Participating Loan Program May 23, 2017 ALABAMA SAVES TM PROGRAM - - PowerPoint PPT Presentation

The AlabamaSAVES Participating Loan Program

May 23, 2017

ALABAMASAVESTM PROGRAM

ADECA – Energy Division of Alabama – Program Sponsor Abundant Power – Program Administrator and Primary Originator

• $65M revolving loan fund based on

$25M SEP grant

• Industrial, commercial, and non-profit
• Purchase and install energy efficiency

equipment, renewable-energy systems and alternative fuel projects

• 10 year or better simple payback or

“above and beyond” building code

• Loan Size: $100,000-$4,000,000
• Historically offered direct loans and

subsidized loans

• Transitioned effective July 2016 to

participating loan program with same eligibility requirements

Enabling Alabama businesses to achieve operational savings through energy efficiency

101

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ALABAMASAVESTM RESULTS

• Funding commitments for 101 commercial, industrial and agricultural loans totaling $51.7MM
• Average loan size to date of $546k
• Energy efficiency in 172 commercial and industrial buildings representing 12.9MM SF
• Private capital participation for 89 loans, resulting in 5:1 leverage of Program funds
• Diverse project finance across all geographic areas of the state and all commercial sectors
• Energy conservation measures financed – lighting, mechanical, industrial processes, solar
• Estimated annual savings of 82.2MM kWh = 90MM lbs of coal avoided = reduction of 148k

metric tons of CO2 = 17k cars off the road

• Superior asset performance with only one default to date
• Transparent and consistent Program processes and structured Program governance

Key elements of success for the Program through 2016

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Increasing number of Alabama lenders participating in the Alabama SAVES program

40+ FINANCING PARTIES – ALABAMA

Ag First Farm Credit Alabama Farm Credit Ally Bank AmeriFirst Bank Auburn Bank Bank of America BBVA Compass Bank Bryant Bank Central Leasing Chase/JP Morgan Charter Bank Citizens Bank and Trust Cullman Savings DLL Exchange Bank of Alabama Farmers Exchange Bank First Bank of Boaz First Commercial Bank First Community Bank First Federal Bank First Metro Bank First National Bank First Southern Bank Gulf Coast Bank & Trust Iberia Bank LED Leasing National Bank of Commerce Noble Bank and Trust Oakworth Capital Bank Peoples Bank of Alabama Peoples Independent Bank PNC Bank Progress Bank Regions ServisFirst Trinity Bank Trustmark Bank Vantage Bank Webster Capital Wells Fargo Winsouth Credit Union

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• Building Improvements: Interior and exterior lighting; HVAC systems and controls;

steam boilers, chillers, cooling towers; power factor correction; sub-metering utilization; building management and controls systems; windows, doors, insulation and other building envelope measures; roofing.

• New Manufacturing Equipment:

where energy efficiency of new equipment provides operational savings that covers debt service on upfront cost of replacement.

• E.g.’s: Heat set tunnel; cold core processing equipment
• Improved Industrial Processes:

where energy savings from process improvement covers debt service associated with upfront cost of improvements.

• E.g.’s: Compressed air upgrades; variable motor and fan upgrades; heat and steam

distribution; steam trap replacements; materials handling and tools; painting systems; stamping.

• Renewable/Clean Energy: solar PV; wind; geothermal; battery storage; biomethane

recovery; CHP

• Water Conservation Measures

Wide Range of Measures Which Can Be Considered as Energy Efficiency

ENERGY EFFICIENCY MEASURES

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• Participate in loans made by Bank Partners to Eligible Borrowers for Eligible

Measures/Projects under Program guidelines (the “Participating Program”).

• Minimal changes to the governance and operating documents of the Program to pivot to

the Participating Program.

• $15 million in funds available for the Participating Program
• Participation of up to 25% of total loan or up to 100% of Eligible Measures if measures

are subset of a larger loan/project.

• Interest rate on Program’s participation is at rate up to 2% below bank’s rate.
• Range of participation - min of $25k (min loan $100k) and max of $1M (max loan $4M).
• Program participates pro-rata in debt service payments on the loan.
• Program’s participating position represents an undivided interest in the loan and is

subordinate to the to the Bank Partner’s position.

• Program Fee of greater of 2% or $1k paid at closing and capitalized in loan.

THE PARTICIPATING LOAN PROGRAM

Purchasing Participations of up to 25% of Qualifying Loans Made by Bank Partners at Below Market Interest Rate

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• Bank Partner enters into Master Participation Agreement with Program, with individual participating

loans scheduled to the agreement.

• Program and Bank Partner originate qualifying loans for the Participation Program.
• Program underwrites measures/project as eligible for Participation Program.
• Bank Partner then underwrites and approves loan and submits an Application for Participation to

Program for approval along with internal underwriting package.

• Upon approval, the Program issues a Commitment Letter stating the participation percentage,

interest rate, and dollar amount and any specific terms/conditions and calculates subsidy.

• At loan closing, Bank Partner, Borrower, and Program execute a Participation Certificate and the

Program funds its participation and an IRB Subsidy Agreement.

• APG is paid Program Fee at closing by Borrower.
• Bank Partner services the loan and collects debt service and remits pro rata share of principal and

interest payments to Program under Participation Certificate.

• Bank provides regular specified reporting on loan to ALS Program.
• APG confirms compliance with DBA requirements and NHPA and NEPA if applicable.

THE PROCESS

Loan Origination and Participation Process

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ALABAMA SAVES – UNDERWRITING

Process in Place for Origination, Underwriting, Closing and Funding

Energy Underwriting

• Bank/Developer/Contractor

submits:

• Project Cost: $100K-$4M
• Annual kWh Savings
• Utility rates
• Annual $$ savings
• Simple payback
• Project deemed eligible based
• n:
• 10 yr. payback or better
• "Above and beyond" base code
• DBA, NHPA & NEPA compliance

Credit Underwriting

• Bank submits Application for

Participation

• Bank provides underwriting

package to Program

• Borrower submits additional

information requested by Program

• Program underwrites and

approves of purchase of Participating Interest

Funding and Implementation

• Program forwards Commitment

Letter for Participating Interest

• Bank/Borrower closes

Participating Loan

• Forwards closing package to

Program

• Program purchases Participating

Interest

• Bank/Program execute

Participation Certificate

• Borrower executes Borrower

Certificate

• Construction and DBA

compliance

• Bank services Participating Loan

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PROJECT VARIETY CASE STUDIES

AlabamaSAVES has provided funding for 102 projects for buildings in a broad range of industries. The cross section of building types shown below highlights the versatility and potential of the program

Birmingham, AL

Medplex Outpatient Surgery Center

INDUSTRY: Medical Facility FUNDING: $152, 540 EXPECTED SAVINGS: $31,600/ year USE OF PROCEEDS: LED Lighting, HVAC control, building envelope improvements

200 West Side Square

INDUSTRY: Multi-tenant office building FUNDING: $1,542,000 EXPECTED SAVINGS: $128,574/ year USE OF PROCEEDS: widow replacement, insulation and enveloping, improved HVAC controls, water and lighting conservation measures

Huntsville, AL

Barber Motorsports Parkway

Birmingham, AL

INDUSTRY: Museum FUNDING:$716,000 EXPECTED SAVINGS: $80,190/ year USE OF PROCEEDS: Lighting retrofit, HVAC controls upgrade to reduce energy consumption INDUSTRY: School FUNDING: $1,180,00 EXPECTED SAVINGS: $120,844/year USE OF PROCEEDS: HVAC replacement and controls improvement, dehumidifier installation

• St. Paul’s Episcopal

School

Mobile, AL

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HISTORIC REHABILITATION PROJECT CASE STUDIES

The AlabamaSAVES Program funds have been used to finance Energy Conservation Measures (ECMs) within a broad scope of rehabilitation projects for historic properties across Alabama.

THE PIZITZ BUILDING

LOCATION: Birmingham, AL PROPERTY SIZE: 253K Sq Ft ECMs FUNDED: $4,000,000 CONSERVATION MEASURES: Roofing insulation and materials; Weatherization of building façade and exterior; Wall insulation; Replace HVAC and chillers; LED energy efficient lighting; Low flow water fixtures; Energy Start appliances

HISTORICAL MIXED USE

THE THOMAS JEFFERSON HOTEL

LOCATION: Birmingham, AL PROPERTY SIZE: 150K Sq Ft ECMs FUNDED: $3,860,000 CONSERVATION MEASURES: Repair and replace windows and doors; Weatherize and air seal façade; Replace coal fired boiler with modern HVAC; “water sense” fixtures; “Energy Star appliances; Regenerative elevator; Electrical controls; LED lighting; Roofing and insulation

HISTORICAL MIXED USE

THE BUICK BUILDING

LOCATION: Mobile, AL PROPERTY SIZE: 38K Sq Ft ECMs FUNDED: $1,140,000 CONSERVATION MEASURES: Roofing insulation and materials; Building envelope weatherization; Windows; LED lighting; Energy efficient HVAC; Elevator and Energy Star appliances

HISTORICAL COMMERCIAL HISTORICAL COMMERCIAL

THE HISTORIC FEDERAL RESERVE

LOCATION: Birmingham, AL PROPERTY SIZE: 97K Sq Ft ECMs FUNDED: $4,000,000 CONSERVATION MEASURES: Windows; Roofing insulation and materials; Building envelope weatherization; LED lighting; Energy efficiency HVAC; Elevator; Economizers; VAV fans; Water conservation fixtures www.abundantpower.com 9 May 23, 2017

LIGHTING RETROFIT LEASING CASE STUDIES

The AlabamaSAVES Program has participated in lease financing to fund energy efficient lighting retrofits within a broad scope of property types across Alabama

GIBSON OIL COMANY

LOCATION: Butler, Gilbertown, Silas, Chatom, Sweetwater, Coffeeville, and Jackson, AL PROPERTY SIZE: 17K Sq Ft total ECMs FUNDED: $209,532 SAVINGS PER YEAR: $21,829 displaced power costs equaling 256,816 kWh’s in displaced energy PROJECTED PAYBACK: 5.2 years CONSERVATION MEASURES: Energy efficient LED Canopy, LED FixtureS, and LED Cooler lighting CONVIENCE STORES (7)

BREWTON IRON WORKS

LOCATION: Brewton, AL ECMs FUNDED: $115,233 SAVINGS PER YEAR: 438,478 kWh’s in displaced energy equaling $43,682 in displaced power costs PROJECTED PAYBACK: 4.7 years CONSERVATION MEASURES: retrofit the existing T-12 and metal halide lighting with LED lighting throughout the interior of the 82K sq ft manufacturing facilities.

MACHINED PARTS SUPPLIER

HEALTH ACTIONS P.A.

PHYSICAL THERAPY MEDICAL CLINIC

LOCATION: Jackson, AL ECMs FUNDED: $115, 148 SAVINGS PER YEAR: 106, 945 kWh displaced equaling $12,039 in displaced energy costs PROJECTED PAYBACK: 7.3 years CONSERVATION MEASURES: LED Lighting installed throughout the clinic resulting in a 69% reduction in lighting energy used throughout the 26 sq ft property.

WL PETREY WHOLESALE

LOCATION: Montgomery, AL ECMs FUNDED: $4,000,000 SAVINGS PER YEAR: 874,419 kWh’s displaced by the measures equaling $87,419 savings PROJECTED PAYBACK: 3.5 years CONSERVATION MEASURES: retrofit the existing lighting with LED lighting throughout the interior of the 200k sq ft property

WHOLESALE DISTRIBUTOR

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SOLAR PV PROJECT CASE STUDIES

AlabamaSAVES has provided over $2.9MM in funding for 11 solar photovoltaic (PV) projects, both rooftop and ground mounted, representing over 1.15 MW of solar power capacity, expected to generate over 1,540 MWhs annually across Alabama.

APEL STEEL

LOCATION: Cullman, AL PROJECT CAPACITY: 340 kW (456 MWh per year) FUNDING: $984,370 USE OF PROCEEDS: Installation of solar panels and battery storage on vacant land adjacent to an 87K square foot industrial facility to provide peak-shaving power.

GROUND MOUNTED SOLAR

SERVICE STEEL

LOCATION: Huntsville, AL PROJECT CAPACITY: 150 kW (201 MWh per year) FUNDING: $339,150 USE OF PROCEEDS: Installation of solar panels and electrical equipment on a rooftop of a commercial real estate property to reduce fossil fuel demand and power costs from daily business operations.

ROOFTOP MOUNTED SOLAR

THE UNITED WAY BUILDING

ROOFTOP MOUNTED SOLAR

LOCATION: Huntsville, AL PROJECT CAPACITY: 35 kW (69 MWh per year) FUNDING: $218,000 USE OF PROCEEDS: Installation of solar panels and electrical equipment on a rooftop of a 14.5K square foot commercial real estate property to reduce energy related

• perating costs.

PJ KRAFT SOLAR ENTERPRISES

LOCATION: Athens, AL PROJECT CAPACITY: 200 kW (456 MWh per year) FUNDING: $690,000 USE OF PROCEEDS: Installation of solar panels and electrical equipment for a distributed generation project interconnected to the Cullman Electric Cooperative. The Project has a power purchase agreement with (TVA).

GROUND MOUNTED SOLAR

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CONTACT

For more information on AlabamaSAVES, please contact: Our mission is to expand energy efficiency in the built environment through innovation and excellent delivery of transformative financial and technology solutions that motivate building owners and occupants to make lasting change in energy consumption.

Greg Montgomery 704.271.9889 gmontgomery@abundantpower.com

Acknowledgement: “This material is based upon work supported by the U.S. Department of Energy –State Energy Program and the Energy Division of the Alabama Department of Economic and Community Affairs under Award Number DE-EE0000224.” Disclaimer: “This report was prepared as an account of work sponsored by an agency of the United States

• Government. Neither the United States Government nor any agency thereof, nor any of their employees, nor any of their contractors, subcontractors or their employees, makes any

warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or any third party’s use or the results of such use of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof or its contractors or subcontractors. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.

Abundant Power is an energy management services company focused

• n providing transformative

financial and technology solutions for the built environment ecosystem.

Financial Solutions and Underwriting Building Science and Engineering Energy Management Technology

CleanSource Capital is an affiliate established to provide design and administration of proprietary funds dedicated to energy efficiency financing.

WHO WE ARE

EXPERIENCE WITH ENERGY EFFICIENCY PROGRAMS

Leveraged Revolving Loan Fund (RLF)

• AlabamaSAVESTM – $65MM Med/Large C&I, Non-profits
• AlbamaWISETM – Pilot program for residential retrofits

Qualified Energy Conservation Bonds (QECB’s)

• St. Louis County SAVESTM – $10.3MM Residential, C&I, Non-profits
• South Carolina SAVESTM – $13MM Government, C&I, Non-profits
• NC Ag Finance Authority - $27MM Renewable Energy
• Virginia SAVESTM – $66MM Government, C&I, Non-profits
• Maryland SAVESTM– $48MM Government, C&I, Non-profits

Property Assessed Clean Energy (PACE)

• DC Green Forward – $250MM C&I

Energy Management Services Agreements (EMSA)

• EPxTM – 12 million SF Small/Med Commercial

AP designs and manages energy efficiency financing programs nationwide, enabling more than $467 million in energy efficiency implementation.

SAVES™ (Sustainable and Verifiable Energy Savings) is Abundant Power’s proprietary, core energy financing platform for designing and administering programs:

• Credit and financial underwriting standards incorporating multiple security instruments

and repayment mechanisms.

• Established origination and servicing standards designed to create transparency and

meet requirements of secondary markets.

• Energy underwriting protocols, including prescriptive and performance options to

maximize energy savings and optimize cash flows.

• Energy measurement and verification, including QA/QC protocols, as well as contractor

and auditor standards and monitoring and overall process management.

SAVES PLATFORM OVERVIEW

CleanSource is the affiliate Abundant has established to leverage its financing expertise in the energy efficiency market by expanding the SAVES program into other jurisdictions and by providing financial advisory services for structuring and raising project capital.

• Focus is on specified energy efficiency measures (lighting, HVAC, controls) and

compressed natural gas conversions (fleets, stationary power, bio-methane).

• Manages programs in Alabama, South Carolina, North Carolina, Virginia, Maryland.