Energy Trust (RET) was created in 1993 as part of the restructuring of the commonwealth's electric utility industry. The RET is funded with approximately $27 million annually through a surcharge on utility bills. The RET has invested in Massachusetts-based PV manufacturers Evergreen Solar and Konarka Technologies, and fuel cell companies Accumetrics and Nuvera Fuel Cells. The RET also has provided $54 million for a waste-to-energy program affecting 138 communities, and it recently funded the $15 million Massachusetts Green Energy Fund, used to invest in Massachusetts-based renewable energy businesses.
In addition to Massachusetts and Connecticut, there are at least 10 other states with clean-energy funds. In 2002, 17 clean-energy funds from 12 states 4 formed the Clean Energy States Alliance (CESA) to serve and coordinate the common goals of the participating clean-energy funds. CESA estimates that its members have invested $1.5 billion over the last five years and will invest approximately $2.5 billion over the next 10 years.
Direct Investment Dollars
Earlier this year, California made a dramatic announcement that shook the world of energy technology investing. Instead of levying a surcharge on ratepayers to provide capital for a state-backed venture capital fund, California's treasurer directed state pension funds to focus a portion of their investing in clean energy. On Feb. 3, 2004, state treasurer Phil Angelides launched the California Green Wave Initiative. The initiative calls on the state's two large public pension funds (with combined assets of $250 billion)-the California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement Systems (CalSTERS)-to invest $1.5 billion in cutting-edge technologies and environmentally responsible companies. The goal of the Green Wave Initiative is to improve long-term financial returns through investments in the environmental technology sector, while also reducing the risks to the pension funds posed by corporate environmental liabilities. The initiative calls on CalPERS and CalSTERS to: (1) invest a combined $500 million in private-equity investments, venture capital, and project financing to develop clean technologies that provide positive, long-term returns, and create jobs and economic growth in California; (2) invest a combined $1 billion of their stock portfolios into environmentally screened funds managed by public-equity investment managers with proven track records; and (3) undertake a comprehensive audit of their respective real-estate investments to determine whether the investments are maximizing their opportunities to use clean energy, energy efficiency, and green building standards. If other states follow California's lead, the capital available for clean energy companies will increase enormously.
Clean Energy Purchases and Loan Support
Another innovative approach adopted by some states is the promotion of renewable energy by requiring that all, or a portion, of a state's energy come from clean sources. Pennsylvania-the first state in the nation to buy green power to meet its own energy needs-began purchasing 5 percent of its electricity from advanced energy resources in 2000. Beginning last July 1, that amount increased by 10 percent, and the commonwealth plans to move to a 20 percent requirement shortly. Earlier this year, Gov. Donald Carcieri announced that Rhode Island would purchase (using renewable energy certificates) 100 percent of the electricity used at