The Department of Business, Economic Development, and Tourism (DBEDT) has issued its first \u201ctrue-up\u201d for the Green Energy Market Securitization (GEMS) bonds. The true-up, a required element of the program approved by the Public Utilities Commission, is a periodic accounting of funds received from the Green Infrastructure Fee, or GIF.<\/p>\n
Those collections, which are paid by customers of Hawaiian Electric utilities on O`ahu, Maui and the Big Island, are weighed against the payments due on the $150 million bond DBEDT took out last November to finance the GEMS program. As Environment Hawai`i <\/i>reported in March, GEMS is intended primarily to help underserved utility customers reap the benefits of solar energy and other green energy technologies.<\/p>\n
According to the May 29 report, the utilities\u2019 daily payments to the fund trustee amount to more than $61,000. Collections from last December, when the fee began to appear on utility bills, through the end of June were expected to total around $7.4 million.<\/p>\n
The bond payment, due July 1, is around $7.1 million. The excess amount collected is to be applied to the next periodic payment, with the GIF that is to be levied on ratepayers adjusted to reflect that excess.<\/p>\n
In addition to the bond payments, DBEDT lists additional charges to be paid by GIF revenue. These ongoing \u201cfinancing costs\u201d include \u201ctrustee fees and expenses\u201d of around $32,000 every six months; \u201cdepartment legal, consulting, and accounting fees\u201d of more than $6,000;\u00a0 \u201cservice provider legal and accounting fees\u201d of around $17,000; rating agency fees of nearly $29,000; service provider fees of over $5,000; and \u201cmiscellaneous\u201d charges of more than $11,000.<\/p>\n
Offsetting this is interest earned on the more than $140 million held by Bank of New York Mellon. For the first seven months of the program, that amounted to $113.<\/p>\n
If the GEMS program worked as it was apparently anticipated to, the GIF paid by utility customers would be reduced by payments from residential and nonprofit users who had obtained loans from the bond funds to install solar panels on their homes and offices.<\/p>\n
However, as of mid-June, no loans had been approved.<\/p>\n
Withheld Studies<\/i><\/b><\/p>\n
When DBEDT applied to the Public Utilities Commission for its approval of GEMS in June 2014, it attached several studies to the application, including four that were not made public.<\/p>\n
Environment Hawai`i <\/i>has filed requests for those reports, which are, as described in the PUC filing, a study on anticipated benefits and impacts of the program; an analysis of \u201cBreak-Even Program Repayment Cash Flows;\u201d \u201cGEMS Product Guidelines;\u201d and \u201cPerspectives of GEMS Financing Products.\u201d<\/p>\n
Last month, DBEDT released one of the four requested studies \u2013 that of anticipated benefits and impacts \u2013 but withheld the remaining three. According to Alan Yonan, the public information officer for DBEDT\u2019s Energy Office, \u201cthere is sensitive information in [the remaining studies] that still needs to be kept confidential.\u201d<\/p>\n
The \u201cPerspectives of GEMS Financing Products,\u201d Yonan said, \u201cidentifies structural limitations of available financing structures in which GEMS financing may participate. If made public, such information could prevent the Hawai`i Green Infrastructure Authority (HGIA) from obtaining favorable loan terms on the state\u2019s behalf.\u201d The HGIA is the body set up by law to oversee the GEMS program.<\/p>\n
The \u201cGEMS Product Guidelines\u201d report, he continued, \u201cincludes details that, if made public, could erode HGIA\u2019s negotiating with potential developers, installers, and financial service providers.\u201d<\/p>\n
Finally, the \u201cBreak Even Program Repayment Cash Flows,\u201d he said, \u201ccontains certain portfolio assumptions that, if made public, could put HGIA at a disadvantage for program repayment.\u201d<\/p>\n
Anticipated Impacts<\/i><\/b><\/p>\n
As for the \u201cAnticipated Program Benefits and Impacts,\u201d a three-page study prepared by GEMS contractor Renewable Funding, it states that by combining the net proceeds from the GEMS bond float ($143 million) with private capital, \u201cmore than 92 gigawatt-hours of solar energy maybe produced annually,\u201d an amount representing less than 1 percent of the state\u2019s annual electricity consumption. The 7,400-plus photovoltaic projects that GEMS loans could support would reduce petroleum consumption \u201cby over 7 million gallons, or 169,000 barrels annually,\u201d the report states.<\/p>\n
Under the heading \u201cMarket Expansion Impact Metrics,\u201d the study says GEMS \u201cwill expand the availability of financing for underserved markets to invest in clean energy installations for over 40,000 households that currently have limited or no financing options.<\/p>\n
\u201cGEMS aims to enable \u2018the democratization of clean energy,\u2019 and the program will report on its success in expanding the eligible market, especially in the underserved markets, including such things as expansion of credit underwriting criteria, use of alternate underwriting metrics, and use of alternative repayment mechanisms.\u201d<\/p>\n
A table that lays out the \u201ccalculation of anticipated benefits and metrics\u201d indicates that GEMS is expected to support development of 14 megawatts (MW) of rooftop solar financed through consumer loans to 4,000 utility customers; another 9 MW will be placed onto the roofs of 2,572 customers who lease their PV systems through third-party providers; 44 MW is to be installed using \u201chybrid levered debt\u201d onto 988 buildings owned or leased by nonprofit organizations that have entered into power purchase agreements with third party providers.<\/p>\n
These 7,500 installations, the study says, account for all $143 million of the GEMS bond proceeds.<\/p>\n
Estimated savings per year on the utility bills of these customers is $9,866,894 million.<\/p>\n
—\u00a0Patricia Tummons<\/i><\/b><\/p>\n","protected":false},"excerpt":{"rendered":"
The Department of Business, Economic Development, and Tourism (DBEDT) has issued its first “true-up” for the Green Energy Market Securitization (GEMS) bonds. The true-up, a required element of the program approved by the Public Utilities Commission, is a periodic accounting … Continued<\/a><\/p>\n","protected":false},"author":1,"featured_media":7692,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14,387],"tags":[7],"class_list":["post-8214","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","category-july-2015","tag-patricia-tummons"],"_links":{"self":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/8214","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8214"}],"version-history":[{"count":0,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/posts\/8214\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=\/wp\/v2\/media\/7692"}],"wp:attachment":[{"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8214"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8214"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/environment-hawaii.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8214"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}