Changes to New Jersey’s Energy Resilience Bank in 2016 and its Impact on NJ Municipalities
Two years ago the state legislature created the New Jersey Energy Resilience Bank (ERB) to encourage new innovation and promote energy resilience. This policy would in part create an opportunity for municipalities to gain better control over their own energy needs. Establishing the ERB could help realize the development of distributed generation projects, microgrids and other resilient technology designs at critical facilities throughout New Jersey.
The ERB provides technical and financial support, including grants and low-interest loans, to critical facilities so they may realize energy resilience projects or enhancements to existing energy infrastructure. In April 2016 a series of changes were made to make this process more accessible. Some of these changes include:
- $200 million total of ERB funding for water/wastewater and hospital applicants. Applications will continue to be accepted on a rolling basis and reviewed and brought forth to the board on a first-received, first-ready basis;
- Efficiency threshold minimums have been lowered from 65 percent to 50 percent in projects located in counties identified as most impacted by Hurricane Sandy;
- ERB Financial Product Terms are being modified for public and/or not-for profit applicants to provide 100 percent of the project’s unmet need;
- There will no longer be a $65 million set-aside specific for water and wastewater treatment facilities;
- Eligible applicants now include businesses that do not meet the SBA definition of a small business, and private utilities; and
- Application windows will remain open until September 30, 2016 for hospital applicants.
Three ERB Financial Products are now available to provide 100 percent of the unmet need for a public and/or non-profit project. The first is a grant/forgivable loan for all eligible resilient costs up to $25 million. A second grant/forgivable loan would equal 40% of the remaining eligible project costs. Third, an amortizing loan with a 2 percent interest rate and a term up to 20 years for the balance of the ERB project funding is available.
ERB funding will be determined and provided for each project as a combination of grant/forgivable loan and amortizing loan based on the underwriting process and program criteria that may include ownership structure, project economic feasibility, rate of return and other policy considerations. Eligible parties receiving ERB funding include: water and wastewater facilities, public and not-for-profit (NFP) organizations or small business, for profit businesses (SB-FPB), hospitals, state/county colleges and universities, public long-term care facilities, state and correctional institutions, public housing community shelters (e.g., schools or town centers). The ERB also provides financial assistance in a variety of forms, including direct loans, loan guarantees, early stage grants and loan loss reserve coverage for private lenders.
This funding source is continually evolving to ensure energy resilience is available across New Jersey ahead of future natural disasters. It is important that every municipality explore the ERB as an asset in both emergency preparedness and clean energy sustainability.
To learn more about applying visit www.njeda.com/erb/erb-(1).