RESOURCES STRATEGY FOR THE

HOLLAND COMMUNITY ENERGY STRATEGYPresentation to the Holland City Council, the Holland Board of Public Works, and the Holland CES

Steering Committee

Final Version, July 2013

Purpose of “Resources” Project Findings and Recommendations: • Structure for CES Implementation • Explore Creation of a “Holland Energy Trust”• Key Partnerships• Positioning Holland to be Competitive • Funding Advocacy

Specific Funding / Resource Recommendations Key Next Actions

Overview of Presentation

Sustainable Strategies DC (S2) was retained by the Holland BPW, under the guidance of the Holland CES Steering Committee, to recommend how Holland can secure resources for the implementation of the Community Energy Strategy

S2 has worked with Holland for 15 years on energy, clean air and other issues. This report is based on: interaction with the Steering Committee, the CES Task Forces, and the BPW; a site visit in December 2012; substantial research into best practices and potential resources; and interaction with federal, state, non-profit, and organizational officials with expertise in community energy programs and resources

Project deliverables: detailed “Resources Strategy for Holland Clean Energy Strategy,” summary “Resources Roster” & summary “Key Actions” documents

Purpose of “Resources” Project

Holland CES is Solid & Timely: The Holland CES provides a solid mix of cleaner energy generation, renewable generation, district energy, and major efficiency retrofits. Now is the time for clean energy (see SOTU & Gov. Message)

Implementation Requires Sustainable Strategy: The scope and cost of Holland’s CES – up to $400 million – means that the community must establish a well-conceived, sustainable, ongoing program that positions Holland to attract resources for implementation. This effort cannot be conducted with “one-off” grant applications.

Holland Needs to Become a Player in Community Energy to Get Major Funding: Thus, Holland should seek to raise the profile of the CES; tap into emerging national initiatives; build partnerships with top state, federal and regional programs; be ready with seed capital; and leverage private sector finance

27 Resources Identified: S2 has identified 27 opportunities for grants, loans, technical assistance, and other resources that could potentially support the Holland CES.

Findings & Recommendations – Overview

The City of Holland should provide leadership from the top by backing the CES implementation, serving as spokespeople in the community, applying for grants, and potentially providing seed funding for CES implementation.

The Holland Board of Public Works should use its experience and capabilities to manage CES implementation. This would certainly include the generation-side components of the gas generation plant, the district energy system, and industrial energy bundling. BPW should also manage the customer-side CES components including the home energy improvement, business retrofit, building labeling, and community/customer outreach aspects of the CES.

Holland should consider creating a “Sustainability Manager” position to support CES implementation, and take advantage of grant resources for sustainability programs.

Holland BPW should explore partnership with Michigan Saves for implementation of efficiency retrofits and building labeling.

Holland should explore the creation of a “Holland Energy Trust” for implementation

Findings & Recommendations – Structure for CES

Holland should explore the creation of a “Holland Energy Trust”, a quasi-public or special purpose entity that would be formed to lead, oversee, fund, and staff the implementation of the home efficiency retrofit, commercial/institutional retrofit, building labeling, and public outreach components of the Holland CES. The Holland Energy Trust could potentially:

Integrate the leadership of key organizations into one, independent but connected structure, including the City, BPW, philanthropic organizations and potential donors, and key stakeholder organizations

Aggregate and assimilate sources of funding and finance Be a unique, innovative approach to community energy programs that would likely have a

competitive edge in attracting and securing resources from state, federal, and

philanthropic funders One potential location for the Holland Energy Trust could be a newly launched “Holland

Sustainability Institute” housed at Hope College. In July 2013, Holland is working with S2

to pursue funding from community and national foundations to catalyze the launch of such an Institute.

Findings & Recommendations –Holland Energy Trust

Michigan Energy Office – funding conduit for state and federal grants

Michigan Saves – ready-made for home and commercial retrofits, excited to work with Holland

Banks – as third-party lenders for Michigan Saves International District Energy Association / Midwest Clean

Energy Applications Center – implementing Obama Administration’s combined heat and power initiative

Argonne National Labs – local presence, connection to DOE & potential funder

Renewable Funding – clean energy investor Other national organizations such as ACEEE and APPA – for

technical assistance, profile and partnerships

Findings & Recommendations – Key Partnerships

State is a funder of community energy and efficiency projects

Potential conduit for U.S. Department of Energy funding:

I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy. . . . I’m also issuing a new goal for America:  Let’s cut in half the energy wasted by our homes and businesses over the next 20 years.   We'll work with the states to do it.  Those states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make that happen.

-- President Obama, 2013 State of the Union Address

Key Partnerships – Michigan Energy Office

Leading national program for efficiency and renewable retrofits, funded with federal and state grants, recognized by Governor Snyder’s 2013 Energy address

Very interested in partnership with Holland Loans up to $20,000 for home energy retrofits Loans up to $150,000 for commercial energy retrofits Key Issue: need a Holland approach that buys down default 7% interest

rates to a lower level, such as 2%. Can partner with BPW to integrate customers & use on-bill repayments Can tie loans to the house/meter instead of customer for longer

paybacks Will work with local/regional Holland banks or other third-party finance,

and protect 80% of loss Ready-made marketing & outreach tools Contractor network already established

Key Partnerships – Michigan Saves

Holland could build upon Michigan Saves foundation for broader, more robust retrofits using “Pay as You Save” approaches

A Holland Energy Trust could aggregate and lead the outreach and financing aspects of Holland’s Michigan Saves program, working in close collaboration with the BPW. A Holland Energy Trust could combine BPW capital, energy optimization funds, City contributions, state and federal grants, philanthropic and other resources to buy down the cost and promote the use of the Michigan Saves program

Holland could seek to integrate a Building Label program into the Holland-Michigan Saves initiative. One emerging labeling system is the U.S. DOE “Home Energy Score” system.

Key Partnerships – Michigan Saves More

President Obama issued an August 2013 Executive Order to promote combined heat and power system

Holland can partner with the International District Energy Association and the Midwest Clean Energy Applications Center to bring technical assistance and resources to the Holland District Energy project

Key Partnerships – District Energy

Create a “Holland Resources Roster” document that lists key components of the initiative, identifies resource needs, and requests the best sources and programs that could fund those project needs

Create project briefing sheets Identify matching resources and leverage early on Obtain stakeholder support and enlist spokespeople early

on Join the Better Buildings Challenge Join Climate Communities Convene a “Clean Energy Community Roundtable”

workshop in Holland

Positioning Holland to be Competitive for Resources

Evaluate the 27 resources highlighted in this report, determine which ones are most valuable to CES implementation, and make plans to seek and secure these resources with strong applications.

Engage key targets for advocacy including the Michigan Energy Office, the DOE Office of Energy Efficiency and Renewable Energy, the EPA Office of State and Local Voluntary Air Programs, other federal agencies, Senator Stabenow, and the White House.

Use briefing sheet materials, conference calls, face-to-face visits, and invitations to Holland to build collaboration. Present clear, well-conceived, and well-articulated requests for resources and support.

Funding Advocacy for the Holland Clean Energy Plan

Grants Local Sustainability Matching Grant: Funders Network matching grants for

sustainability projects and staff (up to $60,000) Environmental Solutions for Communities Grant: Wells Fargo/National Fish &

Wildlife Foundation grants for sustainability initiatives for efficiency (up to $100,000)

Michigan Energy Office “State Energy Program” grants for efficiency or CHP (up to $100,000)

Partnership with Michigan Energy Office to secure existing “State Energy Program Competitive” grant and/or new U.S. DOE efficiency retrofit funding

Re-direction of U.S. DOE clean energy funds into Holland CES efficiency/CHP programs (potentially large)

Economic Development Administration, Public Works & Infrastructure grant for CHP (up to $2 million)

DOE / Ottawa County Weatherization funds Philanthropy – many sources, including The Energy Fund

Specific Resources for Holland CES

LendingMichigan Saves for residential (up to $20,000) and

commercial retrofits (up to $150,000)MSHDA Property Improvement Program loans (up to

$50,000 per house)Qualified Energy Conservation Bonds to capitalize

efficiency or CHP (typically <2% interest over 15 years) (potentially $2.6M locally)

Specific Resources for Holland CES

The City of Holland and the Holland Board of Public Works should consider formation of a “Task Force” to explore the creation of a “Holland Energy Trust” that includes diverse members that could include the existing Holland CES Steering Committee, a representative of philanthropy, a prominent business representative, Hope College, and possibly representatives from key state and federal energy organizations such as the Michigan Energy Office or the offices of Congressman Fred Upton and Senator Debbie Stabenow.

The Task Force should be directed to develop and report back to the City and BPW, within a short period (such as three months), a set of recommendations on whether and how to form a Holland Energy Trust, how it should be structured, what roles it would fulfill, how it would attract and utilize funding resources to implement the CES, how it would integrate with established entities like the BPW for implementation, and how it would make use of external expertise such as Schneider Electric, Michigan Saves, or other consulting organizations.

Key Overall Action – Explore a “Holland Energy Trust”

1) Identity the Key Components and Structure for CES Implementation2) Create Resources Roster3) Create Project Briefing Sheets 4) Identify Match & Leverage Funding 5) Build Key Partnerships, particularly with the Michigan Energy Office, Michigan Saves, the

International District Energy Association, the Midwest Center for Clean Energy Applications, Argonne National Laboratory, and the banking sector.

6) Apply for Grants and Funding Initiatives7) Conduct Advocacy8) Raise the Holland CES Profile by participating in efforts on the forefront of national

energy and sustainability initiatives, such as the Obama SOTU challenge, the Governor’s Energy Reinvention initiative, and the U.S. DOE CHP Partnership. Join the DOE Better Buildings Challenge, and consider joining the Climate Communities coalition.

9) Convene a “Clean Energy Community Roundtable” in Holland that would bring together federal and state officials, regional and local officials, and representatives from the leading clean energy organizations that have been identified as potential supporters of the Holland CES initiative. Use the Roundtable to boost the initiative, educate allies, and push for resources to support CES implementation. The White House is seeking locations for such Roundtables now.

10) Establish an Effective Public Outreach Strategy

Key Next Actions

Questions & Discussion

Thank You!Matt Ward

Sustainable Strategies DCMatt.Ward@StrategiesDC.com

202.261.9880www.StrategiesDC.com