Emmaia Gelman, Center for Working Families emmaia@cwfny // (917) 517-3627

1. Emmaia Gelman, Center for Working Families emmaia@cwfny.org // (917) 517-3627 “Taking it to the States: Advancing the Green Economy in the Face of Federal Inaction” Good Jobs, Green Jobs Conference, Feb. 2011

2. Green Jobs/Green NY: Signed in October ‘09, now under RFP for work to begin 2011 Mass-scale retrofits + good local jobs • 1,000,000 homes in 5 years • 14,250 permanent jobs • ~$1000/year home energy savings • $5b in new capital invested in New York • Carbon savings = 617,000 cars …to build a sustainable retrofit economy in 5 years.

3. Greening as economic development • State-run program makes big players come to table • “No up-front cost” reaches huge lower-income sector • Retrofit Investment Fund raises $billions in capital • On-Bill Recovery lets participants repay costs slowly • Community groups connect homeowners & contractors • Training-to-jobs pipeline pulls in new local workers 

4. Funding retrofits & jobs • Public/Private investment vehicle generates continuous capital -- with standards attached. • On-Bill Recovery gives lenders good security, and protects vulnerable borrowers. • Flexible financing lets other funding streams join in (WAP, HOME repair funds, etc.)

5. Building a new market:The role of CBOs • Building community-contractor-labor networks • Setting job standards • “Transmission belts” to turn contacts into retrofits • Building contractor trust to support targeted hiring • Aligning labor & contractors to use union resources • Preparing a new set of contractors • Contractors in insulation, heating, renovation • MBEs who have faced high barriers • Clearing the path for on-bill recovery • Answering utility and mortgage lender objections • Explaining and demystifying… • Shoring up everyone’s resources

6. Critical building blocks • Universal standards for worker/contractor certification already in place • State agency with programming standards, including some M&V • Bulk data from prior years’ energy efficiency retrofits • Utility rates high enough to provide good returns on retrofits(although lower-cost states are also making it work!) • Retrofit programming system built around high quality implementer • RGGI funds • Green Jobs/Green NY legislation • (On-Bill Recovery legislation)

7. Where does this lead? • Catalyzing other policy efforts and funding streams • GJGNY + Home Star? = faster ramp-up, deeper retrofits, bigger energy savings • GJGNY + WAP? = retrofits of housing in deep disrepair, shorter wait-list • GJGNY + federal climate legislation…? • Finishing retrofits of New York’s housing stock • 1m units in 5 years… all 7.6m units within 17 years. • Carbon savings equivalent = 4.7m cars • Spin off complementary green industries • Propagating the model to other states…

8. Struggles • Contracting standards & equity concerns • Need resources of labor • Need standards to protect existing high-quality industry • Key contractors organizing against any regulation • Not enough/too much faith in community-based organizations • Hedging bets, program pits CBOs against housing rehab/WAP groups • Open-ended RFP leaves CBOs to invent the program • On-Bill Recovery: should be so simple. • Legislative delays are threatening contractors and CBOs alike • Letting go of the market-only approach • Planning for equity in job distribution is polarizing • Contractors are not unified on policy directions • Want supports • Don’t want program regulations

9. On-Bill Recovery • State action! • State creates a Retrofit Fund & Loan Loss Reserve, legislates utility role and basic terms of the loans • Utility bill provides security for lenders • Low rate of default and write-offs among OBR-eligible customers • Possibility of power shut-off backs payment • Revenue from retrofit is sent directly back to Retrofit Fund • Utility bill provides safer borrowing for vulnerable households • No one puts their home up as collateral • Missed/late payments aren't catastrophic • Penalty for default (shut-off of service) is reversible • Homeowners don't have to budget in order to repay

10. On-Bill Recovery (cont.) • Obligation to repay stays with the meter (and the retrofit) • “Enforcement Mortgage” (or maybe UCC1 filing) is assumable by a new owner, so even homeowners who may move can do retrofits • Projects can be scoped for cost-effectiveness within longer time period (15 years in NY legislation) • Utility focus supports community organizing around retrofits • On-Bill Recovery allows massive engagement by community groups • On-line tools like “EarthAid” can support post-retrofit engagement • Etc...

11. OBR and... Utilities • We don't want to be a bank. • We don't want to collect the debts of some state agency. • We don't want to shut off customers' power for a debt that's not ours. • You can't accurately predict savings from retrofits. • This will increase our uncollectible bills (and therefore increase all customers' bills.) • When there's a new buyer of a retrofitted home, we'll have to sue/deny service/do expensive collections to get them to start paying. • We don't want to be the bad guy. • This will cost a lot in collections. • This will require millions of dollars in software upgrades. Reminder: there are answers and solutions to this list of concerns at www.cwfny.org!

12. OBR and... Mortgage Lenders • OBR financing may be an impediment to sale of a home • Is the benefit obvious? • Will the benefit “stick” when there's a new occupant? • Will the On-Bill Loan impinge on repair/renovation loans later? • Prospective buyers may find the OBR obligation onerous • How clear is notice? • How hard will the obligation be to assume? • Can the obligation be satisfied at sale? • At foreclosure, OBR may become a burden on the lender • Will the bank be on the hook for benefits it's not using? • Does the repayment obligation survive? • What happens when a home is “dormant?” ...and solutions to these, too, at www.cwfny.org!

13. NY On-Bill Recovery as a model? • What's the alternative? • NYSERDA “Tier 2 loans” use OBR's alternative credit tests, but may not be safe for vulnerable borrowers... • Small credit unions issuing subordinate mortgages on a local scale,but use homes as collateral • PACE! But not for a while, and not for folks with lower incomes or lower home values • On-Bill solution documents at www.cwfny.org • Critical elements of On-Bill Recovery policy and legislation • Green Jobs-Green NY “Enforcement Mortgage” language • Talking points to solve real utility concerns and debunk spurious ones... • Model legislation (near future!)

14. Emmaia Gelman Center for Working Families emmaia@cwfny.org // (917) 517-3627