State green bank chief: entrepreneurial spirit in a government suit
Bryan T. Garcia, the president of the Clean Energy Finance and Investment Authority, calls himself a believer in the philosophy of hockey superstar Wayne Gretzky. “You miss 100 percent of the shots you never take,” Garcia quotes Gretzky as famously saying — and quotes him often.
Garcia has always taken the shots — starting as a 10-year-old outside Los Angeles, scorekeeping for softball leagues at $3 a game, six games a weekend, to pay for his first Apple computer.
He’s been taking shots in spades since becoming president a little over a year ago of what was then called the Connecticut Clean Energy Fund. A month later he began the daunting mission of transforming it into CEFIA — the nation’s, if not the world’s, first statewide “green bank” — a new model for funding and deploying green energy.
In the old model, the Fund handed out subsidies for clean energy projects, using some $30 million it collected every year from fees on electric bills. That pool of money tended to run out, creating boom-bust cycles that made it difficult for Connecticut’s renewable energy industry — to date, primarily solar and fuel cells — to thrive.
As CEFIA, it’s shifting to a system that uses private and other kinds of investment to leverage that same $30 million into a self-sustaining funding stream. This shift is considered a first critical step toward motivating more people and businesses to opt for clean energy. That should drive down its cost, which should then make subsidies unnecessary — all the while creating jobs, building the economy, cleaning the air and making energy more reliable.
For Garcia — who aside from the requisite background in clean energy, environment, finance and public administration, has a no-problem-is-insurmountable ethos he learned in the Peace Corps — the challenge is downright fun.
“We’re trying to create the nation’s first successful state-level green bank,” he says. “Who wouldn’t want to be a part of that?”
A rocky first year
But Garcia’s first year has been rocky at times as he hits tight program deadlines dictated by the 2011 law that also created CEFIA as a quasi-public entity. The Authority is bound by statute to implement specific programs, but is independently governed with a board of directors partially made up of state officials.
The board, enthusiastic about the expertise and unique force of personality — low-key though it is — that Garcia brings to CEFIA, isn’t exactly watching the clock, though it’s mindful that the timeline to introduce financial “products” is not infinite.
“I guess we had hoped by September or October we would have put together a package or product and presented it to people in the financial world,” said Norma Glover, a former Clean Energy Fund board president who is now on the CEFIA board. “I do feel that we must get there and we must get there soon.
“We have given Bryan all the tools and it’s up to him and his staff now to make this happen.”
Board member Reed Hundt, CEO of the Coalition for Green Capital, which helps organizations like CEFIA develop financing ideas, called Garcia an agent for change. “Bryan Garcia is a Silicon Valley entrepreneur in government clothing,” Hundt said. “Bryan is congenitally impatient. That’s part of being an entrepreneur.
“I think we’re moving at a very rapid rate. I’m very pleased that he thinks he’s going too slow.”
In response, Garcia snaps his fingers. “I think people’s expectations were, coming out of the gate — ‘You guys are going to be paying for loans for hospitals and schools’ — without recognizing that government rushing to do things isn’t a good thing.”
Moving quickly has been a challenge. The administrative shift was more complex than imagined. And now, in addition to government, industry and the residents the Fund traditionally served, CEFIA also answers to the world of big finance.
Garcia has been negotiating with some of the world’s largest financial institutions (he won’t say which ones) trying to make them CEFIA’s partners. While none has signed on, there is almost no concern that none will. Garcia and others say the word is out. Banks are contacting CEFIA, as are other states looking to replicate Connecticut’s still unfinished model.
The model likely will include incentives for long-term power-purchase agreements to guarantee use of the power from renewable energy projects. Such guarantees lower the risk for those investing in their construction. Other incentives might be to offer low-interest loans to finance renewable energy projects, or loan guarantees for lenders.
“We’re very close,” Garcia says. “We’ve structurally thought through what the program will look like, we’ve modeled the numbers. We’re now kicking the tires with local financial institutions.”
Even without a financing mechanism, CEFIA’s track record for the first year is considerable as it has started to roll out a new generation of clean energy programs.
New program rollout
The biggest accomplishment, and biggest headache, has been reformulating the residential solar program. Instead of offering a steady rebate to consumers who install solar systems on their homes, the program reduces the incentives over time and includes more opportunities for solar leasing.
The CEFIA board had balked at Garcia’s initial residential solar plan because it did not lower subsidies for solar installations quickly enough. A more rigorous phase-out was approved by the board, disappointing solar industry leaders who had been waiting for a long-term program to help reinvigorate their stagnating business. But after one round of funding, and knowing industry concerns, Garcia recalibrated, adding money to the incentive program and raising incentive levels.
“What Bryan brings is a better understanding of the business person’s perspective,” said Mike Trahan, executive director of the industry group Solar Connecticut. Trahan was vocal about his dislike for the first solar plan, but said he respected Garcia and appreciated the greater access given to solar industry leaders. “The financial livelihood of hundreds of solar construction workers in Connecticut is largely in Bryan’s hands,” Trahan said. “I’m comfortable with that.”
Among other CEFIA accomplishments, proposals are being sought for anaerobic digestion and combined heat and power pilot projects as well as for innovations for clean energy financing.
A program called Solarize Connecticut, soon to be announced, will allow municipalities to bundle solar projects to reduce costs. And a long-awaited solar hot water program is likely to be unveiled this summer.
Indicative of its changed mission, CEFIA has hired a chief financial officer, something the predecessor Clean Energy Fund never had.
A data-driven number cruncher, Garcia is said to be a downright demon with a whiteboard — his only requirement for his small office. For those who have known him since he served at the old Clean Energy Fund, this is no surprise. Garcia sealed his reputation then as someone who could re-imagine the confluence of energy, government and finance.
During his tenure at the Fund from 2000 to 2007, he helped create a nonprofit program called Smart Power. Its goal was to get the state’s cities and towns to commit to reducing energy use by 20 percent. At the time the utility companies had begun offering their Clean Energy Options through which customers could elect, for a bit of extra money, to buy energy from clean sources. But there was no incentive to do either.
Garcia’s idea — offer communities a free solar panel for every 100 Clean Energy Option signups. The program — Clean Energy Communities — became Garcia’s signature and a national model.
Seven years later, some 103 communities have committed to reducing energy use, and more than 60 have qualified as Clean Energy Communities. The program has expanded to include rewards other than solar panels, and Garcia is expanding it again to allow energy efficiency measures to count toward rewards.
“It was wildly effective,” said Bob Wall, who was with Smart Power at the time but now works at CEFIA. “It was a hallmark of the way his mind operates.”
The would-be athlete
Connecticut might never have seen how Garcia’s mind operates were it not for a devastating play in a college baseball game in 1991.
A centerfielder for the University of California at Irvine, Garcia threw his arm out of its socket in a play from the outfield. After reconstructive surgery and a transfer the following year to UC Berkeley, he found himself cut from its baseball team two days before Bill Clinton became president. A distressed Garcia remembered watching author Maya Angelou’s “On the Pulse of Morning” speech at the inauguration.
“She essentially says, ‘You look into your brother’s eyes and into your sister’s face and you pick yourself up and you say good morning,'” he recalls. “And that was kind of my revelation: Sports was a part of your life and now you need to move on. And I just became an academic animal.”
A career goal
A degree in the political economy of natural resources — a first linkage for him of government, economics and the environment — was followed by a Peace Corps stint in Kazakhstan, a former Soviet republic. That experience prompted what would become the first classic Garcia business creation — Kids GLOBE.
In Kazakhstan he had worked with a program called GLOBE — Global Learning and Observations to Benefit the Environment. It collaborates with teachers and students around the world who provide local climate observations to scientists.
As a mere 20-something (he recently turned 40) he started a nonprofit that sold GLOBE-logo products like T-shirts to raise money to buy equipment so poor schools could participate.
“It was halfway into that venture where I was like, ‘Uh, I don’t know what I’m doing,'” he said. “‘I need to go back to school.'”
In typical Garcia fashion he pursued two master’s degrees at once. During the day he was at Yale studying environmental management. In the evenings he went to New York University for public administration, while still handling Kids GLOBE until it was spun off.
Renewable energy entered the Garcia equation when executive recruiter Terry Hannock called him on behalf of the Clean Energy Fund. When Garcia protested that Hannock must have the wrong person, he recalls Hannock saying: “‘You’re somebody who’s been in the business of trying to develop new things. You’re the one that I want to talk to.’ It was because of him that I fell in love with renewable energy.”
“What I saw in him was a person among a handful who understood important points of leverage to engage the business community,” Esty said. “That shift of the model from business-as-the-problem to business-as-the-solution is the heart of what a green bank is about.”
In 2008 Garcia and Kerry O’Neill, a like-minded finance-meets-energy advocate, formed the for-profit Earth Markets, which develops residential energy efficiency projects; and in 2010 the nonprofit Clean Energy Finance Center.
“It’s not often you find someone who understands principles of finance, who understand public policy, who understands innovation, and who’s a leader,” said O’Neill who calls herself one of Garcia’s biggest fans. “Bryan’s got that mix.”
Garcia had to give it all up along with positions on nonprofit boards when he returned to the Fund. “Earth Markets was hard,” Garcia said. “That was my baby.”
The tradeoff: days that regularly begin at 4:30 a.m. in the office — usually seven of them a week. “I love this job,” he says. “The day this becomes a TGIF job is the day I should walk away.”
That said, this is not where he sees himself in 10 years, and it never has been. “I want to be the director of the Peace Corps,” he admits candidly. That would be a Garcia-style Peace Corps that brings underserved communities renewable energy, clean water and access to food.
The ultimate Gretzky moment? “You have to kind of take the shot,” Garcia said.
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