AEE: California Can Leverage Private Capital to Expand Energy Savings for School Buildings Under Prop 39
White Paper Outlines Three Ways to Stretch Funds for Efficiency Projects from $2.6 Billion to More Than $10.5 Billion
SAN FRANCISCO, June 4, 2013 /PRNewswire-USNewswire/ -- California can extend the duration and effectiveness of Proposition 39, the state's landmark energy improvement initiative for schools and public buildings, if it dedicates a portion of the revenue to leverage private sector capital for energy efficiency and advanced energy projects, according to a new white paper from Advanced Energy Economy (AEE), a national business organization representing the advanced energy industry.
In November 2012, California voters approved Proposition 39, which is anticipated to generate approximately $1 billion per year in additional corporate tax revenue, with approximately half of the revenue over the first five years dedicated to energy efficiency and advanced energy projects primarily in public school buildings. The AEE white paper outlines three options to attract and leverage outside capital to expand total energy savings. These options, developed in consultation with California advanced energy business and financial leaders, incorporate innovative financing mechanisms to stretch the estimated $2.6 billion that will be generated by Prop 39 over five years to more than $10.5 billion over 30 years. This leveraging of private capital will finance a far greater number of energy-saving improvements in schools and other public buildings.
"Leveraging Prop 39 revenues can transform this initiative from a one-time opportunity to an ongoing source of funding to support energy efficiency and advanced energy projects in California over the long term, generating far more energy savings," said Graham Richard, CEO of Advanced Energy Economy. "California is already at the vanguard of America's advanced energy future. By making smart use of these funds, California can add to that leadership and be a model for other states and the nation."
With over 1,000 school districts in California, a five-year program to expend more than $2.5 billion in Prop 39 revenues will leave policy makers with the difficult choice of either funding small efficiency upgrades in large numbers of schools, or deeper, more capital intensive efficiency upgrades in just a small number of schools. Additionally, energy upgrades are needed at numerous public facilities beyond K-14 schools. If Prop 39 funds are deployed without the benefit of leveraging, many of the more extensive retrofit opportunities that would save the most money will go unrealized. A leveraging strategy significantly grows the pool of available funding, enabling deeper retrofits and projects in a much larger number of districts, even making it possible to open up the program up to other public facilities in need of energy improvements.
"Limiting Prop 39 to a straight grant program would squander a unique opportunity to have a transformative impact," said Steve Chadima, AEE Senior Vice President of Communications and Director of California Initiatives. "By dedicating a significant portion of revenues to finance mechanisms that spur greater private capital participation, state policymakers can increase the impact of Prop 39 four-fold and extend its energy-saving benefits well beyond the initiative's five-year timeframe."
AEE's approach is based on the following principles, developed in consultation with advanced energy executives and project finance experts and transmitted to Governor Brown and legislative leaders last month:
In "Expanding Energy Savings Through Leverage: Proposals for Getting More Value Out of Proposition 39," AEE offers three different strategies for maximizing Prop 39's energy saving impact:
A full copy of the white paper is available for download here: http://www.aee.net/index.cfm?objectid=57177050-CC75-11E2-8711000C29CA3AF3
About Advanced Energy Economy (AEE)
SOURCE Advanced Energy Economy (AEE)
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