Advertisement

April 16, 2014

California Public Utilities Commission (CPUC) Orders On-Bill Repayment For Energy Efficiency and Other Demand-Side Projects

The California Public Utilities Commission (CPUC) recently ordered California investor-owned utilities (IOU) to implement on-bill repayment (OBR) programs by the end of the first quarter of 2013 to support “all types of demand-side investments.”  OBR enables building owners or occupants to repay eligible project obligations through their monthly utility bills. 

Unlike on-bill financing (OBF) loans, which are made by the IOUs under pilot program tariffs, OBR programs can be underwritten and funded by far wider array of third-party capital sources, including commercial lenders, investor funds and vendors.  Because default rates on utility bills tend to be low, OBR lenders/investors should be able to offer low finance rates, longer maturities and better terms as compared to conventional energy efficiency loans.  Repayment will be made through the IOUs’ billing and collections, meaning that the original owner/tenant will not be responsible for making payments after a sale of the property or after moving.

OBR programs are expected to be made available across a wide array of property types – governmental, institutional, commercial, non-for-profit and residential.  Program participation could come from a variety of funding vehicles including loans, energy service agreements and power purchase agreements.  Customers will pay a single monthly bill for both energy and OBR program payments that should be lower than their previous bills.  This “pay as you save” feature should enable greater market penetration across more property market segments.  In addition to IOU “back-office” support (billings and collections), OBR is linked to project performance measurement and verification by the IOU. 

The Environmental Defense Fund estimated that an OBR program in California could generate $2.7 billion of third-party investment per year, create 20,000 jobs and reduce annual CO2 emissions by seven million tons after five years.

© 2014 McDermott Will & Emery

About the Author

Partner

Thomas L. Hefty is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.

312-984-7636

Boost: AJAX core statistics

Legal Disclaimer

You are responsible for reading, understanding and agreeing to the National Law Review's (NLR’s) and the National Law Forum LLC's  Terms of Use and Privacy Policy before using the National Law Review website. The National Law Review is a free to use, no-log in database of legal and business articles. The content and links on www.NatLawReview.com are intended for general information purposes only. Any legal analysis, legislative updates or other content and links should not be construed as legal or professional advice or a substitute for such advice. No attorney-client or confidential relationship is formed by the transmission of information between you and the National Law Review website or any of the law firms, attorneys or other professionals or organizations who include content on the National Law Review website. If you require legal or professional advice, kindly contact an attorney or other suitable professional advisor.  

Some states have laws and ethical rules regarding solicitation and advertisement practices by attorneys and/or other professionals. The National Law Review is not a law firm nor is www.NatLawReview.com  intended to be  a referral service for attorneys and/or other professionals. The NLR does not wish, nor does it intend, to solicit the business of anyone or to refer anyone to an attorney or other professional.  NLR does not answer legal questions nor will we refer you to an attorney or other professional if you request such information from us. 

Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The choice of a lawyer or other professional is an important decision and should not be based solely upon advertisements. Attorney Advertising Notice: Prior results do not guarantee a similar outcome. Statement in compliance with Texas Rules of Professional Conduct. Unless otherwise noted, attorneys are not certified by the Texas Board of Legal Specialization, nor can NLR attest to the accuracy of any notation of Legal Specialization or other Professional Credentials.

The National Law Review - National Law Forum LLC 4700 Gilbert Ave. Suite 47 #230 Western Springs, IL 60558  Telephone  (708) 357-3317 If you would ike to contact us via email please click here.