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C-PACE PROGRAM GUIDELINES

Version 1

Released November 16, 2012

Clean Energy Finance and Investment Authority

865 Brook Street

Rocky Hill, CT 06067

Tel: (860) 563-0015

www.ctcleanenergy.com

http://www.ctcleanenergy.com/

Contents Section 1: Overview ...................................................................................................................................... 1

Section 2: About the C-PACE Program .......................................................................................................... 2

Section 3: Program Process Flow .................................................................................................................. 3

Section 4: Eligible Properties and Financial Standards ................................................................................. 5

Section 5: Technical Standards ..................................................................................................................... 7

I - Overview ............................................................................................................................................... 7

II – Candidate Project Evaluation and Review Process ........................................................................... 10

Full Assessment ................................................................................................................................... 10

FAST TRACK Review ............................................................................................................................ 11

III - Audit Requirements .......................................................................................................................... 12

ASHRAE Level I Energy Audit ............................................................................................................... 12

ASHRAE Level II Energy Audit .............................................................................................................. 13

ASHRAE Level III Energy Audit ............................................................................................................. 13

ASTM BEPA .......................................................................................................................................... 13

IV – Eligible / Ineligible Measures ........................................................................................................... 14

Common Eligible Energy Conservation Measures .............................................................................. 14

Renewable Energy Technologies for Commercial Property (PA 11-80).............................................. 17

Ineligible Measures ............................................................................................................................. 17

V - Performance Measurement & Verification of Energy Savings .......................................................... 18

VI - Energy Savings Insurance ................................................................................................................. 20

Project scenarios where it is unlikely that ESI would be applicable: .................................................. 20

Project scenarios where CEFIA may determine that ESI could be applicable: ................................... 21

VII - Qualifications for Participating ESCOs, Auditors and Contractors .................................................. 21

Qualified Auditor ................................................................................................................................. 22

Qualified Energy Service Company ..................................................................................................... 22

CEFIA Contractor Pre-qualification ..................................................................................................... 22

VIII: Data Management, Program Information Management, Reporting and Analytics ........................ 22

Section 6: About the Clean Energy Finance and Investment Authority ..................................................... 24

Exhibit A – C-PACE Legislation .................................................................................................................... 25

Exhibit B – CEFIA and Municipality Agreement .......................................................................................... 30

Section 1 - Definitions. ............................................................................................................................ 31

Section 2 - Obligations of the Authority. ................................................................................................ 31

Section 3 - Obligations of the Municipality. ............................................................................................ 34

Section 4 - Indemnification. .................................................................................................................... 37

Section 5 - Term. ..................................................................................................................................... 37

Section 6 -Default.................................................................................................................................... 37

Section 7 - Miscellaneous Provisions. ..................................................................................................... 37

Exhibit C – Initial Application for C-PACE .................................................................................................... 41

Section 1: Building Information .............................................................................................................. 41

Section 2: Proposed Project Details ........................................................................................................ 42

Exhibit D – C-PACE Qualified Capital Providers ........................................................................................... 43

Clean Energy Finance and Investment Authority C-PACE Program Guidelines Page 1

Section 1: Overview

In 2012, Connecticut passed legislation that gives property owners access to a new form of financing for building energy upgrades (Attached as Exhibit A). Property Assessed Clean Energy (PACE), is an innovative financing program that will allow Connecticut building owners to access cleaner, cheaper, and more reliable energy.

The Clean Energy Finance and Investment Authority (CEFIA), Connecticut’s “green bank,” was empowered by legislation to administer the program. Focused initially on Commercial and Industrial buildings, C-PACE is launching now in Connecticut, ahead of plans to eventually launch a program for residential building owners.

Commercial Property Assessed Clean Energy (C-PACE) is a financial policy that allows commercial property owners to finance qualifying energy efficiency and clean energy improvements on their properties through an additional assessment on the property tax bill. Interested commercial property owners opt‐in to receive long term (up to 20 years), low interest financing for these improvements, which is repaid through an assessment on their property taxes. This arrangement spreads the cost of clean energy improvements – such as energy efficient boilers, upgraded insulation, new windows, solar installations, or lighting upgrades – over the expected life of the measure. It also helps mitigate the issue of split incentives, since landlords are able to pass both the benefits and the assessments directly to their tenants, enabling both the improvement of the property and increased energy efficiency.

The repayment is secured through a voluntary assessment placed on the property tax bill, which assumes a first lien priority. The repayment obligation automatically transfers to the next property owner if the property is sold. The property owner pays the tax, the tax district peels off the PACE Benefit Assessment and remits principal and interest payments to the PACE investor. Since assessments are repaid through the property tax bill, a secure payment stream, PACE projects are seen as less risky than typical loans, and therefore can benefit from low interest rates from the private sector, with no government financing required.

C-PACE builds on a long history of benefit assessments that a government can levy on real estate parcels to pay for installation of projects that serve a public purpose, such as sewers and sidewalks. C-PACE serves a public purpose by reducing energy costs, stimulating the economy, improving property valuation, reducing greenhouse gas emissions and creating jobs.

C-PACE is a proven and effective tool to attract private capital into the clean energy and energy efficiency market. It is initially available to Commercial and Industrial properties, as well as to multifamily properties with five or more units.

The following pages outline the Program Guidelines that will govern all program participants.


Section 2: About the C-PACE Program

Property Assessed Clean Energy (PACE) is a tax-lien financing program that allows interested property owners to finance qualifying energy efficiency and clean energy improvements on their properties via an assessment on their property tax. Similar to a sewer tax assessment, capital provided under the C-PACE program is secured by a lien on the owner’s property. The repayment is secured through a voluntary benefit assessment placed on the property tax bill, which assumes a first lien priority on the mortgage, and the repayment obligation automatically transfers to the next property owner if the property is sold. This arrangement spreads the cost of clean energy improvements – such as energy efficient boilers, upgraded insulation, new windows, or solar installations – over the expected life of the measure.

Since assessments are repaid through the property tax bill, a secure payment stream, PACE projects are seen as less risky than typical loans, and so can benefit from low interest rates from the private sector, with no government financing required. While the lien is senior to a mortgage, it is non-accelerated. In the event of default, only the payments in arrears would come due. C-PACE benefits mortgage holders because it increases Net Operating Income and appreciates the property value.

Connecticut’s C-PACE program offers financing to commercial, industrial, and multi-family (residential properties with five or more units) property owners. Non-profit or government owned buildings may be eligible in certain cases. The program is administered by CEFIA. Municipalities interested in extending this type of financing to their property owners must opt-in to the statewide program by passing a resolution and entering into a Legal Agreement with CEFIA (Attached as Exhibit B). Upgrades eligible for financing include upgrades that will lower the energy consumption of the building (energy efficiency measures such as boiler envelope upgrades) or enable the building to produce clean energy (such as solar panels). While there is no financing minimum, PACE financing is best suited for capital improvements above $150,000, due to transaction costs.


Section 3: Program Process Flow There are several steps along the process for a property owner to access this attractive financing for building upgrades. Figure 1 in Section 5, Technical Standards, outlines the process CEFIA has outlined for project approval. The individual steps are detailed out below.

1) An interested property owner submits an initial application on the C-PACE website. (NOTE: website in development and expected to launch in January 2013. Until launch, see Exhibit C for the initial application questions which can be submitted to [email protected])

a. CEFIA plans to develop pre-qualified, pre-approved list of C-PACE contractors (energy auditors, energy service companies and installation contractors). With the goal of having this list developed by mid-2013, CEFIA will issue a Request for Qualifications and develop a process to evaluate firms that respond. In view of the work involved to develop such a program and the fact that the C-PACE program is still in its infancy, CEFIA at this time will evaluate qualifications on a case-by-case basis.

b. The consent of the existing mortgage lender on a property is required for C-PACE approval. A sample request for lender consent is available upon request at [email protected]. CEFIA is happy to provide assistance to building owners with contacting their mortgage holders to secure lender consent for C-PACE financing.

2) CEFIA’s Third Party Administrator, Buonicore Partners, LLC, reviews initial application and invites a full application from qualified applicants within two business days.

3) When invited, property owner prepares final application. This application will include: a. conducting an energy audit (if applicable) and identifying desired building

improvements; b. securing the consent of the mortgage holder for this type of financing (if applicable); c. presenting building and project lending economics with an identified capital source. (see

Step 4 for capital sourcing options)

4) If the building owner would like their C-PACE deal referred out to CEFIA’s qualified capital providers, CEFIA will send the specifics of the deal to its pre-approved C-PACE lenders (list of qualified capital providers attached as Exhibit D) and allow the building owner to select project lender based on loan terms. NOTE: building owners are free to select their own capital providers and not utilize CEFIA’s qualified capital providers.

5) CEFIA receives and, based on financial and technical standards detailed in following sections,

approves application and issues final program forms.

6) Property owner receives and signs final program forms.

mailto:[email protected]




7) Upon receipt of the signed forms, CEFIA will provide written notice to the tax collector in the relevant municipality of the estimated benefit assessment to the Municipality. At this time, a caveat will be placed on the land records of the property.

8) The property owner will receive final approval from CEFIA and proceed to implement project.

9) CEFIA, the property owner, and the lender will sign a Services Agreement, which will establish CEFIA’s role as a repayment conduit in the C-PACE structure.

10) Upon completion of the project, or at a pre-determined milestone, property owner will provide CEFIA with project verification documents and request funding disbursement.

11) CEFIA will verify project completion, alert the tax collector to place the final benefit assessment on the property, and alert the project lender to release funds.

12) Property owner will receive the payment and pay the contractor.

[note: because the property owner will be entering into a legal agreement with the lender, Steps 10-12 may vary depending upon that negotiated agreement. For example, funds may be dispersed prior to the completion of the project.]

13) Over the course of the agreed-upon financing term, Property owner will pay back financing

through their property tax bill.

14) Municipality will remit the PACE piece of the property tax to the lender, via CEFIA.

15) Measurement & Verification (M&V) is ongoing through the life of the measures, as needed, as determined during the approval process.


Section 4: Eligible Properties and Financial Standards

In order to be eligible for C-PACE financing, a property owner must meet the following requirements:

• The property is located within the boundaries of a municipality that has adopted a resolution supporting the C-PACE.

• The applicant is the legal owner of the property, and all the legal owners of such property agree to participate.

• The property must be a non-residential property. Residential properties containing five dwelling units or more are eligible.

• The property pays property tax. In some cases, building owners who do not pay property taxes may qualify.1

• The property owner must provide evidence that the mortgage holder (or holders) on the property consents to the C-PACE assessment.

• The property must be current on property tax and assessment payments.

• The property owner must not have any involuntary liens, defaults, or judgments applicable to the subject property. A property owner may be able to participate if it can demonstrate an acceptable reason for the lien, default, or judgment and provide supporting documentation.

• The project’s Savings to Investment Ratio must be greater than one, meaning that projected annual savings exceed annual debt service by some amount.

• The assessment for the project may not result in a total Loan to Value of greater than one.

• The measures proposed in the project must be permanently affixed to the property (i.e. the property owner cannot take them in the event of a change of ownership). Examples of permanently affixed improvements include, but are not limited to upgraded insulation, energy efficient heating equipment, solar photovoltaic (PV) rooftop systems, fuel cells, and natural gas piping installed underneath the property owner’s land.

1 Certain non-profits may already have a tax identification number, or a municipality may decide to issue them a tax identification number. In such a case, the entity would be eligible for C-PACE.


The goal of C-PACE is to ensure that the property owner improves their financial position through energy savings, while making their properties more efficient and robust. To this end, the application process will confirm that the project meets the following criteria:

• Investment to Savings ratio of greater than one

• Internal rate of return (IRR) consistent with property owner’s financial goals

CEFIA’s C-PACE program requires the property owner to receive consent of the mortgage holder. PACE financing offers an attractive option for current mortgage holders because the improvements not only free up cash flow from the property (less money spent on energy), but also makes the property more attractive to current and potential tenants and future buyers. Additionally, C-PACE is structured to be non-accelerating, so that in the event of default, only the obligations in arrears, a relatively small proportion of the total financed amount, are due.


Section 5: Technical Standards

I. Overview II. Project Evaluation and Review Process III. Audit Requirements IV. Eligible / Ineligible Measures V. Performance Measurement & Verification of Energy Savings VI. Energy Savings Insurance VII. Qualifications for Participating ESCOs, Auditors and Contractors VIII. Data Management, Program Information Management, Reporting and Analytics

I - Overview The methodology in these technical standards is designed to provide a flexible framework within which to qualify and manage the myriad eligible energy improvement projects applying for C-PACE financing. It is also designed to ensure that projects financed through the C-PACE program perform as predicted. See Figure 1 for a C-PACE project routing overview.

Energy improvements are defined in the C-PACE statute as “any renovation or retrofitting of qualifying commercial real property to reduce energy consumption or installation of a renewable energy system to service qualifying commercial property, provided such renovation, retrofit or installation is permanently fixed to such qualifying property.” A qualifying commercial real property includes any commercial (including multifamily with five or more units) or industrial property, regardless of ownership.

Projects can range from installation of a single energy conservation measure (ECM), such as a new high efficiency boiler or a renewable energy system, to a whole building energy upgrade involving multiple, interactive ECMs.

These proposed standards envision a two track application review to be conducted by CEFIA or its designated representative. A FAST TRACK review, explained in Section II, will likely be chosen for:

• less technically complex projects that may involve, for example, only one or two targeted ECMs (such as replacement of an old inefficient furnace past its useful life with a new high efficiency furnace); or,

• projects where a recent comprehensive energy audit has already been conducted by a qualified professional; or,

• Connecticut Energy Efficiency Fund (CEEF) approved projects.

A more comprehensive review will be required for all other project submittals (refer to Section II).


In all cases, information obtained from the responsible parties including the application, application review, project implementation, and energy savings measurement and verification (M&V) will be entered into a web-based CEFIA Data Management Platform (CDMP). The CDMP platform will facilitate uploading of key project data from responsible parties via excel spreadsheets and appending supporting documents in PDF file format. This data will also support the technical and financial underwriting process required to meet the reporting requirements of the multiple interdependent stakeholders, including but not limited to CEFIA management, lenders, building owners/managers and/or insurers (refer to Section VIII).

The technical methodology incorporated into the review process relies upon three established industry protocols:

1. ASTM E2797-11, Building Energy Performance Assessment (BEPA) Standard directed at data collection and baseline calculations for the energy audit;

2. ASHRAE Level I, Level II and Level III Energy Audit Guidelines; and 3. International Performance Measurement and Verification Protocol (IPMVP).


II – Candidate Project Evaluation and Review Process Candidate project proposals submitted to CEFIA will be classified into one of the following four categories:

1) project proposals based upon the results from a recent (less than 3 years old) ASHRAE Level II or Level III (or equivalent) energy audit;

2) project proposals focused on replacement/upgrading of a specific building energy-using component (“targeted ECM”);

3) CEEF-approved projects seeking C-PACE financing; 4) project proposals without a specific plan, but with a goal to improve the building’s energy

efficiency and take advantage of C-PACE financing.

Project proposals in categories (1) through (3) will likely be eligible for CEFIA’s FAST TRACK review process. Project proposals in category (4) are required to undergo a full assessment. Final approval on the candidate’s project review path is the responsibility of CEFIA or a program administrator working at the direction of CEFIA.

Full Assessment Projects undergoing comprehensive review (refer to Figure 1) will begin with a screening step conducted by CEFIA to cost effectively eliminate projects where potential energy savings are not acceptable. This determination will be based on the applicant’s submittal of building energy use and cost data collected according to the ASTM E 2797-11 (“ASTM BEPA”) standard protocol in conjunction with an ASHRAE Level I audit. CEFIA, using its CDMP, will assess how the building’s current energy use intensity (kBtu/ft2) and energy cost ($/ft2) compares with relevant peer buildings (“benchmarking”). If the results determine the project savings do not meet CEFIA’s minimum requirements, it will be rejected.

If benchmarking indicates there is potential to achieve an acceptable level of energy savings, CEFIA will advise the applicant to conduct an ASHRAE Level II or Level III energy audit or equivalent (refer to Section III). The audit, conducted by a CEFIA-approved energy auditor, will identify and recommend ECMs, determine project cost and expected energy savings, and evaluate key financial metrics. It is expected that most energy audits will be ASHRAE Level II. However, the final decision on audit level (ASHRAE Level II or Level III or equivalent) rests with CEFIA. In making this determination, CEFIA may consider a number of factors, including but not limited to, a project’s anticipated total capital investment and/or financing and insurance partner requirements.

Assuming the ECMs are eligible under the C-PACE program (refer to Section IV) and the energy savings and financial metrics meet CEFIA’s minimum requirements, the project will be deemed qualified.


Qualified projects then proceed to securing C-PACE financing. Depending upon the nature of the project and stakeholder requirements, CEFIA will assess whether energy savings insurance, if available, is appropriate for the project (refer to Section VI).

Once financing is in place, a CEFIA-approved energy contractor or energy service company (refer to Section VII) is retained by the applicant to execute the project. Once the ECMs are installed, the contractor will also measure and verify the energy savings (refer to Section V).

All key project data is entered in the CEFIA Data Management Platform (CDMP) by those responsible for the various tasks (refer to Section VIII). At the minimum, this platform will contain information collected from the applicant’s submittal, the project development and review process, project installation and energy savings M&V. The platform will also facilitate reporting to stakeholders, including, but not limited to, CEFIA management, lenders, building owners/managers and/or insurers.

FAST TRACK Review If an ASHRAE Level II or Level III energy audit (or equivalent) was conducted within the previous three (3) years and specific recommendations were provided on ECMs, including a projection of energy savings, or if a targeted inefficient energy-using system is being replaced (for example, an old unit that is past its useful life or if the facility is proposing to install a renewable energy system), or if the project already has been approved by CEEF, then CEFIA may employ the FAST TRACK review process.

The FAST TRACK process reduces the level of “soft costs” incurred by the applicant and accelerates the review process to reach C-PACE financing. The process differs from the full assessment process in two ways (refer to Figure 1). First, the screening step is replaced with a step designed to confirm the applicant’s proposal. Second, there is no need for a comprehensive energy audit. Assuming the applicant’s proposal is confirmed, the remaining steps are the same as in a full assessment.

The applicant must have their proposal reviewed and confirmed by a CEFIA-approved third party energy auditor. The energy auditor is to collect energy use data as appropriate following the ASTM BEPA standard and conduct a targeted ASHRAE Level I assessment to confirm that the proposed energy efficiency project is currently valid. For example, in the case of a targeted ECM, the auditor should at the minimum inspect the existing unit that is being replaced; confirm the projected energy savings achievable with the proposed new, high efficiency unit; confirm project cost; and evaluate key financial metrics. The energy auditor will enter pertinent data in the CDMP. CEFIA, or a third party contracted by CEFIA, would review the project and make a determination on whether or not the project is qualified for C-PACE funding.


III - Audit Requirements As a condition of financing, C-PACE legislation requires performance of an energy audit or renewable energy feasibility analysis that assesses the expected energy cost savings of the energy improvements over their useful life. CEFIA, in consultation with the applicant, and after the submission of the initial application on-line, will determine the minimum required energy audit scope of work (ASHRAE Level I, Level II or Level III) consistent with the C-PACE program technical standards. Regardless of the audit level, energy use data collection and analysis should be in substantial compliance with the ASTM E2797-11 standard. The principal objectives of the energy audit are to:

• identify and recommend, in collaboration with the property owner/manager, C-PACE-eligible ECMs (see Section IV);

• estimate the useful life of each ECM;

• assess total project capital cost;

• determine the energy savings that can confidently be achieved (energy savings should be determined by the difference between projected energy use after the ECMs are installed and the projected baseline energy use under similar conditions); and

• determine the project’s key financial metrics, including ROI, IRR, NPV and payback time based on the anticipated term of the C-PACE loan (the financial analysis performed should reflect any rebates or incentives offered by utilities operating in the State of Connecticut).

In estimating the total project cost eligible for C-PACE funding (from upfront energy audits or renewable energy feasibility studies, to the design and installation of the energy improvements, to verification of the energy savings achieved), the energy auditor may also include the cost of a maintenance contract for the energy improvements, up to but not exceeding a five (5) year contract.

Completed energy audit data is to be populated in CEFIA’s Data Management Platform (CDMP) to enable CEFIA to validate that the scope of work met the required technical standards, ECMs met C-PACE program eligibility requirements, the recommended ECMs were technically and financially feasible, and all stakeholder underwriting data needs were satisfied.

ASHRAE Level I Energy Audit An ASHRAE Level I energy audit consists of 1) a walk-through analysis to assess a building’s energy cost, 2) a utility bill analysis to assess its efficiency (using ASTM BEPA Methodology to establish the building’s baseline energy use), and 3) conducting a brief on-site survey of the building. The walk-through may be targeted at a specific building component that is intended to be replaced or upgraded or added (such as in the case of installing a solar energy system) or may include checking all major energy-using systems. Operational metrics of building equipment are typically limited to data collection of nameplates, but may be more detailed if that data are readily available. Level I energy analysis should at the minimum identify ECMs and the associated potential energy savings, the estimated cost of the ECMs, and specify where further consideration and more rigorous investigation is warranted.


ASHRAE Level II Energy Audit An ASHRAE Level II energy audit is a more detailed investigation and includes a more comprehensive building survey and energy analysis than a Level I audit. It also includes more detailed financial analysis. In addition to nameplate data collection, empirical data may also be acquired through various field measurements using handheld devices. The Level II audit should at the minimum identify and provide the investment and cost savings analysis of all recommended ECMs that meet CEFIA’s and the owner’s constraints and economic criteria, along with a discussion of any changes to operation and maintenance procedures. Detailed financial analysis includes ROI, IRR, NPV and payback period determination reflecting C-PACE financing. Sufficient detail on projected energy savings is provided to justify project implementation.

ASHRAE Level III Energy Audit The ASHRAE Level III energy audit (often referred to as an “investment grade audit”) is generally applicable to projects that are very capital intensive and demand more detailed field data gathering as well as more rigorous engineering analysis. The Level III energy audit provides even more comprehensive project investment and cost savings calculations to bring a higher level of confidence that may be required for major capital investment decisions. Data collection may involve field measurements acquired through data loggers and/or an existing energy management system.

ASTM BEPA The ASTM Building Energy Performance Assessment (BEPA) protocol established a standardized methodology for building energy use data collection, compilation and analysis. The methodology is intended to fill data collection and analysis gaps in the ASHRAE energy audit guidelines and establish a sound building energy use baseline. The ASTM BEPA methodology standardized a number of major variables associated with data collection and analysis. This overarching methodology dictates the data and history that should be collected at each site.

CEFIA has the ultimate responsibility and sole discretion to approve the appropriate level of energy audit for a particular project, depending upon the nature of the proposed project and supporting information. CEFIA will make the determination after the initial screening process is complete.


IV – Eligible / Ineligible Measures

Common Eligible Energy Conservation Measures Pursuant to C-PACE legislation, eligible measures must at the minimum achieve an energy savings (over the useful life of the energy improvements) to [total project] investment ratio greater than one and be permanently affixed to the property. In addition to the ECM eligibility review, CEFIA will also review projected improvements in energy efficiency to ensure that the uppermost practically achievable and commercially acceptable improvement is attained.

The following list of predominant, long-standing, proven energy efficiency technologies is intended as a reference list for C-PACE applicants. If not included on this list, CEFIA will review proposed ECM(s) and accept them on a case-by-case basis.

• High efficiency lighting

• Heating ventilation air conditioning (HVAC) upgrades

• New automated building and HVAC controls

• Variable speed drives (VSDs) on motors fans and pumps

• High efficiency chillers

• High efficiency boilers and furnaces

• High efficiency hot water heating systems

• Combustion and burner upgrades

• Fuel switching

• Water conservation measures to the extent

• they save energy

• Heat recovery and steam traps

• Building enclosure/envelope improvements

• Building automation (energy management) systems

• Renewable energy systems

The following end use savings technologies are generally more applicable to industrial facilities:

• New automated process controls

• Heat recovery from process air and water

• Cogeneration used for peak shaving

• Process equipment upgrades

• Process changes

Shown below are key aspects of some of the most commonly applied technologies listed above, with their typical simple payback range. These payback periods are only provided for informational purposes and should not be construed as a requirement for C-PACE funding eligibility.


Lighting (2 to 3 year simple payback):

• Daylight controls and natural day lighting designed to reduce energy and improve visual comfort • Upgrades for existing fluorescent fixtures including electronic ballasts, T8 lamps, and reflectors • Meeting rooms and other intermittently occupied spaces can garner significant energy savings

with the use of timers and occupancy sensors • Smaller impact opportunities including security lighting, stairwell lighting, exterior night-time

security lighting and exit signs. Motors (3 to 5 year simple payback):

• High efficiency electric motor replacements usually pay back when a motor is running for long periods at high load, or at the end of motor life

• The cost premium over standard motors normally can be recovered in less than 2 years • Motor sizing to the actual load profile to improve efficiency and control electrical power factor.

Variable Speed Drives (3 to 5 year simple payback):

• Applied to motors, pumps and fans • Matches motor use to variable operating load • Can save up to 40 percent in power consumption • Can be packaged with controls • Extends motor life.

HVAC (2 to 8 year simple payback)

• New packaged units can increase efficiency and indoor comfort • Proper sizing of HVAC equipment is a major opportunity, since full-load operation is more

efficient than part load operation - consider fan capacity reduction or staging of 2 smaller units rather than partial loading of one large unit

• Install VSDs on HVAC motors • Balance air and water supply systems to remove trouble spots demanding inefficient system

operation • Improve maintenance • Eliminate simultaneous heating and cooling • Install economizers and direct digital controls • Variable air volume conversions versus constant air flow • Ventilation reduction • Unoccupied shutdown or temperature setback/setup (controls).


Chillers (5 to 10 year simple payback):

• New chiller models can be up to 30-40 percent more efficient than existing equipment. • Upgrade lead chiller(s) (base load) to high efficiency • Manage chiller and condenser settings to minimize compressor energy • Optimize pumping energy for distribution of chilled water • Optimize HVAC operation to:

o Improve temperature/humidity control o Eliminate unnecessary cooling loads

• CFC reclamation program/inventory - chiller replacement may achieve both CFC management and energy efficiency objectives.

Boilers (1 to 5 year simple payback):

• Replace steam with hot water boilers for hot water heating loads • Improve maintenance • Optimize operation/staging in multiple boiler plants • Optimize boiler controls • Tune or replace burners • Add small “pony” boilers for low loads:

o Reduced fuel consumption/energy costs o Reduced emissions o Reduced maintenance costs o Higher reliability.

Heat Recovery (2 to 4 year simple payback):

• Heat recovery devices to capture waste heat from water, process heat and exhaust air to re-use it for preheating:

o Building intake air o Boiler combustion air o Boiler feed-water o Inlet water for domestic hot water.

New Automated Building and HVAC Controls (3 to 5 year simple payback):

• Old controls may still be pneumatic systems based on compressed air - new electronic controls are more precise and reliable, with greater capabilities.

• Can automate lighting, chiller, boiler and HVAC operation: o Load shedding o Optimal start/stop/warm up o Ventilation control.

• Whole-building energy management systems may come with other advanced control technologies:

o Security, fire and life safety o Alarm monitoring and report generation o Preventive maintenance scheduling

• Remote monitoring/metering capabilities may be attractive.


Building Shell and Fenestration (3 to 10 year simple payback):

• Roof insulation, combined with reflective roof coatings in warm climates, reduces energy consumption

• Review building pressurization for proper ventilation: o Balance exhaust and intake air quantities o Add weather-stripping on doors and windows o Seal cracks and unnecessary openings

• Window films to reduce solar heat gain and/or heat loss • Replace windows with more energy efficient glazing.

Renewable Energy Technologies for Commercial Property (PA 11-80) The following are the described Class I and Class II renewable technologies per Public Act 11-80. Class I renewable energy sources applicable to commercial and industrial property upgrades - energy derived from:

• Solar power • Wind Power • Geothermal Power • Fuel Cell • Methane Gas from landfills • Low emission advanced renewable energy conversion technologies • A run-of-the river hydropower facility with operation after 7/1/2003* • Sustainable Biomass Facility*.

Class II renewable energy sources applicable to commercial and industrial property upgrades - energy derived from:

• Trash-to-Energy facility • Biomass Facility with operation before 7/1/98* • A run-of-the river hydropower facility with operation prior to 7/1/2003*.

*See PA-11-80 for additional details

Ineligible Measures All C-PACE related improvements must be permanently affixed to the commercial property and part of a retrofit to existing infrastructure. The following items will not be considered as efficiency measures under the C-PACE program:

• Appliances, e.g., refrigerators, dishwashers, etc.

• Plug load devices

• Vending machine controls

• Any package of measures with a weighted average effective useful life (EUL) that does not meet or exceed the life of the loan


• Any package of measures that does not achieve an energy savings (over the life of the loan) to total project investment ratio of greater than one

• Any measure that is easily removed or not permanently installed

• Any measure that does not result in improved water or energy efficiency or renewable energy generation

• Extending natural gas lines to the property line to enable a PACE-eligible gas conversion project.

V - Performance Measurement & Verification of Energy Savings

The purpose of performance measurement and verification (M&V) is to ensure that baseline and normalized energy use and cost performance is calculated in a technically sound, consistent and transparent manner, which in turn is used to determine energy savings. To accomplish this goal, CEFIA requires all C-PACE applicants to incorporate in their projects an M&V plan directed at project commissioning, and be responsible for its execution. Further, depending upon stakeholder reporting requirements (including CEFIA, the building owner/manager, lender and/or insurer), recurring M&V may also need to be performed.

To accomplish this goal, CEFIA may require C-PACE applicants to base their M&V plan on the International Performance Measurement and Verification Protocol (IPMVP). The IPMVP’s fundamental concept stems from the fact that energy savings cannot be measured directly. Savings in this context are the absence of energy use (or “avoided energy use”) that would have occurred without the ECMs installed.

The IPMVP provides four options for determining energy savings. These include:

Option A. Retrofit Isolation: Key Parameter Measurement

Option B. Retrofit Isolation: All Parameter Measurement

Option C. Whole Facility

Option D. Calibrated Simulation.

Options A and B focus on the performance of specific ECMs that can be measured in isolation from the rest of the building. In Option A, the key energy use parameter is measured, but other minor effects can be estimated. For example, Option A might include a lighting retrofit, where an electric meter can isolate and measure electricity use for the lighting, but where the relatively minor interactive effect of less cooling in summer and more heating in winter is estimated. Reduced lighting loads will reduce air conditioning energy consumption (a cooling bonus), but increase heating consumption (a heating penalty). In Option B, all parameters necessary to evaluate energy use are measured. This might, for example, be the case with installation of a variable speed drive and controls to a motor, with a power meter installed on the electrical supply to the motor.


Options C and D are used when energy use of the ECMs installed is not easily measured in isolation from the rest of building operations, or there is little measured baseline energy data, among other reasons. The Option C approach assesses savings at the whole facility level. The measured and verified energy savings in the desired reporting period (e.g., 12 months after the ECMs have been installed) is determined from the difference between the actual (measured) energy use in the reporting period and the projected energy use in this same reporting period assuming the ECMs had not been installed. The analysis reflects changes in the independent variables impacting building energy use (such as weather, occupancy, operating hours, etc.) for each month in reporting period as compared to the baseline. Option C is commonly applied for whole building retrofits involving multiple ECMs that may be interactive. Option D uses computer simulations and building modeling (e.g., U.S. DOE 2.2- based software), and is usually applied when baseline year energy data are not available or considered reliable.

While it is expected that contractors will rely substantially on IPMVP Options A, B, C or D for M&V, CEFIA may approve exceptions depending on the specific nature and size of the project. For example, in cases where a targeted ECM is being installed (such as sole replacement of an existing inefficient unit that is past its useful life with a new high efficiency unit), CEFIA may also approve M&V using a methodology based on calculations and supported, as appropriate, with field measurements, to verify the energy savings.

For all C-PACE funded projects, contractors are to prepare an energy savings M&V plan that at the minimum provides a description of the required commissioning activities to ensure the ECMs are operating as projected by the manufacturer and as projected in the energy audit.

Within the pre-agreed upon period after ECM installation, the party responsible for project implementation (or any subsequent party approved in advance by CEFIA) is to collect post-project energy use data and other pertinent data in accordance with the M&V plan. The responsible party is required to enter such data into the CDMP. Recurring M&V reporting may be required by project stakeholders (CEFIA, building owner/manager, lender, or insurer). If so, the applicant will submit at the agreed upon frequency (and as also specified in the M&V plan) an energy savings verification report that describes the resultant actual energy savings in the reporting period compared to the projected energy savings.


VI - Energy Savings Insurance

CEFIA has determined that for certain projects energy savings insurance (ESI) may serve as a strategic risk transfer tool that can aid in the underwriting, funding and success of a proposed project. As such, it may provide the following important benefits:

• Underwriting can provide a third party check on projected energy savings;

• Insurance may result in a credit enhancement in the project funding process;

• ESI can provide a building owner or operator with confidence that projected energy savings will be realized.

While ESI may not be appropriate for all projects, CEFIA has developed the following guidance for the C-PACE program.

Project scenarios where it is unlikely that ESI would be applicable:

• For relatively small projects incurring costs of less than $300,000.

Rationale: For such projects, the cost of ESI may represent a relatively significant percentage of total project cost. For example, assume a $300,000 project (including, financing, legal and administrative costs) with projected annual savings of ~$50,000 for 10 years. At today’s prices the premium would likely be on the order of 5% of the projected energy savings, per year for 10 years, or (5% x $50,000/year x 10 years = $500,000) yielding a total premium of approximately $25,000. This would represent almost 10% of the total project cost.

• For projects with a payback period of less than 3 years.

Rationale: CEFIA will have determined that energy savings for such projects will be significant and variations in the final outcome will be minor.

• For projects solely involving fuel switching, i.e., oil to natural gas.

Rationale: CEFIA will have determined from relatively straight forward calculations that at current and projected prices for natural gas, combined with high efficiency newer equipment, backed by a reputable manufacturer’s guarantee, such projects will not require ESI.

• If a single and targeted ECM is being installed, e.g., high efficiency chiller, accompanied by a reputable manufacturer’s performance guarantee.

Rationale: Similar to fuel switching, such projects generally involve technically straight forward calculations that can provide confidence in the projected energy savings.


• If an energy savings performance guarantee is obtained from an investment grade energy services company.

Rationale: Such companies will need to have the financial resources to back their energy savings guarantee.

Project scenarios where CEFIA may determine that ESI could be applicable:

• Where the payback period is greater than 3 years.

• Where the project cost is greater than $300,000.

• For projects involving the installation of multiple energy conservation measures that may have interactive energy use implications, e.g., where the measurement and verification of the projected energy savings will be at the more difficult and complex whole-building level.

• If the project developer (ESCO) lacks sufficient financial resources to provide or back their energy savings performance guarantee.

• If a lender is considering requiring ESI as a condition to fund the project.

• If a lender considers ESI as a credit enhancement that can make the project more financially attractive.

VII - Qualifications for Participating ESCOs, Auditors and Contractors A C-PACE qualified project will typically involve a CEFIA-approved energy auditor, an energy service company (ESCO) that may also conduct the energy audit, and/or an installation contractor. Each must have sufficient knowledge, experience and expertise in assisting property owners with energy efficiency upgrades.

Depending on the scope and complexity of the project, the energy auditor, ESCO and/or installation contractor may be required by CEFIA to demonstrate some or all of the following general qualifications for implementing energy efficiency solutions in their respective area(s) of expertise:

1. Demonstrated experience and working knowledge of energy efficiency auditing using the ASHRAE energy audit guidelines, supported by ASTM BEPA data collection and analysis methodology, for commercial property projects, and familiarity with the processes, statutes, and codes governing the C-PACE program.

2. Have on staff, or access to, at least one licensed Connecticut Professional Engineer and, depending on the services being offered, have access to at least one Certified Energy Manager (CEM) and/or one Certified Measurement & Verification Professional (CMVP).

3. Experience and knowledge of building operational characteristics and energy systems. 4. Have a written quality assurance/quality control program for the products/services offered. 5. Provide at least three (3) references of successfully completed projects demonstrating expertise.


Qualified Auditor A qualified energy auditor will have broad experience with all types of energy efficiency projects, such as lighting, HVAC, building envelope, domestic hot water and energy equipment controls. Individuals responsible for conducting audits will have at least three (3) years of experience performing audits on commercial buildings. The technical expertise and experience of the audit team selected for the project should be evident in the resumes provided to CEFIA. Since energy auditors need to be objective and dedicated to ensure that the recommended ECMs are beneficial and cost effective for clients, the auditor is to identify to CEFIA prior to execution of an audit any financial relationships with equipment vendors or service companies. With respect to the references provided to CEFIA supporting energy audit expertise, information on the type building and client contact information should be included.

Qualified Energy Service Company A qualified energy service company/contractor will have demonstrated experience with energy efficiency projects and provide CEFIA with a representative list of past projects involving building energy efficiency upgrades. The qualified energy service company/contractor must demonstrate the technical expertise and experience of the team selected for the project by providing resumes that include a list of projects worked on. Sufficient information must also be provided to CEFIA to demonstrate the firm’s organizational and financial stability. If an energy savings performance guarantee is being provided and the company does not have sufficient financial resources to support the guarantee, energy savings insurance (or its equivalent) may be used to satisfy this shortcoming.

CEFIA Contractor Pre-qualification CEFIA plans to develop pre-qualified, pre-approved list of C-PACE contractors (energy auditors, energy service companies and installation contractors). With the goal of having this list developed by mid-2013, CEFIA will issue a Request for Qualifications and develop a process to evaluate firms that respond. In view of the work involved to develop such a program and the fact that the C-PACE program is still in its infancy, CEFIA at this time will evaluate qualifications on a case-by-case basis.

VIII: Data Management, Program Information Management, Reporting and Analytics

To ensure the success of the C-PACE program, data needs to be uniformly collected over the full life cycle of a project, from initial building screening, through energy auditing, project development, project implementation and post-implementation energy savings measurement and verification. Projects undergoing both full assessment and FAST TRACK will be tracked in the CDMP.

• Sample data that will be collected in the CDMP includes, but is not limited to:

• Candidate project information


• Performance baseline determination consistent with ASTM BEPA methodology

• Benchmarking results comparing candidate performance to peer buildings

• Key energy audit data consistent with ASHRAE guidelines

• ECM data

• Key financial metrics

• Contractor information

• Project implementation data

• M&V data

• Scheduling information

• CEFIA project approval/denial information.

The CDMP platform will facilitate uploading of key project data (see above) via excel spreadsheets, appending supporting documents, e.g., ECM data sheets, onsite photographs, modeling and data logging results, etc., in PDF file format. The platform will also have report generation and analytics capabilities across the project life cycle to keep CEFIA management informed and to support as necessary the technical and financial underwriting process needed to meet the reporting requirements of the multiple interdependent stakeholders.

To facilitate this critical C-PACE objective, CEFIA will deploy, and require all stakeholders to use the CDMP. Standardizing on the CDMP ensures that all program interdependent stakeholders (CEFIA, building owners/managers, energy service companies, energy auditors, installation contractors, lenders and insurers) maintain cost effective access to the key performance analytics needed to facilitate project success and drive continuous C-PACE program improvement by all participants.


Section 6: About the Clean Energy Finance and Investment Authority

CEFIA was created by the Connecticut General Assembly in 2011. It is the successor organization to the Connecticut Clean Energy Fund. CEFIA’s mission is to promote, develop and invest in clean energy and energy efficiency projects in order to strengthen Connecticut’s economy, protect community health, improve the environment, and promote a secure energy supply for the state. CEFIA is governed by an 11-member board of directors appointed by the governor and the leadership of the State Legislature. As the nation’s first full-scale clean energy finance authority, CEFIA will leverage public and private funds to drive investment and scale up clean energy deployment in Connecticut. For more information on CEFIA, please visit www.ctcleanenergy.com.

Contact Information

Visit our website at www.ctcleanenergy.com/cpace

Jessica Bailey, Director of Commercial and Industrial PACE

[email protected]

(860) 257-2888

http://click.icptrack.com/icp/relay.php?r=24381447&msgid=381677&act=6P30&c=1021274&destination=http%3A%2F%2Fwww.ctcleanenergy.com

http://www.ctcleanenergy.com/cpace



Exhibit A – C-PACE Legislation

2012 SPECIAL SESSION C-PACE

SB 501

COMMERCIAL PROPERTY ASSESSED CLEAN ENERGY (C-PACE)

Sec. 157. (NEW) (Effective from passage) (a) As used in this section:

(1) "Energy improvements" means any renovation or retrofitting of qualifying commercial real property to reduce energy consumption or installation of a renewable energy system to service qualifying commercial real property, provided such renovation, retrofit or installation is permanently fixed to such qualifying commercial real property;

(2) "Qualifying commercial real property" means any commercial or industrial property, regardless of ownership, that meets the qualifications established for the commercial sustainable energy program;

(3) "Commercial or industrial property" means any real property other than a residential dwelling containing less than five dwelling units;

(4) "Benefitted property owner" means an owner of qualifying commercial real property who desires to install energy improvements and provides free and willing consent to the benefit assessment against the qualifying commercial real property;

(5) "Commercial sustainable energy program" means a program that facilitates energy improvements and utilizes the benefit assessments authorized by this section as security for the financing of the energy improvements;

(6) "Municipality" means a municipality, as defined in section 7-369 of the general statutes;

(7) "Benefit assessment" means the assessment authorized by this section;


(8) "Participating municipality" means a municipality that has entered into a written agreement, as approved by its legislative body, with the authority pursuant to which the municipality has agreed to assess, collect, remit and assign, benefit assessments to the authority in return for energy improvements for benefited property owners within such municipality and costs reasonably incurred in performing such duties; and

(9) "Authority" means the Clean Energy Finance and Investment Authority.

(b) (1) The authority shall establish a commercial sustainable energy program in the state, and in furtherance thereof, is authorized to make appropriations for and issue bonds, notes or other obligations for the purpose of financing, (A) energy improvements; (B) related energy audits; (C) renewable energy system feasibility studies; and (D) verification reports of the installation and effectiveness of such improvements. The bonds, notes or other obligations shall be issued in accordance with legislation authorizing the authority to issue bonds, notes or other obligations generally. Such bonds, notes or other obligations may be secured as to both principal and interest by a pledge of revenues to be derived from the commercial sustainable energy program, including revenues from benefit assessments on qualifying commercial real property, as authorized in this section.

(2) When the authority has made appropriations for energy improvements for qualifying commercial real property or other costs of the commercial sustainable energy program, including interest costs and other costs related to the issuance of bonds, notes or other obligations to finance the appropriation, the authority may require the participating municipality in which the qualifying commercial real property is located to levy a benefit assessment against the qualifying commercial real property especially benefited thereby.

(3) The authority (A) shall develop program guidelines governing the terms and conditions under which state financing may be made available to the commercial sustainable energy program, including, in consultation with representatives from the banking industry, municipalities and property owners, developing the parameters for consent by existing mortgage holders and may serve as an aggregating entity for the purpose of securing state or private third-party financing for energy improvements pursuant to this section, (B) shall establish the position of commercial sustainable energy program liaison within the


authority, (C) shall establish a loan loss reserve or other credit enhancement program for qualifying commercial real property, (D) may use the services of one or more private, public or quasi-public third-party administrators to administer, provide support or obtain financing for the commercial sustainable energy program, and (E) shall adopt standards to ensure that the energy cost savings of the energy improvements over the useful life of such improvements exceed the costs of such improvements.

(c) Before establishing a commercial sustainable energy program under this section, the authority shall provide notice to the electric distribution company, as defined in section 16-1 of the general statutes, that services the participating municipality.

(d) If a benefitted property owner requests financing from the authority for energy improvements under this section, the authority shall:

(1) Require performance of an energy audit or renewable energy system feasibility analysis on the qualifying commercial real property that assesses the expected energy cost savings of the energy improvements over the useful life of such improvements before approving such financing;

(2) If financing is approved, require the participating municipality to levy a benefit assessment on the qualifying commercial real property with the property owner in a principal amount sufficient to pay the costs of the energy improvements and any associated costs the authority determines will benefit the qualifying commercial real property;

(3) Impose requirements and criteria to ensure that the proposed energy improvements are consistent with the purpose of the commercial sustainable energy program;

(4) Impose requirements and conditions on the financing to ensure timely repayment, including, but not limited to, procedures for placing a lien on a property as security for the repayment of the benefit assessment; and

(5) Require that the property owner provide written notice, not less than thirty days prior to the recording of any lien securing a benefit assessment for energy improvements for such property, to any existing mortgage holder of such


property, of the property owner's intent to finance such energy improvements pursuant to this section.

(e) (1) The authority may enter into a financing agreement with the property owner of qualifying commercial real property. After such agreement is entered into, and upon notice from the authority, the participating municipality shall place a caveat on the land records indicating that a benefit assessment and lien is anticipated upon completion of energy improvements for such property.

(2) The authority shall disclose to the property owner the costs and risks associated with participating in the commercial sustainable energy program established by this section, including risks related to the failure of the property owner to pay the benefit assessment. The authority shall disclose to the property owner the effective interest rate of the benefit assessment, including fees charged by the authority to administer the program, and the risks associated with variable interest rate financing. The authority shall notify the property owner that such owner may rescind any financing agreement entered into pursuant to this section not later than three business days after such agreement.

(f) The authority shall set a fixed or variable rate of interest for the repayment of the benefit assessment amount at the time the benefit assessment is made. Such interest rate, as may be supplemented with state or federal funding as may become available, shall be sufficient to pay the financing and administrative costs of the commercial sustainable energy program, including delinquencies.

(g) Benefit assessments levied pursuant to this section and the interest, fees and any penalties thereon shall constitute a lien against the qualifying commercial real property on which they are made until they are paid. Such lien shall be levied and collected in the same manner as the property taxes of the participating municipality on real property, including, in the event of default or delinquency, with respect to any penalties, fees and remedies and lien priorities. Each such lien may be continued, recorded and released in the manner provided for property tax liens, subject to the consent of existing mortgage holders, and shall take precedence over all other liens or encumbrances except a lien for taxes of the municipality on real property, which lien for taxes shall have priority over such benefit assessment lien.


(h) Any participating municipality may assign to the authority any and all liens filed by the tax collector, as provided in the written agreement between the participating municipality and the authority. The authority may sell or assign, for consideration, any and all liens received from the participating municipality. The consideration received by the authority shall be negotiated between the authority and the assignee. The assignee or assignees of such liens shall have and possess the same powers and rights at law or in equity as the authority and the participating municipality and its tax collector would have had if the lien had not been assigned with regard to the precedence and priority of such lien, the accrual of interest and the fees and expenses of collection. The assignee shall have the same rights to enforce such liens as any private party holding a lien on real property, including, but not limited to, foreclosure and a suit on the debt. Costs and reasonable attorneys' fees incurred by the assignee as a result of any foreclosure action or other legal proceeding brought pursuant to this section and directly related to the proceeding shall be taxed in any such proceeding against each person having title to any property subject to the proceedings. Such costs and fees may be collected by the assignee at any time after demand for payment has been made by the assignee.


Exhibit B – CEFIA and Municipality Agreement

COMMERCIAL PROPERTY ASSESSED

CLEAN ENERGY (“C-PACE”) AGREEMENT

THIS AGREEMENT is made and entered into as of the ____ day of _________, 2012, by and between ______________, CONNECTICUT, a municipal corporation organized and existing under the laws of the State of Connecticut (the “Municipality”), and the CLEAN ENERGY FINANCE AND INVESTMENT AUTHORITY, a public instrumentality and political subdivision of the State of Connecticut established under Public Act No. 11-80 (and codified in Section 16-245n of the Connecticut General Statutes) (the “Authority”).

RECITALS

WHEREAS, Commercial Property Assessed Clean Energy (C-PACE) is a program to facilitate loan financing for clean energy improvements to commercial properties by utilizing a state or local assessment mechanism to provide security for repayment of the loans.

WHEREAS, Public Act No. 12-2 of the June 12, 2012 Special Session of the Connecticut General Assembly (the “Act”) established a C-PACE program in Connecticut.

WHEREAS, Section 157 of the Act directed the Authority to establish a commercial sustainable energy program, and authorized the Authority to make appropriations for and issue bonds, notes or other obligations to finance the program costs. A commercial sustainable energy program is a program that facilitates energy improvements to commercial or industrial property and utilizes municipal benefit assessments authorized by the Act as security for financing the energy improvements.

WHEREAS, to secure financing for the program, the Authority and the municipality are authorized to enter into a written agreement, as approved by the municipality’s legislative body, pursuant to which the municipality has agreed to assess, collect, remit and assign, benefit assessments to the Authority in return for energy improvements for benefited property owners within the municipality and for costs reasonably incurred by the municipality in performing such duties.

WHEREAS, this Agreement constitutes the written agreement authorized by the Act.

NOW THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein and in order to effectuate the purposes of the Act, it is hereby agreed as follows:


Section 1 - Definitions.

(a) “Energy improvements” means any renovation or retrofitting of qualifying commercial real property to reduce energy consumption or installation of a renewable energy system to service qualifying commercial real property, provided such renovation, retrofit or installation is permanently fixed to such qualifying commercial real property.

(b) “Qualifying commercial real property” means any commercial or industrial property, regardless of ownership, that meets the qualifications established for the commercial sustainable energy program.

(c) “Commercial or industrial property” means any real property other than a residential dwelling containing less than five dwelling units.

(d) “Benefitted property owner” means an owner of qualifying commercial real property who desires to install energy improvements and provides free and willing consent to the benefit assessment against the qualifying commercial real property.

(e) “Commercial sustainable energy program” means a program that facilitates energy improvements and utilizes the benefit assessments authorized by this Agreement as security for the financing of the energy improvements.

(f) “Benefit assessment” means the assessment authorized by the Act.

Section 2 - Obligations of the Authority.

(a) Program Requirements. Pursuant to the Act, the Authority:

(1) shall develop program guidelines governing the terms and conditions under which state financing may be made available to the commercial sustainable energy program, including, in consultation with representatives from the banking industry, municipalities and property owners, developing the parameters for consent by existing mortgage holders and may serve as an aggregating entity for the purpose of securing state or private third-party financing for energy improvements pursuant to the Act,

(2) shall receive and review applications submitted by benefitted property owners within the Municipality for financing of energy improvements, and approve or disapprove such applications in accordance with underwriting procedures and requirements established by the Authority,


(3) shall prepare and deliver to the Municipality an annual report which shall contain information related to each qualifying commercial real property within the Municipality, including:

i. A list of each qualifying commercial real property for which the benefitted property owner executed a financing agreement during the prior year;

ii. A list of each qualifying commercial real property where all obligations under the financing agreement have been satisfied or paid in full during the prior year, including the satisfaction date and a copy of the notice of satisfaction;

iii. the total benefit assessment payments made to the Authority in respect of all qualifying commercial real properties; and

iv. for each non-satisfied (not paid in full) benefit assessment (including each benefit assessment approved in the prior year):

A. the date of the financing agreement,

B. the outstanding amount of the financing,

C. the total principal balance and accrued interest outstanding, and

D. the annual payment(s) due to the Authority (which shall include principal and accrued interest) associated with such benefit assessment (including the amount of accrued interest on the initial payment, if different).

(4) shall establish the position of commercial sustainable energy program liaison within the Authority,

(5) shall establish a loan loss reserve or other credit enhancement program for qualifying commercial real property,

(6) may use the services of one or more private, public or quasi-public third-party administrators to administer, provide support or obtain financing for the commercial sustainable energy program, and

(7) shall adopt standards to ensure that the energy cost savings of the energy improvements over the useful life of such improvements exceed the costs of such improvements.


(b) Project Requirements. If a benefitted property owner requests financing from the

Authority for energy improvements under the Act, the Authority shall:

(1) require performance of an energy audit or renewable energy system feasibility analysis on the qualifying commercial real property that assesses the expected energy cost savings of the energy improvements over the useful life of such improvements before approving such financing,

(2) impose requirements and criteria to ensure that the proposed energy improvements are consistent with the purpose of the commercial sustainable energy program, and

(3) require that the property owner provide written notice, not less than thirty days prior to the recording of any lien securing a benefit assessment for energy improvements for such property, to any existing mortgage holder of such property, of the property owner’s intent to finance such energy improvements pursuant to the Act.

(c) Financing Agreement for Project. The Authority may enter into a financing agreement with the property owner of qualifying commercial real property. The financing agreement shall clearly state the estimated benefit assessment that will be levied against the qualifying commercial real property upon completion of the energy improvements. The Authority shall disclose to the property owner the costs and risks associated with participating in the commercial sustainable energy program, including risks related to the failure of the property owner to pay the benefit assessment provided for in the financing agreement. The Authority shall disclose to the property owner the effective interest rate on the benefit assessment, including fees charged by the Authority to administer the commercial sustainable energy program, and the risks associated with variable interest rate financing, if applicable. The Authority shall notify the property owner that such owner may rescind any financing agreement entered into not later than three business days after such financing agreement is executed by the property owner and delivered to the Authority. The financing agreement shall provide for the consent of existing mortgage holders for the benefit assessment lien to be continued, recorded and released by the Municipality, as required by the Act and described in Section 3(c) herein.

(d) Determination of Estimated and Final Benefit Assessments and Payments.

(1) In connection with the completion and execution of the financing agreement, the Authority shall determine the estimated benefit assessment and provide written notice of the estimated benefit assessment to the Municipality.

(2) Upon completion of the energy improvements to the qualifying commercial property, the Authority shall determine the final benefit assessment, including fees charged by the Authority to administer the commercial sustainable energy program, and shall set a fixed or variable rate of interest for the repayment of the benefit assessment amount. Such interest rate, as may be supplemented with state or federal funding as may become available, shall be sufficient to pay the financing and administrative costs of the commercial sustainable


energy program, including delinquencies. The Authority shall provide written notice of the final benefit assessment and interest rate to the Municipality.

(3) It is anticipated that the Authority will decide that the benefit assessment shall be payable in two equal payments respectively payable on July 1 and January 1 of each year so that they are due at the same time as the installments of the Municipality’s real property taxes. If the Municipality changes its practices concerning the billing of annual real property taxes as to the number of installments and their due dates, the Authority will change its practices to the extent possible to correspond with the Municipality’s practices.

Section 3 - Obligations of the Municipality. (a) Placing of Caveat on Land Records. Upon receiving written notice from the Authority of the estimated benefit assessment as provided in Section 2(d)(1) herein, the Municipality shall promptly place a caveat on the land records (on a form provided by the Authority after consultation with the municipality) indicating that a benefit assessment and lien is anticipated upon completion of energy improvements for the qualifying commercial real property. The Authority will reimburse the municipality the cost charged by the Town Clerk for recordation of the caveat.

(b) Levy of Benefit Assessment. Upon receiving written notice from the Authority of the final benefit assessment as provided in Section 2(d)(2) herein, the Municipality shall promptly levy on the next grand list the benefit assessment against the qualifying commercial real property especially benefitted by the energy improvements financed by the Authority, and shall place a lien on the qualifying commercial real property to secure payment of the benefit assessment. As provided in the Act, the benefit assessments levied (on a form provided by the Authority after consultation with the municipality) pursuant to this Agreement and the interest, fees and any penalties thereon shall constitute a lien against the qualifying commercial real property on which they are made until they are paid. The Authority will reimburse the municipality the cost charged by the Town Clerk for recording the lien. Such lien shall be levied and collected in the same manner as the property taxes of the Municipality on real property, including, in the event of default or delinquency, with respect to any penalties, fees and remedies and lien priorities as provided by the Act.

(c) Continuation, Recording and Release of Lien. As provided in the Act, each benefit assessment lien shall be continued, recorded and released in the manner provided for property tax liens, subject to the consent of existing mortgage holders, and shall take precedence over all other liens or encumbrances except a lien for taxes of the Municipality on real property, which lien for taxes shall have priority over such benefit assessment lien. The Authority shall provide to the Municipality written notice of the consent of existing mortgage holders for the lien to be continued, recorded and released by the Municipality.


(d) Assignment of Benefit Assessment Lien.

(1) Upon the written request of the Authority, the Municipality shall assign to the Authority any and all liens filed by the Municipality’s tax collector, as provided in this Agreement. The Authority may sell or assign, for consideration, any and all liens received from the Municipality. The assignee or assignees of such liens shall have and possess the same powers and rights at law or in equity as the Authority and the Municipality and its tax collector would have had if the lien had not been assigned with regard to the precedence and priority of such lien, the accrual of interest and the fees and expenses of collection. The assignee shall have the same rights to enforce such liens as any private party holding a lien on real property, including, but not limited to, foreclosure and a suit on the debt. Costs and reasonable attorneys’ fees incurred by the assignee as a result of any foreclosure action or other legal proceeding brought pursuant to the assignment and directly related to the proceeding shall be taxed in any such proceeding against each person having title to any property subject to the proceedings. Such costs and fees may be collected by the assignee at any time after demand for payment has been made by the assignee.

(2) The Municipality hereby acknowledges that the Authority may sell or assign any and all liens received from the Municipality under Section 3(d) of this Agreement to a trustee for the benefit of the holders of the Authority’s bonds, notes or other obligations issued to finance the costs of the commercial sustainable energy program, and that the holders of the Authority’s bonds, notes or other obligations will rely on the Municipality to levy, collect and remit the benefit assessments to the Authority. Therefore, the Municipality unconditionally agrees that in the event the Municipality does not discharge its duties under this Agreement, the trustee shall have the right to enforce the Municipality’s obligations under this Agreement by institution of legal action against the Municipality.

(e) Billing and Collection; Payment to the Authority.

(1) The Municipality shall bill the benefit assessments in the same manner and at the same time as it bills its real property taxes. The benefit assessment payments shall be a separate clearly defined line item or separate bill and shall be due on the same dates as the Municipality’s real property taxes. The amount of the benefit assessment will be recorded on the Municipality’s tax rolls in the same manner as any other benefit assessment, such that the public will have access to its existence and payment status. The penalties and interest on delinquent benefit assessments shall be charged in the same manner and rate as the Municipality charges for delinquent real property taxes.

(2) Payments of the benefit assessments collected by the Municipality shall be segregated from all other funds of the Municipality and deposited in a separate account for the benefit of the Authority and identifying the Authority as the beneficial owner. The Municipality disclaims any ownership interest or other interests in such account or the amount collected.

(3) The Municipality shall pay all amounts collected with respect to the benefit assessments within any calendar month to the Authority or its assignee no later than thirty days after the amounts are collected. The Municipality will provide monthly collection reports to the Authority, and the Authority, at its own expense, shall have the right to audit the records relating to the benefit


assessments upon reasonable notice at reasonable times. The Authority and Municipality agree to provide each other with such reasonable information as they may request and the Authority and the Municipality agree to provide such information in a computer format satisfactory to the other.

(f) Collection of Delinquent Payments.

(1) If (i) the benefit assessment liens have not been assigned to the Authority pursuant to Section 3(d) of this Agreement, or (ii) the Authority makes a written request to the Municipality for its assistance in the collection of delinquent benefit assessments and related charges, the Municipality, in its sole discretion, and the Authority may enter into a separate agreement for those services, which agreement shall provide for compensation to be paid to the Municipality for its collection services. The agreement may provide for the Municipality to pursue the collection of any delinquent benefit assessments with the same diligence it employs in the collection of the Municipality’s real property taxes, including the commencement of foreclosure proceedings to the extent provided by the then-current statutes of the State of Connecticut, and to take such actions that are required to preserve the lien securing delinquent benefit assessments. The agreement may also provide that the Authority shall have the right to take over the enforcement of any delinquent benefit assessments upon written notice to the Municipality, and thereupon the Municipality will have no further responsibility to collect such amount.

(2) The Municipality will provide written notice to the Authority of any sale or assignment of its real property taxes or any institution of a judicial foreclosure or other proceeding against any real property for delinquent real property taxes if such real property is subject to a lien securing a delinquent benefit assessment. Similarly, the Authority shall provide written notice to the Municipality of the institution of a judicial foreclosure or other proceeding against any qualified commercial real property for a delinquent benefit assessment.

(g) Promotion of Program; Assistance for Authority Financing.

(1) The Municipality shall use good faith efforts to assist the Authority in local marketing efforts and outreach to the local business community to encourage participation in the commercial sustainable energy program, such as including commercial sustainable energy program information on the Municipality’s website, distributing an informational letter from chief elected official to local businesses regarding the program, and conducting one or more business roundtable event(s). (2) The Municipality shall use good faith efforts to assist in gathering and providing information for the Authority to offer, sell and issue its bonds, notes or other obligations to provide funds for the commercial sustainable energy program.


Section 4 - Indemnification.

The Authority agrees that it will protect, defend, indemnify and hold harmless the Municipality and its officers, agents and employees to the extent of available proceeds derived from the benefit assessments from and against all claims, demands, causes of action, damages, judgments, losses and expenses, including reasonable attorney’s fees, arising out of or in connection with the actions of the Authority’s officers, employees and agents under this Agreement. This provision shall survive termination of this Agreement.

Section 5 - Term.

The term of this Agreement shall commence upon the date first written above. This Agreement shall be in full force and effect until all of the benefit assessments have been paid in full or deemed no longer outstanding.

Section 6 -Default.

Each party shall give the other party written notice of any breach of any covenant or agreement under this Agreement and shall allow the defaulting party 30 days from the date of its receipt of such notice within which to cure any such default or, if it cannot be cured within the 30 days, to commence and thereafter diligently pursue to completion, using good faith efforts to effect such cure and to thereafter notify the other party of the actual cure of any such default. The parties shall have all other rights and remedies provided by law, including, but not limited to, specific performance, provided however, in no event shall either party have the right to terminate this Agreement prior to the expiration of the Term, except as provided in accordance with Section 7(c) of this Agreement.

Section 7 - Miscellaneous Provisions.

(a) Assignment or Transfer. Except as provided in Section 3(d) hereof, a party may not assign or transfer its rights or obligations under this Agreement to another unit of local government, political subdivision or agency of the State of Connecticut or to a private party or entity without the prior written consent of the other party and, if required, the prior approval of the holders of the Authority’s bonds, notes or other obligations. If approval of the assignment by the holders of the Authority’s bonds, notes or other obligations is required, such approval shall be obtained in accordance with the indenture or other documents entered into by the Authority in connection with the bonds, notes or other obligations.


(b) Amendment and Termination. After the Authority sells and issues its bonds, notes or other obligations to finance the costs of the commercial sustainable energy program, this Agreement may not be amended or terminated by the parties without the prior approval of the holders of the Authority’s bonds, notes or other obligations, which approval shall be obtained in accordance with the indenture or other documents entered into by the Authority in connection with the bonds, notes or other obligations.

(c) Severability. If any clause, provision or section of this Agreement is held to be illegal or invalid by any court, the invalidity of the clause, provision or section will not affect any of the remaining clauses, provisions or sections, and this Agreement will be construed and enforced as if the illegal or invalid clause, provision or section has not been contained in it.

(d) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which together shall constitute but one and the same instrument.

(e) Notices. All notices, requests, consents and other communications shall be in writing and shall be delivered, mailed by first class mail, postage prepaid, or overnight delivery service, to the parties, as follows:

If to the Municipality:

_____________________________________

_____________________________________

_____________________________________

_____________________________________

If to the Authority:

Clean Energy Finance and Investment Authority

865 Brook Street

Rocky Hill, Connecticut 06067

Attention: President


(g) Amendment and Waivers. Except as otherwise set forth in this Agreement, any amendment to or waiver of any provision of this Agreement must be in writing and mutually agreed to by the Authority and the Municipality.

(h) Applicable Law and Venue. This Agreement and its provisions shall be governed by and construed in accordance with the laws of the State of Connecticut. In any action, in equity or law, with respect to the enforcement or interpretation of this Agreement, venue shall be in the State of Connecticut.

(i) Entire Agreement. This instrument constitutes the entire agreement between the parties and supersedes all previous discussions, understandings and agreements between the parties relating to the subject matter of this Agreement.

(j) Headings. The headings in this Agreement are solely for convenience, do not constitute a part of this Agreement and do not affect its meaning or construction.

(k) Affirmation of Applicable Executive Orders. To the extent applicable to this Agreement, Municipality acknowledges that it will be required to comply with the provisions of the following Executive Orders: Executive Order No. 7C of Governor M. Jodi Rell, promulgated July 13, 2006, concerning contracting reforms; Executive Order No. 14 of Governor M. Jodi Rell, promulgated April 17, 2006, concerning procurement of cleaning products and services; Executive Order No. 16 of Governor John G. Rowland, promulgated August 4, 1999, concerning violence in the workplace; Executive Order No. 17 of Governor Thomas J. Meskill, promulgated February 15, 1973, concerning the listing of employment openings; and Executive Order No. 3 of Governor Thomas J. Meskill, promulgated June 16, 1971, concerning labor employment practices.

IN WITNESS WHEREOF, the Municipality and the Authority have each caused this Agreement to be executed and delivered as of the date indicated above:

(SEAL)

ATTEST:

[CITY/TOWN OF _______________________________________]

_______________________________ By: ______________________________

Its: ___________________________


As to the signatory of the Municipality above,

Signed and delivered in the presence of:

_______________________________ _________________________________

Name: Name:

APPROVED AS TO FORM:

______________________________

[Town Attorney/Corporation Counsel]

CLEAN ENERGY FINANCE AND INVESTMENT AUTHORITY

By: ______________________________

Bryan T. Garcia, President

As to the signatory of the Authority above, signed and delivered in the presence of:

________________________________ __________________________________

Name: Name:

2396839v1


Exhibit C – Initial Application for C-PACE

CEFIA evaluation criteria for this application:

Section 1 1. Is the building type eligible for C-PACE financing? 2. Does the building’s financial performance support C-PACE financing? 3. Is the building’s financial condition creditworthy? Section 2 1. How far along in the project development process is the building owner? 2. Are the energy conservation measures (ECMs) contemplated eligible for C-PACE financing? 3. Is the anticipated size of the project appropriate for the C-PACE financing structure?

Section 1: Building Information

1. Owner’s name and contact info 2. Address of property 3. Type/description of building (ex: office, industrial, multi-family/apartment (> 5 units),

agriculture, data center, food service, food sales, warehouse & storage,, lab, hospital, healthcare outpatient, hotel, non-profit, education, retail, service, municipal building, public assembly)

4. Tenant or Owner -Occupied 5. Date building was constructed 6. Date/description of last major renovation (defined as a renovation that either involved

expansion or reduction of the building’s gross floor area by 10% or more, or that impacted total building energy use by more than 10%)

7. Gross square footage (not including any parking area) 8. Is a parking area associated with the building; if so, provide description (above/below

ground, connected) 9. What type fuel use, e.g., natural gas, oil, steam; fuel provider (s) info 10. Electricity provider 11. Is there a current mortgage on the property? If yes, note the mortgage holder(s) 12. Most recent annual financial statement of property 13. Do you currently pay property taxes on building? Are payments current? 14. Property assessed value (date of last assessment) 15. Estimated current property value 16. Amount of debt (current outstanding loan balance) including a breakout of the amount of

the 1st or 2nd; are mortgage payments current 17. Do you have clear title to the property with no encumbrances 18. Are there any outstanding tax liens or notices of default?


Section 2: Proposed Project Details

1. Name and contact info of energy consultant/project developer 2. Does the project involve a renewable energy system? If so, was a feasibility study

conducted? When and by whom? 3. If the project involves energy conservation measures (ECMs), was an energy audit

conducted on the building? If so when and by whom? 4. Description of the proposed ECMs and projected energy savings 5. Estimated total capital cost (equipment and installation) of ECMs (e.g., recent experience,

R.S. Means (estimating guide), bid process, etc.) 6. Projected first year total energy savings (kBtu) 7. Estimates of rebates/incentives and from whom (utility, federal government, state, etc.) 8. Projected first year total energy cost savings ($) 9. Do you expect to use a contractor, work with an energy service company or another energy

consultant should the project proceed?

CEFIA is subject to the Connecticut Freedom of Information Act (FOIA). Any files or documents associated with this application will be considered a public record and will be subject to disclosure under FOIA. Under C.G.S. §1-210(b) and §16-245n(d), FOIA includes exemptions for, among other things, “trade secrets” and “commercial or financial information given in confidence, not required by statute.” All applicants submitting responses must specifically identify particular sentences, paragraphs, pages, sections or exhibits it claims are confidential and should be exempt.

PLEASE SUMBIT COMPLETED FORM TO [email protected]



Exhibit D – C-PACE Qualified Capital Providers

CPACE Capital Provider Organization

Ameresco

Urban Energy Advisors

Clean Fund

Peoples Bank

Bostonia Partners

Structured Finance Associates

Citigroup Global Markets

Wells Fargo Securities

C-PACE PROGRAM GUIDELINES · 2019-09-16 · Energize Connecticut helps you save money and use clean...

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