ as pre&eate+ &ot 0ater, "7,P10#'uil+smartNY, Again, sin!e marginal energy effi!ien!y is not an o 7e!ti.e in its o0n rig&t, t&is initiati.e s&oul+ e re# fo!use+ on t&e ma2imal 8)8#re+u!tions t&at !an e a!&ie.e+ an+ finan!e+ from energy sa.ings, 'e!ause of t&eir lo!ations many go.ernment uil+ings !an e an!&ors in +istri!t &eat/!ooling solutions, <t s&oul+ e note+ t&at e.en to+ay regulations permit e2porting of pro!ess &eat >as oppose+ to ele!tri!ity? to neig& oring uil+ings, so if a uil+ing !oul+ &ouse a &uge solar t&ermal plant, an+ e2port t&e asso!iate+ pro!ess &eat, some a+7a!ent uil+ings !oul+ possi ly run

# 21 #

);AC an+/or D)G from t&at fee+, "F,P10 B ReC&argeNY B pro.i+ing lo0 !ost po0er is regressi.e en+ea.or if it is not !onstru!ti.e to t&e ne!essary para+igm s&ift to0ar+s rene0a les an+ 8)8 re+u!tion, an+ it amounts again to a left#&an+e+ >unintentional? su si+y to t&e !ar on fuel e!onomy, <nitiati.es li3e t&is s&oul+ also e refo!use+ on ma2imal use of site#+eri.e+ rene0a le energy >SDRE?, "%,P11 B Eore Resilient an+ 6le2i le Po0er 8ri+, )ere again t&e t&in3ing nee+s to !&ange to0ar+s property le.el energy in+epen+en!e, Note again t&at e.en partial in+epen+en!e !an e a life#sa.er, G&at if apartment uil+ings !oul+ at least 3eep !ommon areas lit +uring an outage, an+ so onL 40,P11 B <nitiati.e 0$ , =et@s not forget t&at our go.ernment &as een su si+i*ing t&e elimination of 4 e&in+ t&e meter storage te!&nology5 y pro.i+ing in!enti.es to install 4Energy Star Rate+ tan3less &ot 0ater &eaters,5 )ot 0ater storage is t&e !&eapest form of 4 atteries5 0e +o &a.e as any solar t&ermal or geot&ermal install 0ill s&o0 you, espe!ially 0&en t&at geot&ermal installation is +ri.en y eit&er 0in+ or solar P;, <n general t&ese types of +istortions !ause+ y in!enti.es at t&e !omponent le.el &a.e gi.en us &uge set a!3s, -&e mission of a property o0ner is NC- to urn gas more effi!iently >+espite 0&at t&e Energy Star la el may imply?, it is to pro.i+e &eat an+ &ot 0ater for t&eir property, 'y in!enti.i*ing t&e !omponents, 0e &a.e a!!ountants engineering energy systems, 41,<nitiati.e 0$! B allo0ing ele!tri! utilities to o0n +istri ute+ resour!es # -&is is !riti!al, -&e logi!al :uan+ary of t&e energy in+ustry is t&at it ma3es more money y selling more energy

# 22 #

0&i!& is not 0&ere 0e 0ant to go, 'ut t&e energy in+ustry &as &uge <P, an+ e2perien!e in energy systems, an+ is in great position to fa!ilitate +e.elopment of +istri ute+ system, an+ e!ome a !o#in.estor 0it& t&eir !ustomers, Cur e2perien!e s&o0s t&at generally real estate people +on@t un+erstan+ t&e e!onomi!s an+ engineering of SDRE, ut people 0&o &a.e +e.elope+ po0er plants an+ oil refineries +o, 42,<nitiati.e 0$e B pu li!/pri.ate partners&ips B <n+ee+, -&e HS pre!e+ents in t&is area &a.e not een promising, an+ mostly e!ame a !on+uit for so!iali*ing ris3s an+ pri.ati*ing profits # 4Gelfare for !apitalists,5 -&ere are rig&t 0ays of +oing it, as suggeste+ in our !omments a out t&e 8reen 'an3, -&e ris3 of t&e setup !osts for a pro7e!t !an at times e +isproportionate for t&e in.estor in a single pro7e!t, 8o.ernment &o0e.er &as t&e o.er.ie0, an+ all t&ese e2perien!es are 0ort&0&ile in.estments in e2pertise, <f t&e 8reen 'an3 sponsors setup !osts, it s&oul+ e a le to uil+ e2pertise to lo0er t&e setup !osts for su se:uent appli!ations, so t&at any early losses still pay off in t&e long run, <n +oing so, t&e 8reen 'an3 in !om ination 0it& NYSERDA !an ultimately lo0er t&e setup !osts, 0&i!& are potentially a ig &ur+le, 6or e2ample, a 0in+ stu+y may !ost J10M an+ si2 mont&s, t&e num er of failures s&oul+ e lo0 ut it@s a ris3 for an in+i.i+ual pro7e!t, ut 8reen 'an3/NYSERDA !oul+ tie t&is in 0it& t&eir geograp&i!al +ata ase for 0in+ potential an+ &elp to re+u!e ris3, -&ere !oul+ e many ot&er e2amples, -&is e2ample suggests 0ays t&at t&e State >8reen 'an3/NYSERDA? !oul+ re+u!e ris3 to pro7e!ts, 0&i!& 0oul+ progressi.ely ma3e it easier to attra!t pri.ate in.estment, Along t&ese lines, etter "P in.esting mo+els !an e

# 2" #

!onstru!te+, e,g, in return for t&is 3in+ of ris3 re+u!tion in t&e setup, t&e 8reen 'an3 !oul+ legitimately +eman+ t&at t&ey are pai+ a!3 first, +epen+ing on !ertain !riteria, so t&at t&ey !an roll o.er t&eir fun+s into ne0 pro7e!ts, -&eir role s&oul+ e starting pro7e!ts not finis&ing t&em, 4",P11 B <nitiati.e 07 B soft !osts, .i+e N42 a o.e, 44,P12 B <nitiati.e 0F! B -&ere s&oul+ e a !lear >as possi le? +emar!ation a!&ie.e+ not only of floo+ *ones, 0&i!& may re:uire resilien!e measures to in!lu+e t&ings li3e se0age an+ ot&er ser.i!es, ut also of t&e ne2t an+, 0&ere partial resilien!e s&oul+ e!ome a re:uirement, Again SDRE is t&e est a.enue for su!& retrofits, 41,P12 B 8i.ing Customers Eore Control C.er -&eir Energy Hse, # Again &ere 0e s&oul+ e min+ful of A'= type finan!ing at t&e !omponent le.el, 0&i!& is ot& a !ause an+ a symptom of erroneous +e!ision ma3ing, At t&is le.el t&e Energy Star la el is simply a 0ay to ena le s&opping 0it&out guilt, an+ not really a !onstru!ti.e solution in t&e long run, 4Cn ill5 finan!ing s&oul+ e limite+ to serious upgra+es, not simplisti! EE on essentially easily falsifia le premises, or e.en solar PPAs 0&i!& most often are an inferior !&oi!e, -&e ris3 &ere of ma3ing it 4easier5 to finan!e upgra+es, is t&at it 0ill lea+ to t&e ma3ing of upgra+es t&at are easy to finan!e, li3e solar P; at t&e moment, Regar+less of 0&at met&o+ of finan!ing, a !omplete+ )ome Energy Yar+sti!3 or Portfolio Eanage mo+el s&oul+ e re:uire+, along 0it& a "0 year !apital u+get an+ a te!&nology plan, so it is o .ious t&at property o0ners +on@t +o somet&ing t&at 0ill lo!3 somet&ing etter a fe0 years later, <t is pointless

# 24 #

in t&e e2treme to gi.e !ustomers 4!ontrol5 o.er a pro lem t&ey &a.e no 0ay of un+erstan+ing, let alone 4!ontrolling,5 4$,P1" B <nitiati.e 10 B Competition for energy ser.i!es is a +u+, unless !ustomers are ena le+ to ma3e informe+ +e!isions, -&e ris3 &ere is t&e famous :uote of )enry Ca ot =o+ge( 48entlemen, !an 0e appear to e +oing somet&ing,5 Git&out instilling t&at !apa ility, 4!ompetition5 0ill 7ust result in more &appy, s&iny sales people anging on t&e +oors 0it& su optimal solutions an+ se+u!ti.e finan!ing, t&at lea.es ot& property o0ners an+ so!iety at large 0orse off, -&e 4su!!ess5 of solar P; PPAs an+ leases pro.es it, for it is nearly al0ays a su optimal solution in our region, 47,P1" B <nitiati.e 11 B <nformation is !riti!ally important in+ee+, along 0it& e+u!ation as in+i!ate+ a o.e, Energy effi!ien!y on!e again is a !ustomer retention poli!y for t&e energy !ompanies, !ustomers s&oul+ learn t&eir options for energy in+epen+en!e an+ greater resilien!e t&roug& SDRE, 4F,P1" B <nitiati.e 12 # -ransportation +i.ersity, Again, +istri ute+ !&arging stations 0it& SDRE in resi+ential areas !an form an important part of t&e solution, an+ may in fa!t e part of +istri!t solutions, Cne pro7e!t 0e 3no0 of !oul+ &a.e e2!ess ele!tri!al generation, an+ &as a s!&ool par3ing lot ne2t +oor, <t !oul+ easily sell off e2!ess pro+u!tion to E; users in t&e s!&ool, 0&i!& 0oul+ re:uire a regulatory !&ange, 4%,P14 B <nitiati.e 14 B Clean -e!& inno.ation an+ !ommer!iali*ation, -&is item also plays +ire!tly into 0ays an+ means for t&e 8reen 'an3 an+ NYSERDA to s&ep&er+ ris3 re+u!tion in pro7e!t setups into a!tiona le 3no0#&o0 t&at !an

# 21 #

&elp mitigate ris3s for in+i.i+ual pro7e!t in.estors, 10,P4% B Eeasuring Progress, # -&e measurement of progress is essentially simple, an+ nee+s to &appen on a regular asis, annually, # <n!rease+ use of rene0a le energy s&oul+ re+u!e t&e energy intensity of t&e e!onomy, e!ause 0&ate.er le.el of rene0a le energy +eployment is a!&ie.e+ at any time e!omes a permanent energy pri!e &e+ge, # 'y s&ifting t&e fo!us to RE +eployments at t&e a o.e 109 8)8#re+u!tion le.el, progress to0ar+s t&e goal s&oul+ e stea+y, # De!reasing ele!tri! system pea3 +eman+ 0ill re:uire a massi.e s&ift to t&ermal te!&nologies, if t&e fore!asts of t&ree times as many %0 +egree +ays y 2010 !ontinue to !ome true, -&e progress of !limate !&ange nee+s to e in!orporate+ in measurements, Pure sur.i.a ility is at sta3e &ere, not 7ust energy sa.ings, # <f t&e mo+el suggeste+ &ere is follo0e+, an+ all pu li! 4effi!ien!y5 in.estments are stoppe+ an+ left et0een !ar on energy pro.i+ers an+ t&eir !ustomers, t&e relati.e role of fossil fuels s&oul+ +e!rease stea+ily, an+ t&is pri.ate effi!ien!y spen+ing s&oul+ e limite+ to t&e simple an+ o .ious in properties t&at !annot ma3e t&e s0it!& to rene0a le energy, an+ e for!e+ y t&e !ompetiti.e mar3et situation,

In Summary:
-&is ne0 energy plan 0it& e2pli!it goals of 109 8)8 re+u!tion y 20"0 an+ F09 y 2010 is a para+igm s&ift, -o a!&ie.e anyt&ing near t&ese goals, 0e 0ill &a.e to fo!us on Rene0a le Energy 0&i!& alone

# 2$ #

!an +rasti!ally re+u!e 8)8 re+u!tions, -&e 3ey issues !oul+ e +efine+ as follo0s(

Rene0a le Energy s&oul+ e t&e fo!us in or+er to re+u!e 8)8#emissions, Energy effi!ien!y is not a goal in itself, ut a se!on+ary o 7e!ti.e, as mu!& in a !ar on fuel system as in a rene0a le energy system, <t s&oul+ e left to !ar on energy !ompanies as a !ustomer retention poli!y, an+ +oes not +eser.e pu li! su si+y, Hn+er limite+ fun+ing >su!& as ringing J1 n to a trillion +ollar pro lem?, 0e !annot affor+ +e.oting pu li! resour!es to any pro7e!t t&at +oes not a!&ie.e at least 10K9 8)8 re+u!tions, an+ t&at alone eliminates simplisti! EE pro7e!ts, Ge nee+ to transition to a &olisti! approa!&, t&e smallest le.el eing a single property, an+ t&e fo!us s&oul+ s&ift a0ay from !omponent le.el in!enti.es, As long as fe+eral ta2 in!enti.es !ontinue to pull +e!isions in t&e 0rong +ire!tions, t&e state s&oul+ !ounter t&em 0it& o.erri+ing in!enti.es to ensure !orre!t +esigns, C.erall 8)8#re+u!tions per property, or lo!3, or !ommunity, or +istri!t, region, et!, s&oul+ e t&e goals, 'ut ne.er elo0 t&e 0&ole property le.el, lest 0e +esign oursel.es in a !orner, Stan+ar+i*ation of performan!e measurement is +esira le, an+ t&e EPA@s )ome Energy Yar+sti!3 an+ Energy Star Portfolio Eanager area a.aila le to +o t&e 7o , ;arious legal a+7ustments 0ill e nee+e+ to remo.e t&e fame+ split in!enti.e an+ ot&er su!& impe+iments,

# 27 #

6inan!ial/Energy litera!y is a 3ey ne!essity, People nee+ to un+erstan+ t&e fungi ility of energy, t&e reasons 0&y t&ermal te!&nology is 3ing in SDRE, an+ a "0 year !apital u+get for energy infrastru!ture s&oul+ e man+atory for any property o0ner, lest 0e +esign oursel.es in a !orner 0it& su optimal solutions, A !omplete+ EPA )ome Energy Yar+sti!3 or Energy Star portfolio manager s&oul+ e re:uire+ if any state fun+ing is in.ol.e+, along 0it& a "0 year !apital u+get for energy infrastru!ture, -&is 0ill result in &ig& :uality un+er0riting, an+ su!!essful se!uriti*ations, <n +oing so, t&e state 0ill !reate an e!onomi!ally pro+u!ti.e mar3et for !lean energy retrofits, E2amples of &o0 NC- to +o it are >among ot&er t&ings? tan3less &ot 0ater &eaters, an+ solar P; PPAs, 0&i!& are ot& su optimal solutions >in most !ases? an+ 0it& etter information t&ey 0oul+ not e as pre.alent as t&ey are to+ay, -&ey prey on t&e ignoran!e of !onsumers, an+ t&e state s&oul+ not let t&at !ontinue,

Green Financial Reform

-&ere are a set of interlo!3ing reforms t&at 0ill e .ery important to fa!ilitate t&e o 7e!ti.es of t&e Plan, ut 0&i!& are not mentione+, Some mention of a fe0 of t&ese 0as in!lu+e+ in t&ese !omments, ut t&is area +eser.es spe!ial attention, )ere are some i+eas for finan!ial an+ regulatory reform t&at 0oul+ e tremen+ously !onstru!ti.e to t&e goals of t&e plan, G&at !urrently goes for green finan!e is largely !ounterpro+u!ti.e, as < &a.e e2tensi.ely +o!umente+ else0&ere(

# 2F #

&ttp(//000,.lis!ony,!om/201"/10/2F/solar#ppas#impair# property#appre!iation/ &ttp(//000,.lis!ony,!om/201"/01/"0/ma#solar#ppa/ &ttp(//000,.lis!ony,!om/2014/0"/"1/self+estru!tion#pa!e# finan!e/ &ttp(//000,.lis!ony,!om/201"/12/01/energy#effi!ien!y#.oo+oo/ &ttp(//000,.lis!ony,!om/green#finan!e#property#.alue/ &ttp(//000,.lis!ony,!om/201"/07/01/falla!ies#energy# effi!ien!y#loans/

-&e opportunity for !onstru!ti.e reform !oul+ in!lu+e t&e follo0ing(

Clear gui+elines !oul+ e !reate+ on 0&at is or is not green finan!e, so t&e e.entually t&e 6-C !an !ra!3 +o0n on t&e +e!eptions t&at are no0 !ommon pla!e, Central to t&e 0&ole !on!ept s&oul+ e t&e uil+ing up of property .alues y mo.ing energy from lia ilities to assets, an+ t&erefore truly ena le t&e orro0er to uil+ e:uity, as 0ell as pro.i+e t&e len+er 0it& t&e !omfort of .erifia le asset appre!iation, so t&e initial mortgage an+/or asso!iate+ PACE finan!ing is lo0 ris3 as it s&oul+ e, -&e !urrent !rop of preten+ 4green finan!e5 is mostly A'=#type finan!ing ase+ on energy sa.ings, an+ ris3s !&erry pi!3ing properties 0it& respe!t to ot& engineering optimal energy infrastru!tures, an+ impairs t&e finan!ial !arrying !apa!ity of t&e property for serious retrofits, <t is largely a !onsumer frau+ t&at un+ermines t&e state@s goals for 8)8#re+u!tions, as mu!& as it +efrau+s property o0ners y &a.ing t&em +o su optimal

# 2% #

pro7e!ts,

PACE finan!e legislation s&oul+ e !&ange+ to +o 0&at t&e name implies Clean Energy finan!e, an+ not Energy Effi!ien!y finan!e, -&e 0&ole reason t&e PACE !amp &a+ to a!!ept t&e 109 of assesse+ .alue limitation in its !onfrontation 0it& 6annie Eae/6re++ie Ea! is e!ause t&ey fo!use+ on energy effi!ien!y an+ not !lean energy, as in Site Deri.e+ Rene0a le Energy, <f PACE a+opts proper SDRE ase+ un+er0riting stan+ar+s, foun+e+ on soun+ e!onomi!s, it 0ill !reate asset .alues, an+ no !ommunity !oul+ affor+ to e 0it&out PACE, <f PACE !annot +o it, ot&er forms of finan!e 0ill e ne!essary, Energy au+it an+ +is!losure re:uirements li3e Ne0 Yor3@s == F4/F7/FF s&oul+ e up+ate+ to fo!us on t&e same t&ing uil+ing up real estate .alues t&roug& SDRE, instea+ of impairing uil+ing .alues y o.er in.estment in Energy Effi!ien!y,

-&ere s&oul+ e a +is!losure re:uirement for e.ery property sol+ to pro.i+e t&e EPA Energy Yar+ Sti!3, along 0it& supporting +o!umentation for single family properties, A !omplete+ EPA Energy Star Portfolio Eanager profile, 0it& supporting +o!uments, for properties a o.e single family, in!lu+ing all !ommer!ial properties, if t&ey &a.e een o!!upie+ for t&e t0el.e mont&s pre!e+ing t&e sale, Properties a o.e 10,000 s:ft s&oul+ &a.e a !omplete+ Energy Star Portfolio Eanager profile, along 0it& supporting +o!uments, an+ an up to +ate >i,e, less t&an 1 years ol+? 1 year SDRE te!&nology map, NYSERDA !oul+ e instrumental in &elping an3s +e.ise

# "0 #

un+er0riting poli!ies ase+ on a soun+ analyti!al un+erstan+ing of t&e e!onomi!s of retrofits as &as een +e.elope+ in my log at 000,.lis!ony,!om, per&aps e.en a 4goo+ &ouse3eeping5 type of appro.al, 6or t&is to &appen, NYSERDA 0ill &a.e to ra+i!ally !&ange its fo!us in or+er to &a.e !re+i ility t&at t&eir poli!ies !reate .alue for property o0ners, As note+ t&e prior o.er#emp&asis on EE impairs property .alues e!ause of t&e pro lem of +iminis&ing returns,

Eore generally, NYSERDA !oul+ play a !onstru!ti.e role in a+.ising an3s an+ finan!ial institutions in energy frien+ly finan!e, E2ample( A fe0 years ago, an )D6C#operate+ property < 0as familiar 0it&, an+ 0&i!& &a+ &ig& potential for a ra+i!al SDRE retrofit, o taine+ CPC finan!ing for a uil+ing re&a , an+ t&e terms of t&e loan spe!ifi!ally for a+e re# engineering of t&e energy infrastru!ture, limiting upgra+es to more effi!ient mo+ern e:ui.alents of t&e e2isting e:uipment, <n ot&er 0or+s t&e operators 0ere for!e+ into a su optimal energy infrastru!ture e!ause t&e an3ers +i+ not appre!iate or un+erstan+ t&e e!onomi! potential of a serious rene0a le retrofit, -&ese !&anges pertaining to real estate finan!e 0ill t&en !reate an en.ironment 0&ere eit&er t&e state or t&e fe+eral go.ernment !an pro.i+e in!enti.es ase+ on 8)8#re+u!tions, an+ e assure+ of a :ui!3 an+ po0erful impa!t, <t s&oul+ e note+ t&at initiati.es li3e t&e ED6@s 4<n.estor Confi+en!e Pro7e!t,5 are !ompoun+ing t&e pro lem y attempting to +ress up t&e fun+amental analyti!al mista3e of

# "1 #

treating energy sa.ings as an asset into somet&ing a!!epta le to in.estors, -&e issue of +iminis&ing returns alone falsifies t&e premise, !ompoun+e+ furt&er y t&e fa!t t&at in an SDRE retrofit, often !ompletely +ifferent approa!&es to energy effi!ien!y must e ta3en, so in s0it!&ing tra!3s from EE to RE in an e2isting property, 0rite#offs 0oul+ result, EE for fossil fuels is +ifferent from EE for RE, Ge s&oul+ note one important positi.e point a out oil an+ gas( t&ey &a.e numerous &ig& .alue uses, so for our long#term 0ell eing, urning is .ery su #optimal, -&is !on!lu+es our !omments, Ge note t&at t&ere are multiple referen!es to t&e log of t&e un+ersigne+ 000,.lis!ony,!om 0&i!& !ontains a !ompre&ensi.e t&eoreti!al frame0or3 for t&e e!onomi!s an+ finan!e of rene0a le energy retrofits, <t is pu lis&e+ un+er a CC 'Y#SA =i!ense, -opi!s in!lu+e &ig& le.el +is!ussion of te!&nologies an+ t&eir integration potential, &o0 t&e !&anges 0ill affe!t property .aluation, an+ t&e analyti!al frame0or3 for Rene0a le Energy se!urities as oppose+ to Energy Effi!ien!y pla!ements, Yours sin!erely,

Rogier Fentener van Vlissingen