Center for Energy and Environment
212 3rd Avenue North, Suite 560
Minneapolis, MN 5540 1
Phone (612) 335-5858
Fax: (612} 335-5888
February 12, 2010
Natalie Buys
Minnesota Depat1ment of Commerce
85 Seventh Place East, Suite 500
Saint Paul, MN 55101
Subject: Center for Energy and Environment- CI Facility Grant Proposal
Category 2 -Revolving Loan Programs
On behalf of the Board of Directors and staff of the Center for Energy and Environment (CEE), I am
pleased to submit to the Depat1ment of Commerce a proposal for a grant to fund a revolving loan program
called the Energy Savings Fund for Nonprofits. CEE is a nonprofit, 501(c)(3) organization whose
mission is to promote efficient use of natural and economic resources. To advance this mission, CEE will
invest $330,000 in the Energy Savings Fund for Nonprofits and will provide in-kind contributions of staff
time and other resources for the development and on-going operation of the Energy Savings Fund, subject
to the terms of a mutually acceptable grant agreement.
CEE has designed the proposed Energy Savings Fund for Nonprofits to induce and enable nonprofit
organizations to complete energy-efficiency projects in their facilities that they otherwise would not
undettake due to financial barriers. The Energy Savings Fund will be marketed ambitiously, and
patticipants will receive expet1technical assistance; but the Fund will incur no costs for marketing or
technical services. The Energy Savings Fund for Nonprofits will be integrated into CEE's One-Stop
Efficiency Shop lighting program in Xcel Energy's service territory, and it will complement the technical
services and rebate programs of utilities statewide. CEE's implementation pat1ner, NICE/EnerChange,
will serve as liaison to the United Way and to the 200 Minnesota nonprofit agencies funded by the United
Way; and the Minnesota Council ofNonprofits will promote the Energy Savings Fund to its 2,000
members.
With an initial capitalization of $600,000, the Energy Savings Fund for Nonprofits will finance about 180
projects with total costs of $2.8 million over ten years; and we estimate that for every $1.00 of grant
funds, nonprofit organizations will realize lifetime energy cost savings of $64.42. As impressive as these
estimated impacts are, the potential of the Energy Savings Fund for Nonprofits is much greater. CEE
believes that early success will attract investments from philanthropic foundations and other institutional
investors, whose funding pat1icipation will multiply the lending capacity and resulting benefits of the
Energy Savings Fund for Nonprofits.
Thank you for your consideration.
Respectfully,
Sheldon Strom
President
www.mncee.org
www. mnenergychallenge.org
Equal Opportunity Employer
Center for Energy and Environment’s
CI Facility Grant Proposal
“Energy Savings Fund for Nonprofits”
Submitted to:
Minnesota Department of Commerce
Office of Energy Security
85 Seventh Place East, Suite 500
Saint Paul, MN 55101
Submitted by:
Center for Energy and Environment
212 3rd Avenue North, Suite 560
Minneapolis, MN 55401
February 12, 2010
Table of Contents
A. APPLICANT INFORMATION ........................................................................................................ 1
B. PROGRAM SUMMARY................................................................................................................ 2
Program Structure ....................................................................................................................... 2
Targeted Program Participants.................................................................................................... 3
Characteristics of the Nonprofit Sector....................................................................................... 3
Projected Annual Number of Loans and Loan Volume ............................................................... 4
Program Timeline ........................................................................................................................ 4
Key Program Personnel and Program Partners........................................................................... 4
C. PROGRAM NARRATIVE............................................................................................................... 5
Goals of the Program................................................................................................................... 5
Eligibility Criteria.......................................................................................................................... 6
Loan Application and Review Process ......................................................................................... 7
Credit Standards and Risk Management ..................................................................................... 8
Loan Terms and Fees ................................................................................................................... 9
Promotion, Marketing, and Technical Services ........................................................................... 9
Projected Administrative, Marketing and Servicing Costs ........................................................ 11
Financial Projection ................................................................................................................... 12
D.1 WORK PLAN, TASKS AND MILESTONES ................................................................................. 15
D.2 PROJECT TEAM AND PARTNERS ............................................................................................ 17
Center for Energy and Environment.......................................................................................... 17
National Initiative by Consumers of Energy (NICE) ................................................................... 21
Minnesota Council of Nonprofits .............................................................................................. 22
ATTACHMENT A: KEY PERSONNEL OF CEE..................................................................................A‐ 1
ATTACHMENT B: LETTERS OF COMMITMENT
Minnesota Association of Community Rehabilitation Organizations.................................... B‐ 1
NICE/EnerChange................................................................................................................... B‐ 2
Minnesota Council of Nonprofits........................................................................................... B‐ 3
Center for Energy and Environment ...................................................................................... B‐ 4
ADDITIONAL ATTACHMENTS
Documentation of Financial Commitments
Exhibits A‐ E
A. APPLICANT INFORMATION
Application Category: Category 2 – Revolving Loan Programs
Applicant Name: Center for Energy and Environment
Applicant Type: Nonprofit organization organized under section 501(c)(3) of the Internal Revenue Code
Address:
212 3rd Avenue North, Suite 560
Minneapolis, MN 55401
Contact:
David King
Director, Financial Resources
Phone: (612) 335-5889
Fax: (612) 335-2650
E-mail: dking@mncee.org
Applicant Description/Mission:
The Center for Energy and Environment (CEE) is a nonprofit organization whose purpose is to promote
responsible and efficient use of natural and economic resources. CEE has provided energy,
environmental, and housing rehabilitation services on behalf of utilities, government agencies and
neighborhood organizations for more than twenty years.
CEE’s primary expertise is energy efficiency in residential structures and commercial-industrialinstitutional facilities. CEE performs technical research on energy-efficient technologies and
applications, designs and delivers energy-efficiency programs in all sectors, and operates several highly
productive lending programs. No organization in Minnesota finances more energy-efficiency
improvements than CEE. Since 1980, CEE has originated more than 20,000 loans and grants totaling
over $130 million for energy-efficiency and residential rehabilitation projects.
CEE has an annual budget of $12.0 million and 85 employees, including experts in engineering, technical
analysis, financing, and program design and delivery.
Program Name: Energy Savings Fund for Nonprofits
Total Program Cost: $600,000 (capitalization of revolving loan fund only; does not include development
and operation of revolving loan fund, marketing, technical services, and utility rebates)
Total Grant Amount Requested: $270,000
Sources of Matching Funds and In‐ Kind Contributions:
1. Center for Energy and Environment (capitalization of revolving loan fund, administration, loan
processing, marketing, and technical services)
2. Utilities (marketing, technical services and rebates)
3. NICE/EnerChange (marketing and technical services)
4. Minnesota Council of Nonprofits (education and promotion)
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Page 1
B. PROGRAM SUMMARY
Program Structure
The Energy Savings Fund for Nonprofits will be structured as a long-term revolving loan fund. Its purpose
is to provide loans for energy-efficiency improvements in facilities occupied by nonprofit entities
organized under section 501(c)(3) of the Internal Revenue Code.
In the beginning, available capital will be only $600,000, but this will be sufficient to prove the viability
and effectiveness of the program design. The Center for Energy and Environment (CEE) intends to
increase the lending capacity of the Energy Savings Fund over time by attracting “program-related
investments” (“PRIs”) from philanthropic foundations and other institutional investors.
CEE will initially capitalize the Energy Savings Fund with a deposit of $330,000 into a new bank account
established for Fund. Loans to nonprofit organizations and to owners of buildings occupied by nonprofit
organizations will be made from this account. The account will be replenished by grant payments from the
Office of Energy Security (OES), rebate payments from utilities, and loan payments from borrowers. In the
future, the investments of foundations and institutional investors will be deposited in the account of the
Energy Savings Fund and then loaned to eligible borrowers.
The structure of this revolving loan fund includes a loan loss reserve that is sufficient to cover loan losses
equal to 5% of payments due annually, which is consistent with program design guidelines recommended
by the U.S. Department of Energy. This loan loss reserve is essential for CEE’s investment in the Energy
Savings Fund, and it is a feature that will be necessary to leverage investments from foundations.
The Energy Savings Fund for Nonprofits will offer loans for the full cost of eligible energy-efficiency
improvements. The average amount of loans will be $10,000, and most loans will have terms of three
years. Initially, the rate of interest will be 0%, and there will be no fees whatsoever charged to
participating nonprofits. To create excitement and a positive sense of urgency, an extra financial
incentive will be offered to the first 24 or 48 participants – their first and last month’s payments will be
waived. The interest rate and other terms and conditions will be adjusted in the future depending on
market factors, demand for loans, and program performance. The terms of loan offerings also may be
subject to investment agreements with foundations that invest in the Energy Savings Fund.
The Energy Savings Fund will be designed to support at least ten annual lending cycles even if there are
no investments in the Fund after the initial capitalization. In the first fourteen months, CEE will make
about 48 loans so that the entire amount of grant and matching funds will be spent once before June 30,
2011. After the first year, CEE will originate about 15 loans per year until foundations and other
institutional investors provide more capital for lending.
The Energy Savings Fund for Nonprofits will be effectively marketed to nonprofit organizations through
multiple channels, but marketing expenses will not be charged to the Fund. Likewise, participating
nonprofits will be provided expert technical services at no cost to the Fund. This will be accomplished
by:
1. Integrating the Energy Savings Fund into utility-sponsored energy-efficiency programs (including
NICE/EnerChange and CEE’s One-Stop Efficiency Shop lighting program);
2. Marketing the Energy Savings Fund through associations of nonprofit organizations (such as the
Minnesota Council of Nonprofits); and
3. Engaging contractors statewide in promotion and program delivery.
Page 2
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Targeted Program Participants
Nonprofit organizations organized under Section 501(c)(3) of the Internal Revenue Code that own and
occupy facilities anywhere in Minnesota will be eligible program participants. In addition, nonprofit
organizations that lease their facilities will be targeted program participants, but the eligible borrowers
will be owners of the facilities leased by these nonprofit organizations.
In 2008, there were approximately 3,800 nonprofit employers in Minnesota, and they operated 5,600
employment locations (Source: Minnesota Council of Nonprofits). Not all of these nonprofit employers
are 501(c)(3) organizations – some are organized under other subsections of 501(c) – but 5,600
employment locations is a useful “order of magnitude” estimate of program targets. With its initial
capitalization, the Energy Savings Fund for Nonprofits could only serve a small fraction of the total
number of eligible participants and facilities.
Characteristics of the Nonprofit Sector
Minnesota’s nonprofit organizations provide a wide range of services – some promote aesthetics; some
save lives. Program areas of nonprofit organizations include:
Human services
Employment/jobs training
Food
Emergency services
Crime prevention
Culture/humanities
Youth development
Vocational rehabilitation
Housing
Legal advocacy
Sports and recreation
Animal protection
Education
Health care
Crisis intervention
Civil rights
Arts
Environment
The nonprofit sector is an important part of Minnesota’s economy. In 2008, one of every nine employees
in Minnesota worked for a nonprofit organization; nonprofit employers paid $12.6 billion in wages to
290,000 employees. About half of nonprofit employees are located in the Twin Cities metropolitan area;
half are located in Greater Minnesota. (Source: Minnesota Council of Nonprofits)
The Minnesota Council of Nonprofits reports the following numbers of nonprofit organizations by total
assets:
Total Assets
Number of Nonprofits
Under $1.0 million
5,116
$1.0 million to $10.0 million
1,396
More than $10.0 million
460
Total
6,972
Again, not all of these are 501(c)(3) organizations, and only about 3,800 of them have employment
locations (i.e., facilities that could be improved with financing from the Energy Savings Fund for
Nonprofits).
The Minnesota Council of Nonprofits (MCN) conducted a survey in late 2009 to assess the condition of
nonprofit organizations. MCN reports that nonprofits are under significant financial pressure:
“Nonprofits continued to experience an increase in demand for their services while facing declining
revenues.” Sixty-one percent of responding nonprofit organizations reported revenue losses in 2009.
Sixty-two percent expect an increase in demand for services in 2010, and 67% anticipate cash shortfalls
during this year. (“Nonprofit Current Conditions Report,” MCN, December 2009)
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Page 3
Projected Annual Number of Loans and Loan Volume
CEE expects to originate 45 loans in the first year of the Energy Savings Fund for Nonprofits. With
average loan amounts of $10,000, the total dollar volume in the first year will be $450,000. In subsequent
years, the average number of loans will be 15. Over the first ten years, CEE will make approximately 180
loans with a total dollar volume of $1,800,000.
Assuming that these loans will be coupled with utility rebates equal to 35% of total project costs, the total
dollar value of projects financed through the Energy Savings Fund for Nonprofits in the first year will be
about $692,000, and the total dollar value of projects over the first ten years will be about $2.8 million.
(These are minimum estimates based on only the initial capitalization of the Energy Savings Fund. If CEE
attracts foundation investments, then loan and project totals will be greater.)
CEE is confident that we will be able to achieve the first milestones of 48 loans and loan volume of
$480,000 in the first fourteen months (as necessary to use all grant and matching funds before June 30,
2011). In 2009, lighting retrofit projects were completed in about 100 facilities of nonprofit organizations
through CEE’s One-Stop Efficiency Shop lighting program. CEE financed 25 of these projects; the total
amount of loans to nonprofits was $292,000. With multiple marketing strategies and more generous
utility rebates, CEE believes demand for loans through the Energy Savings Fund for Nonprofits will
exceed availability of funds.
Program Timeline
If CEE receives a provisional notification of a grant award on or about March 12, 2010, CEE will
immediately redirect marketing and technical resources of the One-Stop Efficiency Shop lighting program
to nonprofit organizations in Xcel Energy’s service territory; and CEE will begin working with partners on
a high-visibility program launch for the Energy Savings Fund for Nonprofits. (CEE will not be paid fees
or reimbursements for any activities prior to the execution of a grant agreement.)
After the grant agreement is executed, the Energy Savings Fund for Nonprofits will operate continuously
for not less than ten years.
Key Program Personnel and Program Partners
CEE will administer the Energy Savings Fund for Nonprofits, originate all loans, and serve as the fiscal
agent for institutional investors. CEE’s Chief Financial Officer, Jennifer Amendt, and CEE’s Director of
Financial Resources, David King, will be responsible for administrative, financial and lending functions.
Kristen Funk, CEE’s One-Stop Program Manager, will be responsible for marketing and technical
services, including coordination with program partners. Ken Campbell, consultant to CEE, will be
involved in ongoing development of the Energy Savings Fund and solicitation of investments from
foundations and other institutional investors.
Program partners include:
Electric and natural-gas utilities (marketing, technical services and rebates)
NICE/EnerChange (marketing and technical services)
Minnesota Council of Nonprofits (education and promotion)
Contractors statewide (marketing and technical services)
Page 4
Energy Savings Fund for Nonprofits
Center for Energy and Environment
C. PROGRAM NARRATIVE
Goals of the Program
The Center for Energy and Environment (CEE) is a Minnesota nonprofit organization, and CEE knows
well the nonprofit sector in Minnesota. CEE’s work in this sector dates back to 1993 when the McKnight
Foundation commissioned CEE to thoroughly assess the energy program needs of Minnesota’s nonprofit
organizations. The short conclusion of this ambitious study is that nonprofit organizations did not have the
financial means to implement energy savings measures in their facilities; nonprofit organizations needed
access to “positive cash flow financing” for energy-efficiency projects. This need still exists today.
Over the years, CEE has provided technical services and financing to individual nonprofit organizations
on an ad hoc basis. Nonprofit organizations have been eligible to participate in various programs – the
One-Stop Efficiency Shop lighting program among them – but nonprofit organizations have not been the
primary target of any CEE programs. CEE now has an opportunity to serve the Minnesota nonprofit
sector more systematically and comprehensively. CEE will do this by building on its existing program
platforms of the One-Stop Efficiency Shop and CEE’s numerous financing programs; and CEE will do
this by partnering with NICE/EnerChange and the Minnesota Council of Nonprofits to effectively engage
nonprofit organizations in efforts to improve their energy efficiency.
CEE will establish the Energy Savings Fund for Nonprofits with a capital contribution of not less than
$330,000. A lengthy explanation of CEE’s purpose is not necessary. CEE will do this because CEE is a
nonprofit organization with a mission to promote energy efficiency.
The immediate goal of the Energy Savings Fund for Nonprofits will be to induce and assist nonprofit
organizations to complete energy-efficiency improvements that they otherwise would not. A broader goal
is to demonstrate that the Energy Savings Fund for Nonprofits is both needed and viable. Upon proving the
worth of the Energy Savings Fund with early success, CEE intends raise additional funds from
philanthropic foundations and institutional investors to increase the lending capacity and longevity of the
Energy Savings Fund. Preliminary discussions with representatives of foundations have been promising
– there is high interest, but foundations want to see a “proof of concept” before they commit funds.
CEE recognizes that this grant proposal will not be scored based on the possibility of attracting
foundation investments sometime in the future; this proposal will be scored based on the results that will
be achieved with committed resources. With only the initial capitalization of the Energy Savings Fund
for Nonprofits ($330,000 from CEE and $270,000 in grant funds), 180 energy-efficiency projects will be
completed at a total cost of $2.8 million; and these projects will generate lifetime cost-savings of more
than $17 million. In different terms, nonprofit organizations will realize energy cost savings of $64.42 for
every $1.00 of grant funds awarded to the Energy Savings Fund for Nonprofits. Additional measures of
impact are provided in Tables 1 and 2 on page 6.
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Page 5
Table 1.
Impacts of Energy Savings Fund for Nonprofits
Year 1
45
$
692,325
729 kW
2,842,176 kWh
48,316,997 kWh
$
255,796
$ 4,348,530
Number of Projects
Total Project Costs
kW Savings
Annual kWh Savings
Lifetime kWh Savings
Annual Savings @$.09/kWh
Lifetime Savings @$.09/kWh
Assumptions:
1. Average Project Costs: $15,385
2. Rebates: 35%
3. Cost/kW Savings: $950
Table 2.
Years 1 to 10
180
$ 2,769,300
2,915 kW
11,368,705 kWh
193,267,989 kWh
$ 1,023,183
$ 17,394,119
4. kWh Savings/kW: 3,900
5. Savings Lifetime: 17 years
Impacts of Grant Funds
Total Grant Funds
Project Costs/$1.00
kW Saved/$1,000
Annual kWh Savings/$1.00
Lifetime kWh Savings/$1.00
Annual Savings/$1.00
Lifetime Savings/$1.00
$
$
$
$
Year 1
270,000
2.56
2.70 kW
10.53 kWh
178.95 kWh
0.95
16.11
$
$
$
$
Years 1 to 10
270,000
10.26
10.80 kW
42.11 kWh
715.81 kWh
3.79
64.42
Eligibility Criteria
Eligible borrowers. There will be two groups of eligible borrowers:
1. Nonprofit 501(c)(3) organizations that own the buildings they occupy or use for program
purposes; and
2. Owners of buildings leased by nonprofit organizations.
Eligible facilities. Structures that will be eligible facilities for financed improvements are 1) depreciable
property; 2) wholly or partially enclosed within exterior walls, or within exterior and party walls, and a
roof, affording shelter to persons or property; and 3) used for business or program purposes by one or
more nonprofit organizations. A structure occupied by a nonprofit organization among multiple tenants
will be an eligible facility, but the financed energy-efficiency project in such a structure must yield direct
cost-saving benefits to the nonprofit organization.
Eligible projects. The following projects implemented in eligible facilities will be eligible:
Facility systems optimization (commissioning or re-commissioning);
Facility systems control improvements;
Lighting efficiency improvements;
Heating, ventilation and air conditioning system modifications;
Exterior envelope improvements; and
Motor and pump efficiency improvements;
Page 6
Energy Savings Fund for Nonprofits
Center for Energy and Environment
There will be two additional conditions related to project eligibility:
1. Energy-efficiency measures that are included in new construction or expansion of existing
structures will not be eligible projects.
2. Projects must have a simple payback that is no less than two years and no greater than ten years.
Loan Application and Review Process
As described in Section D of this proposal on page 15, CEE has established loan application and review
processes for numerous loan programs. These processes for current loan programs are audited three times
annually. The loan application and review process for the Energy Savings Fund for Nonprofits will be
essentially the same as the process already in place for financing projects through the One-Stop Efficiency
Shop lighting program, except that there will be additional steps necessary to meet any federal and state
requirements. For example, steps will be needed to ensure compliance with the Davis Bacon Act.
With sophisticated technologies and well-trained financing professionals, CEE will make the application
process as convenient and efficient for nonprofit organizations as possible. Currently, at the conclusion of
One-Stop audits, CEE lighting consultants explain the existing financing offer and can generate a loan
application with some information already loaded. CEE personnel will be able to do the same for
nonprofit organizations interested in borrowing from the Energy Savings Fund for Nonprofits; and CEE
will work with NICE/EnerChange so that facilitation of financing can be a valuable part of the
NICE/EnerChange service to nonprofits.
CEE also works continuously with an increasing number of contractors statewide to provide them
information and tools so that they can participate effectively and profitably in CEE’s programs.
Contractors will be readied to assist nonprofit organizations to apply for loans from the Energy Savings
Fund for Nonprofits without difficulties and negative surprises.
There will be two categories of eligible borrowers: 1) Nonprofit organizations that own properties they
occupy or use for program purposes; and 2) Owners of properties leased by nonprofit organizations for
occupancy or program use. The loan application and review process for the two categories will be
similar, but there will be two significant differences:
1. A useful credit report cannot be generated for most nonprofit organizations, but useful credit
reports can be generated for other property owners.
2. A personal guarantee probably cannot be obtained for a loan to a nonprofit organization, but other
property owners are sometimes willing to provide a personal guarantee.
For nonprofit organizations, the required documents for a loan application will be a completed application
form, tax returns and financial statements for the previous two years, a copy of the nonprofit’s “articles of
organization,” and a resolution of the Board of Directors acknowledging that the nonprofit will be incurring
debt and that this debt must be shown on the nonprofits’ tax returns and financial statements until it is
retired. Energy audit reports and initial project cost estimates will be obtained immediately and placed in
the application file; engineering studies (if needed), bid documents and executed project contracts will be
added to the application file as they delivered to CEE Financial Resources.
For businesses that are not nonprofit organizations, the required documents will be essentially the same as
for nonprofits, except that the articles of organization could be in several different forms, and the resolution
will likely be a letter from an owner or authorized officer. If CEE requires a personal
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Page 7
guarantee for a loan, then the guarantor will be required to provide personal financial statements and tax
returns of two previous years.
A CEE loan officer will work with each applicant to complete the loan application file. The CEE loan
officer will obtain credit references and a utility credit report (or account history) if possible, and the loan
officer will generate an Equifax credit report for a business or individual applicant.
The loan officer will perform an initial review of the application file. Of highest interest will be cash
flow. The loan officer will assess the stability and sufficiency of revenues relative to discretionary and
non-discretionary expenditures. (For most projects, the annual debt service will be less than the annual
energy cost savings. In these cases, the net effect on the borrowers’ cash flow will be positive.)
CEE will make an initial determination of creditworthiness and decide what security should be required (a
personal guarantee, mortgage, UCC filing, or none).
When the entire application file is complete, and CEE and the borrower have agreed to terms, then the
loan will be closed; but the borrower will not receive funds at closing. Upon project completion, the
borrower and contractor will sign a completion certificate, and the contractor will deliver lien waivers to
CEE in exchange for direct payment.
CEE will then transfer the account to Community Reinvestment Fund, USA, which has handled CEE’s
loan servicing for many years.
Credit Standards and Risk Management
It is noteworthy that CEE will contribute $330,000 to the Energy Savings Fund for Nonprofits. This is
ample incentive for CEE to safeguard the Fund through prudent and diligent risk management. That
said, most Minnesota nonprofit organizations have little credit history, and they do not have substantial
financial reserves. This is why a program like the Energy Savings Fund for Nonprofits is needed, and this
is why some loan losses are likely.
CEE will use underwriting standards that are appropriate for a reasonable and prudent lender whose
purpose is to operate a revolving loan fund to finance energy-efficiency projects in the facilities of
nonprofit organizations with the objectives of maximizing the number of nonprofits served, the number
and total dollar value of projects completed, the total quantity of energy saved, and the duration of the
revolving loan fund.
CEE will obtain adequate and appropriate security from borrowers and act diligently to protect the
interest of the Energy Savings Fund for Nonprofits through collection, foreclosure, or other recovery
actions on defaulted loans.
As explained in Section D under CEE’s “Administrative and Financial Capacities” (page 20), CEE’s audit
firm conducts a “loan audit” three times annually to ensure that loan underwriting, closing and servicing
procedures are being performed accurately, completely and in accordance with program rules. The
Energy Savings Fund for Nonprofits will be included in loan audits, and the results of these audits will be
available to the Office of Energy Security.
Page 8
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Loan Terms and Fees
Loan amounts:
$3,000 to $25,000 per borrower
Term: 12 to 60 months allowable; most loan terms will be 36 months
Interest rate on current balance: 0% (May be increased in future, depending on market
conditions and requirements of institutional investors)
Interest rate on delinquent balance: 15%
Additional inducement for first 24 or 48 loans: Waiver of first and last month payment
Origination fee: $0 charged to borrower
Servicing fees: $0 charged to borrower
Acceleration: The standard loan agreement will require that a loan be paid off upon sale or transfer of
any part of the property that is improved by a financed project. Also, the loan agreement will allow CEE,
at its sole discretion, to accelerate a delinquent loan and demand immediate payment of the entire
outstanding balance of principal and interest.
Prepayment: There will be no penalties or fees charged for prepayment of loans. In future years, it is
possible that cash-flow circumstances and pent-up program demand could justify offering a financial
incentive for borrowers to pay off their loans early.
Promotion, Marketing, and Technical Services
Merely establishing a loan program with below-market interest rates is not enough to induce customers to
make energy-efficiency improvements. This has been proven by idle loan funds across the country over
the past three decades. Successful loan programs are marketed and delivered as a component of a
comprehensive energy-efficiency program; but a comprehensive program – a program with marketing,
direct sales, technical assistance, financing and project follow-through – cannot be designed in the
financial structure of a revolving loan fund because program operating costs would quickly deplete the
fund balance.
There will be high demand for loans from the Energy Savings Fund for Nonprofits, and loans made will
be for cost-effective energy-efficiency projects, yet the Fund will incur no costs for promotion,
marketing, direct sales, technical assistance, project oversight and administration. This is possible
because the Energy Savings Fund for Nonprofits will be integrated into utility-sponsored energyefficiency programs as the financing component for nonprofit organizations, and into the operations of
CEE’s Financial Resources Department, which already processes 1,200 loans per year.
One‐ Stop Efficiency Shop Lighting Program
CEE’s One-Stop Efficiency Shop lighting program is a highly successful direct-impact program that has
been included in Xcel Energy’s CIP Plan since 2000. The One-Stop program offers free lighting audits,
premium utility incentives, low-interest (3.9%) financing, and standard program pricing to induce owners
of small and medium-sized businesses to install energy-efficient lighting systems. On a pilot basis in
2010, CEE is expanding the offering of the One-Stop program to include other measures in addition to
efficient lighting.
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Page 9
One-Stop is a mature, high-volume program – in 2010, CEE expects the One-Stop program to produce
3,600 audits and 1,200 completed lighting retrofits. Over the past ten years, CEE has improved the
design of this program and developed all of the resources necessary to achieve high participation rates and
high energy savings.
Nonprofit organizations with facilities in Xcel Energy’s service territory have always been eligible to
participate in the One-Stop program, but CEE has never targeted the nonprofit sector for intensive
marketing. Nevertheless, in 2009, the One-Stop program completed lighting retrofits in 107 facilities of
nonprofit organizations, and CEE provided or arranged financing for 25 of these projects.
In Xcel Energy’s service territory, the Energy Savings Fund for Nonprofits will be offered to nonprofit
organizations through CEE’s One-Stop Efficiency Shop lighting program at no charge to the Energy
Savings Fund. CEE lighting consultants and lighting contractors will present the Energy Savings Fund as
the financing component of One-Stop that is exclusively for nonprofit organizations. Being able to
implement the Energy Savings Fund for Nonprofits on the One-Stop program platform is a tremendous
advantage – at no cost to the Fund, sufficient demand is virtually guaranteed.
NICE/EnerChange
NICE/EnerChange will promote and market the Energy Savings Fund for Nonprofits at no charge to the
Energy Savings Fund. The program of NICE/EnerChange was approved for inclusion in the 2010 – 2012
CIP plans of Xcel Energy and CenterPoint Energy, and NICE/EnerChange submitted a progress report and
work plan to the Office of Energy Security on January 6, 2010. NICE/EnerChange provided updates on
this work plan to CEE in conversations during the week of February 1, 2010.
NICE/EnerChange is focusing on energy-saving opportunities in the facilities of nonprofit organizations
that are located in the service territories of Xcel Energy and CenterPoint Energy and that are funded by
the United Way. The United Way funds approximately 200 nonprofit agencies in Minnesota.
NICE/EnerChange is constructing profiles of these agencies and their facilities, and has already identified
about 50 nonprofit organizations whose facilities are likely to have substantial energy-savings potential. To
date, NICE/EnerChange has performed utility bill analyses and on-site inspections in about 20
facilities to gather information about their energy use and energy-savings opportunities. The next stage of
the NICE/EnerChange process is a presentation to senior management to explain findings,
recommendations and referrals. Thereafter, NICE/EnerChange will follow up on recommended actions,
provide needed support, and track measures implemented and their energy-use impact.
NICE/EnerChange has scheduled a high-profile, special informational and promotional event on June 30,
2010. By then, NICE/EnerChange will have completed its process through the presentation of findings
and recommendations to senior management for at least 40 nonprofit facilities. On that date,
NICE/EnerChange will publicly launch its entire program, including its website which will uniquely
feature flowing data on participants’ energy use along with an expanding number of case studies.
By June 30, 2011, NICE/EnerChange will have completed its process in about 300 buildings. Many
recommendations will be no-cost and low-cost measures; but where recommendations are for lighting
retrofits, boiler replacements, and other capital investments, NICE/EnerChange will refer the nonprofit
organization to the Energy Savings Fund for Nonprofits.
Page 10
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Minnesota Council of Nonprofits
The Minnesota Council of Nonprofits (MCN) offers a valuable endorsement of the Energy Savings Fund
for Nonprofits, and MCN brings direct access to its membership of 2,000 Minnesota nonprofit
organizations in Minnesota. Managers and directors of nonprofit organizations trust MCN, and respond
positively to initiatives supported by MCN. The involvement of MCN will generate inquiries and
requests for energy-efficiency services from nonprofits statewide that otherwise would not be reached,
and the Energy Savings Fund will incur no charges for this broad capacity to educate and motivate
organizations in all geographic regions and all nonprofit program areas.
MCN is a highly professionalized nonprofit organization with experienced personnel responsible for
marketing, communications, member services, and information systems. Upon provisional notification of
a grant award, CEE will work with these professional at MCN to develop and implement a one-year plan to
educate MCN members about energy-efficiency offerings (including, but not only, the Energy Savings
Fund for Nonprofits), and to encourage MCN members to take action. This plan may include:
MCN website content
Direct mail and e-mail communications
Articles in the “Nonprofit News” (a quarterly newsletter)
“Network lunches” with groups of interested nonprofit managers
Workshops and seminars around the State
Presentations at conferences
MCN has three chapters in Greater Minnesota – the Twin Ports, Itasca and South Central chapters. CEE
will work through these chapters to ensure that their members have access to the Energy Savings Fund for
Nonprofits.
In addition, MCN works with other associations of nonprofits which MCN will help CEE access. (An
example of such an organization is the Minnesota Association of Community Rehabilitation Organizations.
Attachment B-1 is a letter from the Chair of this association, in which he indicates that the Energy Savings
Fund could serve well the 32 members of his association whose old light-industrial buildings are in need of
energy-efficiency improvements.)
Engineering Companies and Contractors
CEE has access to engineering companies and contractors statewide. In the service territory of Xcel
Energy, CEE has worked closely with numerous lighting contractors for ten years to implement the OneStop Efficiency Shop lighting program. In Greater Minnesota, CEE’s working relationships with
engineering companies and contractors are expanding with implementation of the Public Buildings
Enhanced Energy Efficiency Program (PBEEEP).
Engineering companies and contractors are effective at marketing energy-efficiency programs to
customers. CEE will invite engineers and contractors to informational meetings about the Energy Savings
Fund for Nonprofits, and CEE will produce promotional materials for distribution to these companies and
their nonprofit customers.
Projected Administrative, Marketing and Servicing Costs
The Energy Savings Fund for Nonprofits is an ambitious undertaking which could only be accomplished
economically by an organization that has existing capacities to provide for the marketing, technical
services, loan processing and administration. CEE has such capacities.
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Page 11
CEE will contribute $330,000 as a capital investment in the Energy Savings Fund for Nonprofits. For each
loan originated, CEE will take only an origination and servicing fee of $500. CEE will contract with the
Community Reinvestment Fund, USA (CRF) for loan servicing. CRF currently charges $266 for a threeyear loan with monthly payments. Thus, CEE’s origination fee will be $234 per loan, which is below a
break-even price. These fees for the period of May 3, 2010 to June 30, 2011 are shown in the budget table
below (Table 3).
Table 3.
Administrative and Delivery Budget May 3, 2010 to June 30, 2011
Category
Labor
Equipment
Rent & Utilities
Origination, Servicing and Legal Fees
Supplies
Travel
Other
Sub‐ Totals
Total by Task
Task 1
Grant
Match
Project Totals
Grant
Match
$10,800 $13,200 $10,800
$13,200
$10,800 $13,200 $10,800 $13,200
$24,000
$24,000
CEE is committing its investment of $330,000 for at least ten years, unless projected losses exceed 40%.
CEE will withdraw a fee in lieu of interest payments of $12,000 per year. This equates to an interest rate
of 3.6%, which is approximately the current yield on ten-year U.S. Treasury bonds. (Considering CEE’s
risk of losing a significant portion of its investment in the Energy Savings Fund for Nonprofits, 3.6% is an
inferior return on investment.) CEE will receive no other fees, reimbursements or compensation.
Even though CEE has existing capacities to organize and operate the Energy Savings Fund for
Nonprofits, this undertaking will require a considerable amount of staff time. During the period of May
3, 2010 to June 30, 2011, it is likely that the value of CEE resources dedicated to the Energy Savings
Fund will exceed $100,000. CEE staff and consultants will perform the following tasks:
Administration, program management, accounting and auditing
Development of program materials
Coordination with the One-Stop Efficiency Shop lighting program
Coordination with NICE/EnerChange and the Minnesota Council for Nonprofits
Technical services and project oversight
Loan processing
Program expansion and fundraising
Again, CEE will incur these costs and the risk of losing its capital investment because developing the
Energy Savings Fund for Nonprofits advances CEE’s mission.
Financial Projection
On page 14 is Table 4, a simplified financial projection for the Energy Savings Fund for Nonprofits. This
financial projection presents a minimum-performance scenario; it is assumed in this scenario that CEE will
be unable to attract any additional capital to the Energy Savings Fund. This, however, is a
pessimistic assumption. CEE intends to increase the capital base of the Energy Savings Fund for
Nonprofits with program-related investments (PRIs) from philanthropic foundations and other
institutional investors.
Page 12
Energy Savings Fund for Nonprofits
Center for Energy and Environment
At this time, a financial projection for the Energy Savings Fund based on significant capital contributions
from foundations and other institutional investors would be too speculative to be useful. Representatives
of foundations and one significant corporate donor have already expressed interest in making investments
in a loan fund like the Energy Savings Fund for Nonprofits, but we do not know yet what the duration of
such investments would be or what return on investment these investors would require. For this proposal,
it suffices to say that CEE’s fund-raising goal will be more than ten-times the original capitalization.
Utility rebates are expected to cover approximately 35% of total project costs, but utility rebates are not
shown in the financial projection because they will not ordinarily flow through the Energy Savings Fund.
(The estimate of 35% assumes that most projects will be lighting retrofits, which in Xcel Energy’s service
territory are now eligible for rebates in excess of 40%.)
The simplified financial projection shows the following:
1. The initial capitalization of the Energy Savings Fund will be $600,000 ($270,000 in grant funds
and $330,000 from CEE).
2. In the first year, 45 loans in the amount of $10,000 each will be made.
3. In years two through ten, 15 loans per year of $10,000 will be made.
4. Borrowers will not pay origination/servicing fees.
5. All loan terms will be three years.
6. The rate of interest on loans will be 0%.
7. CEE will be paid one-time origination and servicing fees of $500 per loan.
8. CEE will be paid an annual fee in lieu of interest of $12,000 (about 3.6%).
9. Loan losses will equal 5% of amounts due in each year; a sufficient loan loss reserve will be
funded in the first year to cover these loan losses.
10. If loan losses of 5% occur, CEE will lose 27% of its initial capital investment.
11. If no loan losses occur, CEE will recover 100% of its initial capital investment.
The attached financial projection is merely an illustration of what might occur over the next twelve years,
but it is not a prediction. As stated previously, CEE expects to increase the size, activity and longevity of
the Energy Savings Fund for Nonprofits with capital contributions from foundations and institutional
investors. Also, market conditions, loan demand, and investor requirements could justify modification of
the loan offering in the future.
It is also possible, but unlikely, that loan repayment performance could be significantly worse than shown
in the financial illustration. In the event that overall loan performance is unsatisfactory, CEE will tighten
underwriting standards and security requirements, and CEE will solicit third-party coverage for loan
losses in the form of insurance or contributions to the loan loss reserve. CEE’s remedy of last resort will
be to stop originating new loans if payment performance to date indicates that CEE would otherwise lose
more than 40% of its initial investment.
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Page 13
"U
Ill
(C
(I)
....
Table 4.
Energy Savings Fund fo1r Nonprofits- FinancialProjection
"""
Beginning Balance
Year1
Year2
Year3
Year4
YearS
Year6
Year7
YearS
Year9
600,000
159,575
185,004
247,223
226,945
206,274
185,212
163,757
141,911
Year 10
119
,673
Year 11
97,043
Year 12
185 126
6,722
6,330
5,938
5,546
4,762
4,370
5,083
6,4!95
Total
Revenues
Orig./Serv.Fees (Customer)
Interest on Fund Balance
Round 1: Principal& Interest
3,450
4.929
6,094
137,500
150,000
137,500
50,000
50,000
Round 2: Principal& Interest
Round 3: Principal& Interest
50,000
Round 4: Principal& Interest
5.154
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
Round 5: Principal& Interest
Round 6: Principal& Interest
50,000
Round 7: Principal& Interest
Round 8: Principal& Interest
50,000
50,000
50,000
50,000
50,000
50,000
50,000
50,000
Round 9: Principal& Interest
Round 10: Prn
i cipal& Interest
Principal & Interest Due
5% Losses
137,500
(6,875)
64
,871
200,000
237,500
150,000
150,000
150,000
(10,000)
(11875)
(7,500)
(7,500)
(7
,500)
150,000
(7,500)
150,000
(7,500)
150,000
(7,500)
50,000
50
,000
50,000
50,000
150,000
100,000
50,000
1,775,000
(7,500)
(5,000)
(2,500)
(88
,750)
1,751 121
Revenues
134,075
194,929
231,719
149,222
148,830
148,438
148,046
147,654
147,262
146,870
100,083
53
,995
TotalFunds Available
734,075
354,504
416,723
396,445
375,n4
354,712
333,257
311,411
289,173
266
,543
197,126
239 121
Expenditures
450,000
150,000
150,000
150,000
150,000
150,000
150,000
150,000
150,000
150,000
each) Orig./Serv.Fees to
22,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
CEE
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
12,000
Loan Funding ($10,000
CEE Feein Lieu of Interest (3.6%)
Transfer to Loan Loss Reserve
90,000
-
-
-
-
-
-
-
1,800
,000
90
,000
12,000
-
574,500
169,500
169,500
169,500
169,500
169,500
169,500
169,500
169,500
169,500
12,000
159,575
185,004
247,223
226,945
206,274
185,212
163,757
141,911
119,673
97,043
185,126
132,000
-
TotalExpenditures
::I (J)
.........
!!!
Q'fi?
m:S
iil..5"
10"'
'<"ll
a
mO'
Ill..:::
a_
Loan Loss Reserve Fund
90,000
-
-
-
-
-
Deposits
(6,875)
(10,000)
-
(11875)
-
(7,500)
(7,500)
(7,500)
(7,500)
(7,500)
Accrued Losses
83,125
73,125
61,250
53,750
46,250
38,750
31,250
23,750
Number of Loans
45
15
15
15
15
15
15
15
CEE's lnvestment Recovery with 5% Loan Losses (Equa s Year 12 Year-End Balance Plus Year 12 Loan Loss Reserve Balance)
: S.
CEE Maximum Investment Recoverv with No Losses (Equa s Year 12 Year-End Balance Plus $90,000
ag
3
.... c..,
239
,121
(7,500)
16,250
-
-
-
90
,000
(7,500)
(5,000)
(2,333)
(88,583)
8,750
3,750
1,417
1 417
Loan Loss Reserve Balance
::I ....
<
239,121
Year-End Balance
15
15
180
D.1 WORK PLAN, TASKS AND MILESTONES
Through their various CIP programs, utilities statewide will provide technical services and rebates to
nonprofit organizations, and these nonprofit organizations will finance their projects through the Energy
Savings Fund for Nonprofits; but utilities’ CIP programs (including the One-Stop program and
NICE/EnerChange) have work plans and budgets that are independent of the work plan and financial
projection for the Energy Savings Fund for Nonprofits. Therefore, the work plans of CIP programs are
not presented in this proposal.
CEE will contribute $330,000 to the Energy Savings Fund for Nonprofits by depositing this amount in a
new account established for the Energy Savings Fund. Grant funds of $270,000 will be invoiced and used
only to replenish capital in the Energy Savings Fund for Nonprofits.
CEE will undertake a work plan to develop and operate the Energy Savings Fund for Nonprofits, but CEE
already runs numerous loan programs and processes about 1,200 loans per year. Thus, the Energy Savings
Fund does not require development of entirely new operating systems; and CEE will not charge the
Energy Savings Fund for development and operational tasks other than to take a one-time fee of $500 per
loan for origination and servicing.
Program development and coordination tasks will be most intensive in the first few months, and these
tasks will require a considerable time commitment of CEE’s managers and program directors; but
development and coordination activities will be on-going for the duration of the Energy Savings Fund as
the program is expanded and modified. Thus, there are not completion dates for these tasks.
Eight tasks are shown on the timeline presented on page 16. They are:
1.
2.
3.
4.
5.
6.
7.
8.
Administration, program management, accounting, auditing and reporting.
Development of program materials.
Coordination with the One-Stop Efficiency Shop program.
Coordination with NICE/EnerChange.
Coordination with Minnesota Council of Nonprofits and other associations.
Coordination with utilities and contractors statewide.
Program expansion and fundraising.
Loan processing.
CEE will begin all of these tasks immediately upon receiving a provisional notification of a grant award,
and CEE will be ready to make first loans to nonprofit organizations on the effective date of the grant
contract.
The deliverables of the Energy Savings Fund for Nonprofits will be loans, and the milestones will be
measures of loan production. As of June 30, 2011, CEE will have operated the Energy Savings Fund for
about 14 months (all of Year 1 and part of Year 2 in the financial projection on page 14). By June 30,
2011, CEE will have closed 48 loans and will have completed an initial use of $270,000 in grant funds
and $330,000 in CEE match funds (plus about $258,461 in utility rebates).
The financial projection on page 14 indicates that 180 loans totaling $1.8 million will be closed by the
end of Year 10. This is based on loan production of 15 loans per year in amounts of $10,000 each for
Years 2 through 10. Again, this is a minimum performance expectation; CEE intends to raise additional
funds for the Energy Savings Fund for Nonprofits to increase its lending capacity and longevity.
Nevertheless, these minimum milestones are indicated on the timeline below.
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Page 15
'5!......
0)
Timeline and Milestones for the Energy Savings Fund for Nonprofits
Tasks
20 10
2011
Years 2012-2020
1. Administration, mgmt., accounting, reporting
2. Development of program materials
3. Coord. with One-Stop program
4. Coord. with NICE/EnergChange
5. Coord. with MCN and other assoc.
6. Coord. with utilities and contractors
7. Program expansion and fundraising
8. Loan processing
Milestones
Date
Number of Loans
Amount of Loans
Total Number of Loans
Total Amount of Loans
a
!!l
if
·
(I)IQ
....
(ij
Ill
c:
[5.
g-e
=g-,
3/12 5 3
(
+----
5/2
6/30
48
$480,000
)
)
132
$1,320,000
180
$1,800,000
D.2 PROJECT TEAM AND PARTNERS
Center for Energy and Environment
The Center for Energy and Environment (CEE) is uniquely qualified to design, operate and administer the
Energy Savings Fund for Nonprofits. CEE is an independent, nonprofit 501(c)(3) organization that works
to promote the responsible and efficient use of natural and economic resources. CEE accomplishes this
mission through program development and delivery, technical and market research, testing and
evaluation, and public policy initiatives. CEE has provided energy, environmental and building
rehabilitation services on behalf of utilities, public agencies, and neighborhood organizations for over
twenty years. CEE has 85 staff members, including finance professionals, marketing and community
outreach specialists, technical sales personnel, construction managers, certified energy auditors,
engineers, technicians, statisticians, computer programmers, and architects.
CEE’s Financing Programs
No organization in Minnesota originates more loans for energy-efficiency improvements than CEE.
Since 1989, CEE has worked cooperatively with various agencies to develop innovative financing
products that address unmet needs and that complement offerings of utilities, government agencies and
private institutions. CEE has originated more than 20,000 loans and grants totaling over $130 million.
CEE’s variety of financing structures includes revolving loan pools, participations, interest rate buydowns, loan deferrals, forgivable loans, and grants. CEE has delivered financing programs for energyefficiency and rehabilitation improvements in partnership with the following organizations:
Center Point Energy
Xcel Energy
US Department of Energy
Minnesota Department of Commerce
Minnesota Housing Finance Agency
City of Minneapolis
City of St. Paul
Bank of New England
US Bank, Minneapolis
Private Bank Minnesota
Community Reinvestment Fund, Inc.
More than 60 local governments and community development organizations
Five of CEE’s current financing programs are discussed below:
Minnesota Department of Commerce Energy Loans
Since 1993, CEE has operated a revolving loan program with funding from the Minnesota Department of
Commerce. The Rental Energy and Home Energy loan programs offer low-interest loans of up to
$10,000 for energy-related improvements to owner-occupied homes and rental housing. To date, CEE
has financed more than 1,200 loans resulting in over $9.5 million in energy-related improvements to
residential properties.
Minnesota Housing Finance Agency (MHFA) Programs
CEE has been an approved lender of MHFA programs for more than 20 years. For the past several years,
CEE has been the top lender in the state for MHFA home and rental housing improvement products.
Annually, CEE originates in excess of 650 MHFA home improvement loans and 50 rental rehabilitation
loans.
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Page 17
Municipal and EDA Financing Programs
CEE administers financing programs for 25 municipalities and economic development authorities in the
Twin Cities metropolitan area. Each program has its own design – eligible properties, loan and grant
offerings, and delivery systems vary. Through these programs to date, CEE has originated almost 5,000
loans and grants to property owners to fund over $40 million worth of building improvements.
Minneapolis Neighborhood Revitalization Program
In the past twenty years, CEE has operated separate and customized financing programs for 35
Minneapolis neighborhoods through the Neighborhood Revitalization Program (NRP). CEE’s financial
services for these neighborhoods include loan/grant program development, marketing, loan and grant
origination, and post-installation inspections. To date, CEE has originated more than $21 million in
NRP-funded loans and grants, leveraging more than an additional $60 million.
Energy Efficiency Business Loan and Grant Program – City of Minneapolis
The City of Minneapolis has contracted with CEE to deliver the Energy Efficiency Business Loan and
Grant Program. This new program, which is funded with EECBG funds, offers technical services and
financing to Minneapolis businesses for energy-efficiency improvements. CEE will assist business
owners to identify and analyze energy-efficiency measures, finance projects with loan and grant
packages, and ensure satisfactory completion of energy-efficiency projects.
CEE’s Engineering, Technical Services and Program Delivery
CEE’s Research and Engineering Department conducts engineering research and field studies of energyrelated technologies and applications. CEE’s research staff also designs and directs market research
studies of populations including energy consumers, manufacturers, distributors, and contractors. For
example, in 1993, CEE conducted a comprehensive market research study of the energy program needs of
Minnesota’s nonprofit sector.
CEE is nationally recognized as a leading energy-efficiency research organization and has received
numerous awards. CEE has published over 90 technical papers on building performance and mechanical
systems in archival journals, and has refereed conference proceedings.
In addition to engineers and technical personnel who work primarily on engineering research projects,
CEE also has six project engineers and highly skilled technicians whose regular responsibilities include
commissioning, re-commissioning, and performing comprehensive facility assessments in commercial
and institutional buildings. All personnel of CEE’s Research and Engineering Department will be
available to confer on technical matters related to projects proposed for financing through the Energy
Savings Fund for Nonprofits.
CEE already delivers energy-efficiency services to nonprofit organizations with a program-delivery staff
that includes engineers, facility consultants, lighting consultants, construction managers, and indoor air
quality technicians. These program delivery personnel will generate leads for the Energy Savings Fund
for Nonprofits when they are working in facilities occupied by nonprofit organizations, and they will be
available to provide technical analysis and advice on projects proposed for financing.
One‐ Stop Efficiency Shop Lighting Program
The Energy Savings Fund for Nonprofits will be integrated with CEE’s One-Stop Efficiency Shop lighting
program, which CEE has successfully delivered for Xcel Energy since 2000. The One-Stop program is
designed to save energy through the installation of energy-efficient lighting retrofits, but CEE is now
conducting a pilot program to offer measures in addition to lighting improvements.
Page 18
Energy Savings Fund for Nonprofits
Center for Energy and Environment
The One-Stop program addresses barriers to implementation faced by owners and managers of small and
mid-size business organizations: limited financial resources and time, limited knowledge of lighting
products, and uncertainty about contractor selection and contract terms and pricing. (Nonprofit
organizations generally face these same barriers. Nonprofit organizations have participated in the OneStop Efficiency Shop program, but not in large numbers for two reasons: 1) Nonprofits have not been a
primary marketing target before; and 2) Many – probably most – nonprofits do not have sufficient
financial resources or conventional borrowing capacity to make capital improvements in their facilities.)
The One-Stop Efficiency Shop features:
Intensive marketing to bring the service to the customer;
Objective recommendations backed by the credibility of Xcel Energy;
simple, one-stop service that minimizes customer time requirements;
computerized audit/data communication and reporting system that generates all site-specific
paperwork; and
Substantial incentives combined with convenient and attractive financing.
To date 4,510 businesses have completed lighting retrofit projects through the One-Stop program. These
projects have resulted in a reduction of 51 MW of demand and $13,415,200 in annual savings for
participants. These production statistics indicate why the One-Stop platform is ideal for delivering loans
to nonprofit organizations. By making the Energy Savings Fund for Nonprofits the financing component
for nonprofits that participate in the One-Stop program, nonprofit participation in the One-Stop program
will increase, and there will be high demand for loans through the Energy Savings Fund to finance costeffective energy-efficiency projects.
Sound Insulation Project
CEE also administers the Sound Insulation Program for the Metropolitan Airports Commission. Through
this program, CEE has acoustically modified more than 8,000 homes in communities around the airport
since 1992. Of relevance to this proposal for a grant of ARRA funds is that the Sound Insulation Program
is federally funded, and CEE has effectively complied with the Davis Bacon Act and all federal reporting
and audit requirements over the past 18 years.
CEE’s Administrative and Financial Capacities
CEE is fully capable of administering the Energy Savings Fund for Nonprofits in accordance with the
highest standards of financial integrity. As an organization with an annual budget of more than $12 million
and more than 50 concurrent projects at any given time, CEE has developed sophisticated systems for all
business functions, including project management, financial controls, accounting, and reporting. Also, CEE
has sufficient financial resources to handle the cash flow requirements of numerous programs and projects
simultaneously.
Financial Management
CEE’s accounts are maintained in accordance with the principles of fund accounting. CEE has a
sophisticated and complex chart of accounts and over 40 bank accounts which allow accurate segregation
of funds in compliance with federal and other program-specific requirements. CEE is able to manage
numerous programs without co-mingling funds, and is able to monitor and report on program activity
with current and accurate financial information.
Managerial accounting functions are provided using a custom-designed project management database.
The project management system tracks both budgeted and actual revenues and expenses for each
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Page 19
individual project. All employee hours charged to projects are documented on employee time sheets and
entered in the database using project codes which allocate hours to individual projects or to budget
segments as necessary. Managers routinely receive and review reports on the status of projects for which
they are responsible.
CEE’s entire set of financial statements is fully computerized. Expenses and revenues are tracked by
project using cost stations within the accounting system on an accrual basis. The system enables
management to relate financial data to performance data and to compare actual revenue and expenses to
budgeted amounts for any accounting period. The Chief Financial Officer, the Director of Operations, the
President and CEE’s Board of Directors regularly review financial statements and project performance.
Division of Financial Functions
CEE has established divisions of responsibility for all financial functions, including disbursement of
funds, receipt of funds, and reconciliation of accounts. This division provides appropriate internal
control, protection of assets, financial accountability and overall agency oversight. Additionally, a
Fidelity Bond with a $500,000 limit covers all CEE employees.
Independent Audit
Annual audits of CEE at the organizational level are performed by the Certified Public Accountants of
LarsonAllen LLP according to generally accepted auditing standards. The review includes a include
examination and testing of evidence supporting the amounts and disclosures in the financial statements.
These audits have resulted in an unqualified opinion every year.
Independent Audits of Loan Programs
In addition to the organizational audit, LarsonAllen LLP conducts a special “loan audit” three times
annually. This review includes analysis of a random selection of loan files to determine the following:
Eligibility of borrower and property
Timeliness of credit report
Debt ratio or positive cash flow accurately calculated and documented
Loan rate and term consistent with established parameters
Loan value to equity ratio accurately calculated and documented
Post-installation inspection documented
Reconciliation of disbursements to file, database, and general ledger
Reconciliation of receipts to billing invoice, deposit of funds and general ledger
These frequent loan audits provide comprehensive and timely assessments of the loan process, file and
database documentation, contract compliance and the funds disbursement process.
Single Audit of Federal Funds
LarsonAllen LLP also audits and reports on CEE’s schedule of federal awards. This audit is conducted in
accordance with:
Generally accepted auditing standards;
Government Auditing Standards, issued by the Comptroller General of the United States; and
Office of Management and Budget (OMB) Circular A-133, Audits of Institutions of Higher
Education and other Nonprofit Institutions.
Page 20
Energy Savings Fund for Nonprofits
Center for Energy and Environment
These standards require that an audit obtain reasonable assurance about whether the financial statements
are free of material misstatements. This audit includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation and compliance with Federal requirements.
Segregation of Federal Funds
Projects funded with Federal funds are strictly segregated in the accounting system through the
assignment of project and account codes for each federal project. In addition CEE establishes separate
interest bearing bank accounts for any Federal funds advanced or held in trust.
CEE’s Information Technologies
CEE’s Information Technology staff has extensive experience developing software solutions to support
our programs. CEE’s software developers have designed sophisticated database applications using
desktop software, as well as client/server databases. CEE’s databases are designed for ease of data entry,
tracking, and reporting.
CEE’s Financial Resources Department currently uses a robust database system to track loans for CEE’s
numerous financing programs, which generates detailed and summary information in highly functional
formats. CEE will be able to produce reports on the Energy Savings Fund for Nonprofits that fully satisfy
state and federal information needs.
CEE uses ArcView geographical information system (GIS) software to track loans and other program
activities. When CEE implements the Energy Savings Fund for Nonprofits, this ability to analyze
program data geographically will be useful for program monitoring and reporting, and also for
development and evaluation of marketing strategies.
CEE’s Financial Resources Department also uses advanced technology solutions to process loans more
efficiently and accurately. CEE has developed its own custom loan documents generator, which it will use
to produce loan documents for the Energy Savings Fund for Nonprofits.
National Initiative by Consumers of Energy (NICE)
The National Initiative by Consumers of Energy (NICE) is a Minnesota nonprofit entity organized under
section 501(c)(3) of the Internal Revenue Code. “EnerChange” is a program of NICE, which was
approved by the Office of Energy Security for inclusion in the 2010-2012 CIP plans of Xcel Energy and
CenterPoint Energy. EnerChange is designed to assist nonprofit organizations in Minnesota to achieve
energy efficiency. This will be accomplished through promotion, marketing, facility evaluations,
technical assistance, and referrals to sources of technical services, rebates and financing.
For the Energy Saving Fund for Nonprofits, NICE’s EnerChange program will serve as the liaison to the
United Way and to the 200 nonprofit agencies in Minnesota funded by the United Way. The
NICE/EnerChange program has been endorsed by the United Way’s Council of Agency Executives; and
NICE has already surveyed a number of agencies funded by the United Way, analyzed utility bills,
conducted site reviews of nonprofits’ buildings, and made referrals for energy-efficiency projects.
NICE/EnerChange intends to promote and facilitate energy-efficiency work in 300 nonprofit buildings
before June 30, 2011, and NICE/EnerChange will offer the Energy Savings Fund for Nonprofits to
officers and managers in all of these buildings.
NICE/EnerChange will also introduce the Energy Savings Fund to nonprofit organizations through “MAP
for Nonprofits.” MAP for Nonprofits provides management consulting and services to more than 600
Minnesota nonprofit organizations. MAP staff offers expertise in finance and accounting, board
Energy Savings Fund for Nonprofits
Center for Energy and Environment
Page 21
recruitment and development, business planning, marketing, organizational development, strategic
planning, technology and other areas. By educating MAP’s consultants and service staff about energyefficiency offerings, including the Energy Savings Fund for Nonprofits, NICE/EnerChange will create an
opportunity to reach 600 Minnesota nonprofit organizations before June 30, 2011.
Attachment B-2 is a letter from the Executive Director of NICE/EnerChange in which he commits
NICE/EnerChange to deliver the Energy Savings Fund for Nonprofits in partnership with CEE.
Minnesota Council of Nonprofits
The mission of the Minnesota Council of Nonprofits (MCN) is to inform, promote, connect and
strengthen individual nonprofits and the nonprofit sector. MCN is a statewide association of more than
2,000 nonprofit organizations. Nearly all of MCN’s members are organized under Section 501(c)(3) of
the Internal Revenue Code.
As explained in a letter from Jon Pratt, Executive Director of the Minnesota Council of Nonprofits, MCN
maintains an informational website, publishes resource documents, and holds workshops and other events
for its members. Mr. Pratt commits that “in partnership with the Center for Energy and Environment
(CEE), MCN will use these capabilities to promote the Energy Savings Fund for Nonprofits to our 2,000
members.” (This letter is Attachment B-3.)
Page 22
Energy Savings Fund for Nonprofits
Center for Energy and Environment
ATTACHMENT A: KEY PERSONNEL OF CEE
KEY PERSONNEL OF CEE
The Center for Energy and Environment (CEE) has an experienced staff of administrative, finance,
engineering and program-delivery professionals. The Energy Saving Fund for Nonprofits will be
managed and operated by the following staff members:
David King, Director, CEE Financial Resources
Mr. King is the Director of CEE Financial Resources, the community development and financing arm of
CEE. Mr. King has extensive experience with the design and implementation of a wide array of
successful programs utilizing a variety of funding sources. Mr. King has overseen the growth and
development of CEE loan programs from a single loan program to over 150 program offerings resulting
in 1,200 loans annually. Mr. King has been with CEE for 22 years.
Mr. King works with Minnesota cities to design and deliver innovative financing tools to address the needs
of their commercial buildings, public facilities, and housing stock. Mr. King analyzes the unique needs of
target populations for financing programs, and structures financing packages accordingly. Under Mr.
King’s direction, CEE currently delivers residential and commercial financing programs to 35
Minneapolis neighborhoods and 25 suburban communities. Additionally, CEE originates commercial
loans for Xcel Energy’s One-Stop Efficiency Shop lighting program. To date, CEE has originated more
than 200 loans for lighting projects, resulting in over $1.25 million in project investments.
Jim Hasnik, Senior Loan Officer
Mr. Hasnik is the senior loan officer for CEE; he joined CEE in 1994. Mr. Hasnik is responsible for loan
underwriting and administering commercial and residential financing programs. Mr. Hasnik is the lead
loan officer for the Xcel Energy One-Stop Efficiency Shop lighting program. Mr. Hasnik also has
extensive experience with government-funded loan programs, including CDBG, MHFA, and programs
funded by municipalities and economic development authorities. Mr. Hasnik has a B.S. in Business
Administration from the State University of New York at Oswego.
Christina Lussio, Loan Services Coordinator
Ms. Lussio performs essential administrative functions for CEE Financial Resources. Ms. Lussio
schedules and performs loan closings, tracks progress of financed projects, monitors the disbursement of
funds to borrowers and contractors, and prepares invoicing documentation. Ms. Lussio also serves as
CEE’s Spanish speaking interpreter. Ms. Lussio has been employed with CEE for 4 years.
Jennifer Amendt, Chief Financial Officer
Ms. Amendt has been employed with CEE for more than 15 years and came to CEE with several years of
accounting experience. Ms. Amendt monitors all of CEE’s accounting and is responsible for the financial
statements, annual returns and overall corporate compliance issues. Ms. Amendt holds a Masters Degree
in business administration with an emphasis in management and accounting.
Judy Thommes, Marketing Coordinator
Ms. Thommes joined CEE in 1992. She develops and coordinates marketing strategies for all of CEE’s
programs, and she is responsible for the production and distribution of CEE’s marketing materials. Ms.
Thommes does the design, layout and production of external communication materials including reports,
case studies, direct-mail pieces and show displays. Ms. Thommes also designed and updates CEE’s
Page A-2
Energy Savings Fund for Nonprofits – Attachment A
Center for Energy and Environment
external website. In addition to her marketing duties, Ms. Thommes represents CEE and its mission at
meetings around the state. Ms. Thommes has a B.A. in Public Relations and a minor in Computer
Information Systems from St. Mary’s University in Winona, Minnesota.
Richard Szydlowski, Director of Engineering and Business Development
Mr. Szydlowski has over 25 years of experience in energy efficiency. At CEE, he manages a staff of 18
engineers and analysts who conduct field research and deliver energy services to commercial and
multifamily buildings. Mr. Szydlowski has extensive experience with a variety of software analysis tools,
including DOE2. Prior to coming to CEE, Mr. Szydlowski served as a senior research engineer at Pacific
Northwest National Laboratory, where he focused on field monitoring and evaluation of large facilities
(such as installations of the Department of Defense and Department of Energy). For this, he developed an
extensive suite of monitoring equipment and automatic data collection and analysis software. He
previously served as a staff scientist at Lawrence Berkeley National Laboratory and as a mechanical
engineer at Ames Laboratory, Solar Division, with an emphasis on field data acquisition, data
management and analysis for energy-efficiency and solar technologies. Mr. Szydlowski holds an M.S. in
Mechanical Engineering, an M.E. in Industrial Engineering, and a B.S. in Aerospace Engineering.
Kristen Funk, Project Manager
Ms. Funk joined CEE in 1996; her responsibilities include program management, analysis and evaluation.
Ms. Funk currently manages three lighting retrofit programs for Minnesota utilities. The largest of these
is the One-Stop Efficiency Shop lighting program, which is sponsored by Xcel Energy. This
comprehensive program now delivers lighting retrofits to about 1,200 commercial customers per year.
Ms. Funk oversees the day-to-day activities of these lighting programs, serving as a point of contact for
vendors, auditors and utility staff to ensure that programs stay on track to meet annual savings goals.
Ms. Funk holds a B.A. in International Studies from St. Norbert College in DePere, WI and a Masters of
International Affairs and Environmental Policy from Columbia University.
Mike Verhulst, LC, Senior Lighting Consultant
Mr. Verhulst joined CEE in 1994 and has worked as a lighting consultant since 2001. As a senior lighting
consultant for Xcel Energy’s One-Stop Efficiency Shop lighting program, Mr. Verhulst is responsible for
direct marketing, performing lighting audits and other technical services, coordinating with contractors, and
overseeing projects through verification of completion.
Mr. Verhulst also works year-round to keep current on the latest lighting technologies. Mr. Verhulst
received his lighting certification from the National Council on Qualifications for the Lighting
Professions in 2006 and is an associate member of the Illuminating Engineering Society of North
America. Mr. Verhulst holds a B.S in Business Administration with an emphasis in marketing and
business communication from the University of Wisconsin in River Falls.
Ken Campbell, Consultant to CEE
Mr. Campbell is a long-term consultant to CEE, and served as President of CEE’s for-profit subsidiary
from 1989 to 1995. Mr. Campbell now assists CEE in business development and in design and
implementation of new programs. Mr. Campbell has exceptional expertise in energy-efficiency program
design, particularly in the areas of program funding and project financing. He was extensively involved
in design of the Trillion Btu Program and the Public Buildings Enhanced Energy Efficiency Program
(PBEEEP). Mr. Campbell holds a B.A. from Carleton College and completed his course work for an
M.A. in Public Administration at the University of Minnesota.
Energy Savings Fund for Nonprofits – Attachment A
Center for Energy and Environment
Page A-1
ATTACHMENT B: LETTERS OF COMMITMENT
BC
1911 NW 14th Street • PO Box 6938 • Rochester, MN 55903
pb 507.281.6262 fax 507. 281.6270 TTY
507.529.4607 www.abclnc.org
Ability Building Center
February 8,2010
Office of Energy Securhy
Minnesota Department of Commerce
85 Seventh Place East, Suite 500
Saint Paul, MN 55101
Subject: Recommendation for the Energy Savings Fund for Nonprofits
On behalf of the Minnesota Association of Community Rehabilitation Organizations (MACRO), I
am writing to recommend that the Office of Energy Security award a grant to the Center for
Energy and Environment (CEE) for the Energy Savings Fund for Nonprofits.
There are 32 Community Rehabilitation Programs (CRPs) in Minnesota. These are nonprofit
entities organized under Section 501(c)(3) of the Internal Revenue Code whose primary purpose
is to provide vocational rehabilitation, job training and employment opportunities to people with
disabilities.
Many of our facilities are light-industrial buildings that were constructed in the 1950s and 1960s.
Energy-efficiency improvements such as lighting retrofits and boiler replacements would improve
the functionality and comfort of our buildings and reduce our operating expenses. Many of
Minnesota's CROs are facing severe financial constraints. If commercial credit is available to
CROs, it is expensive in the current credit ma.rket. Thus, CRPs are not likely to finance energyefficiency improvements with conventional loans.
I am the Executive Director of the CRP in Rochester, MN, and I hope to finance a boiler
replacement with financing from the Energy Savings Fund for Nonprofits. Likewise,]'m sure
there are other CRPs that would undertake energy-efficiency projects if low-cost financing is
made available through the Energy Savings Fund.
.vt
Thank you for your consideration of my comments.
Sino "''Y·
St en Hill
Chair, MACRO
Page B25
Energy Savings Fund for Nonprofits- Attachment B
Center for Energy and Environment
EnerChange
Saving Money by Saving Energy
A Minnesota 501(c) (3)
Organization
February 8, 2010
Office of Energy Security
Minnesota Department of Commerce
85 7th Place East- Suite 500
St. Paul, !'vtN 5510 I
RE:
Pa rtnership with CEE to implement a revolving loan-fund for Energy Savings in
Minnesota Nonprofils
NlCFJEnerChange, already approved by the Office ofEnergy Security (OES) for inclusion in the
CIP plans ofXcel Energy and CenterPoint Energy has a mission to assist Minnesota's United
Way nonprofit business community in achieving energy efficiency savings by marketing and
promoting exjsting Minnesota utility CLP programs, as well as other products and services lhat
will achieve energy efficiency for Minnesota nonprofit businesses.
EnerChange is committed to partner with CEE (Center for Energy & the Environment) to identify
those facilities in need of equipment upgrades, specify a program and financing to achieve the
recommendations and reduce energy consumption. Many nonprofit businesses do not have the
resources available to self-{l.nance these necessary improvements and need assistance to gain
access to loans that will allow them to move forward with their goals ofreduci.ng consumption.
EnerChange intends to facilitate lending to our program participants at below-market interest
rates and without unworkable security requirements. In the workplan submitted to OES on
January 6, 2010 EnerChange demonstrated a productive working relationsh.ip with the United
Way and the nearly 200 agencies formally supported. By June 30 1\ 2010 EnerChange will have
identified over 50 large multi-facility organizations which have been analyzed for energy
consumption and detailed upgrade/retrofit recommendations in place.
Nonprofit organizations have a challenge to qualify for conventiona.l fi.nanci.ng terms from
commercial banks due to the organizational bylaws, insufficient assets and revenue streams. For
those nonprofits which do have the ability to borrow, high interest expenses can negate the cost
savings of energy-efficiency improvements. The success of EnerChange depends on being able
to lead nonprofit businesses which need facility upgrades and improvementS to a revenue-source
that will encourage expedient panicipat.ion to achieve energy savings.
NTCE/EnerChange respectfully requests OES to award a grant to the Energy S11.vings Fund for
Nonprofits. ln partnership wilh both the United Way and the Center for Energy and Environment
(CEE) EnerChange is committed to promoting use of the Energy Savings Fund for Nonprofias to
all of the nonprofit businesses we serve.
23505 Smithtown Rd
Suite 280
Shorewood,MN 55331
A Program of NICE
ENERCHANGE.ORG
PH: 952.562.8698 FAX: 952.470.5761
Energy Savings Fund for Nonprofits- Attachment B
Center for Energy and Environment
Page B-1
MINNESOTA
:c===
===:1!COUNCIL OF
NON PROFITS
February 3, 2010
Office of Energy Security
Minnesota Department of Commerce
85 Seventh Place East, Suite 500
Saint Paul, MN 55101
Subject: MCN Support for the Energy Savings Fund for Nonprofits
The mission of the Minnesota Council ofNonprofits (MCN) is to inform, promote, connect and
strengthen individual nonprofits and the nonprofit sector. By promoting the Energy Savings Fund
for Nonprofits to our 2,000 members, we will advance this mission.
MCN recently published the "Nonprofit Current Conditions Report." In a survey of our
members, we discovered increasing demand for their services and decreasing revenues. Sixtyone percent ofnonprofits indicated that their revenues declined in 2009, and 67% ofnonprofits
anticipate cash shortfalls in 2010. Many nonprofit organizations have been forced to reduce
program expenditures as well as their internal operating budgets.
I believe that nonprofit organizations are highly motivated to invest in energy-efficiency
improvements that would reduce their operating expenses, but restrictive underwriting standards
and high interest rates prevent nonprofits from doing so. The Energy Savings Fund for
Nonprofits will enable nonprofit organizations to make investments in their facilities that will
result in more dollars available for direct program expenditures.
MCN effectively communicates with our members, distributes information and promotes positive
action. MCN maintains an informational website, publishes resource documents, and holds
workshops and other events. In partnership with the Center for Energy and Environment (CEE),
MCN will use these capabilities to promote the Energy Savings Fund for Nonprofits to our 2,000 ·
members.
MCN believes that the Energy Savings Fund for Nonprofits will be a valuable financial resource
for the nonprofit sector of Minnesota. We therefore recommend that this Fund be established
with a grant from the Office of Energy Security.
RespP
Thank you foryourconsideration.
att
tive Director
MINNESOTA COUNCIL OF NONPROFITS
2314 University Avenue West, Suite 20
Saint Paul, Minnesota 55114-1863
Telephone 651-642-1904 • 800-289-1904
Fax 651-642-1517
info@mncn.org • www.mncn.org
Page B27
REGIONAL CHAPTERS
Twin Ports Area Nonprofit Coalition, Duluth
Itasca Area Nonprofit Council, Grand Rapids
South Central Chapter, Mankato
www.mncn.org
Energy Savings Fund for Nonprofits- Attachment B
Center for Energy and Environment
Center for Energy and Environment
212 3rd Avenue North, Suite 560 "' Minneapolis. MN 5540 I "' Phone (612) 335-5858 _. Fax: (612) 335-5888
February 12, 20 I 0
Natalie Buys
Minnesota Depattment of Commerce
85 Seventh Place East, Suite 500
Saint Paul, MN 5510 I
Subject: Center for Energy and Environmen t- CI Facili ty Grant Pt·oposal
Category 2-Revolvi ng Loan Progt·ams
On behalf of the Board of Directors and staff of the Center for Energy and Environment (CEE), I am
pleased to submit to the Department of Commerce a proposal for a grant to fund a revolving loan program
called the Energy Savings Fund for Nonprofits. CEE is a nonprofit, 50l(c)(3) organization whose
mission is to promote efficient use of natural and economic resources. To advance this mission, CEE will
invest $330,000 in the Energy Savings Fund for Nonprofits and will provide in -kind contributions of staff
limt: and olht:r rt:sourvt:s for tht: development and on-going operation of the Energy Savings Fund, subject
to the terms of a mutually acceptable grant agreement.
CEE has designed the proposed Energy Savings Fund for Nonprojits to induce and enable nonprofit
organizations to complete energy-efficiency projects in their facilities that they otherwise would not
undettake due to financial barriers. The Endgy Savings Fund will be marketed ambitiously, and
participants will receive expett technical assistance; but the Fund will incur no costs for marketing or
teclmical services. The Energy Savings Fund for Nonprojits will be integrated into CEE's One-Stop
Efficiency Shop lighting program in Xeel Energy's service territory, and it will complement the technical
services and rebate programs of utilities statewide. CEE's implementation pattner, NICE/EnerChange,
will serve as liaison to the United Way and to the 200 Minnesota nonprofit agencies funded by the United
Way; and the Minnesota Council of Nonprofits will promote the Energy Savings Fund to its 2,000
members.
With an initial capitalization of $600,000, the Energy Savings Fundfor Nonprofits will finance about 180
projects with total costs of$2.8 million over ten years; and we estimate that for every $1.00 of grant
funds, nonprofit organizations will realize lifetime energy cost savings of $64.42. As impressive as these
estimated impacts are, the potential of the Energy Savings Fund for Nonprofits is much greater. CEE
believes that early success will attract investments from philanthropic foundations and other institutional
investors, whose funding patticipation will multiply the lending capacity and resulting benefits of the
Energy Savings Fund for Nonprofits.
Thank you for your consideration.
Respectfully,
Sheldon Strom
President
www.mncee.org
www.mnenergychallenge.org
Energy Savings Fund for Nonprofits- Attachment 8
Center for Energy and Environment
Equal Opportunity Employer
Page B-3