Financing Initiative Will Assist Buildings with Clean Heating Conversions
In last month's Insider, we discussed the Department of Environmental Protection's accelerating phaseout of the dirtiest heating oils. The city's new regulations, issued in 2011, ban the heaviest heating oils—No. 4 and No. 6—that are still used in approximately 10,000 buildings and significantly contribute to air pollution.
In support of the initiative, Mayor Bloomberg recently announced more than $100 million in financing and other new resources to help city buildings convert to cleaner fuels. The financing and assistance results from innovative partnerships among leading banks, energy providers, and environmental groups, and are a part of the NYC Clean Heat program, the program that was launched last year to help buildings meet cleaner fuel requirements.
The new financing is available to property owners for clean heat conversions. The city is leading the program by committing $5 million to create a loan loss reserve fund through the New York City Energy Efficiency Corporation (NYCEEC) that will enable a significant portion of this private financing and making it accessible to low- and moderate-income buildings. Financial institutions, including Chase, Deutsche Bank, Hudson Valley Bank, Citi, and the Community Preservation Corporation, have committed $90 million in private lending for such projects. And the city's Housing Development Corporation and Department of Housing Preservation and Development will offer an additional $18 million for mixed-income residential buildings.
In addition to financing, New York City will expand its partnership with the Environmental Defense Fund to offer technical assistance and outreach to buildings that are undergoing fuel conversions. A team of trained energy professionals will assist buildings in evaluating their conversion options, coordinating with utilities to obtain natural gas access, and pursuing the use of biofuels and energy-efficiency measures. More information about these resources is available at www.nyccleanheat.org.
The city's chief utility providers will also reduce barriers to cleaner fuel. Con Edison and National Grid will upgrade natural gas infrastructure to make it easier and less costly for buildings to convert to that resource. The city's largest provider of heating oil, Hess Corporation, will offer its customers new incentives to switch to the cleanest burning fuels, including natural gas, ultra-low sulfur No. 2 heating oil, and biodiesel. Chase also worked with Hess to structure the model that will allow for future financing of this program.