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New York opens its Green Bank

New York’s Governor Andrew Cuomo announced the launch of the state’s Green Bank to provide financing for in-state alternative energy projects. Here is the skinny:

Governor Andrew M. Cuomo today announced the start of business operations for the New York Green Bank, which will work to stimulate private sector financing and accelerate the transition to a more cost-effective, resilient and clean energy system. The largest green bank in the nation, the NY Green Bank is seeking proposals from private-sector lenders, investors and industry participants that facilitate the financing of creditworthy clean-energy projects in New York State.

The proposed financing structures appear to put the Green Bank in the first loss position for some private sector risk:

Examples of the types of investment partnerships the NY Green Bank may engage in include credit enhancements, co-investing with the private sector in a loan fund for clean energy, loan warehousing/short-term project aggregation or other similar arrangements.

Who will be overseeing the investment process?

The NY Green Bank is a division of the New York State Energy Research and Development Authority (NYSERDA) and will operate within NYSERDA’s system of internal controls. In addition, the NY Green Bank will seek to apply banking and investment industry best practices with regard to risk management and compliance, including processes and procedures for evaluating and selecting proposals. An investment committee, which will include senior officers of the NY Green Bank and NYSERDA, will be required to approve any material financial transaction prior to closing.

Texas’ great energy success

Texas is America’s energy powerhouse, producing 16 percent of domestic energy, according to the U.S. Energy Information Administration:

    Texas was the leading crude oil-producing State in the Nation in 2011 and exceeded production levels even from the Federal offshore areas. Texas accounted for 28 percent of U.S. marketed natural gas production in 2011, making it the leading natural gas producer among the States. Texas led the Nation in wind-powered generation capacity in 2010 and is the first State to reach 10,000 megawatts of wind capacity.

Although Texas is known for its oil and natural gas production, it is in the area of wind energy that Texas has hit a new milestone. The state opened a massive electricity transmission grid that was built to gather wind energy produced in West Texas and move it to the population centers in East Texas. It is the first to build infrastructure specifically to support industrial scale production of alternative energy. Here is how it happened, according to the Public Utilities Commission (PUC) of Texas:

Description: The utilities code section 39.904 in conjunction with Senate Bill 20 (2005) established Texas’s Renewable Energy Program and directed the PUC to identify Competitive Renewable Energy Zones (CREZ). A CREZ is a geographic area where wind generation facilities will be constructed. In 2008, PUC issued order 33672 designating five CREZs for the generation of wind power and defining the required transmission upgrades to deliver wind generated energy to Texas consumers.

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