NSTAR, along with the City of Cambridge, business leaders and state officials including Governor Deval Patrick, launched the Cambridge Energy Alliance in 2007. This new non-profit organization will design, market, finance, manage, and document unprecedented efficiency improvements in the use of energy, water, and transportation.

Overall, the Cambridge Energy Alliance initiatives will lead to a substantial reduction in the carbon emissions of the City of Cambridge.

Specifically, the Cambridge Energy Alliance aims to: reduce electricity demand by 50 megawatts, a 15 percent peak load reduction; reduce annual electricity and water consumption by 10 percent city-wide; achieve a participation rate of 50 percent in each sector (e.g. municipal, commercial, residential); and reduce annual GHG emissions from the city by 150,000 tons (10 percent) by 2011.

Also, Governor Patrick announced the creation of MassEfficiency, a $2 million revolving loan fund that will finance start-up costs for replicating this energy initiative in five more Massachusetts cities. The City of Boston will be the first to take the lessons learned from the Cambridge Energy Alliance and apply them on a larger scale.

The Cambridge Energy Alliance will carry out a $100+ million massive energy efficiency implementation effort, while also installing, where feasible, new renewable and clean energy generation, and technologies that curb electricity use during peak demand periods.

NSTAR is a key partner in achieving the project’s goals. If the entire state followed Cambridge's lead over the next half decade, the Commonwealth would save the equivalent of two coal-fired power plants in electric demand reduction. The tagline of the program, which will also target transportation, water use and heating efficiencies, is Saving Money and the Planet. Start-up support for this project has been provided by the Henry P. Kendall Foundation, the Barr Foundation and The Chorus Foundation.

A critical project component is the collaboration of stakeholders including Cambridge Health Alliance and city officials, NSTAR, members of the corporate community, university and civic leaders, energy suppliers, and regulators. New efficiency opportunities are being identified and planned for implementation.

Cities naturally aggregate both needs and services and therefore can support the design of a unique, but replicable financial mechanism – a Revolving Fund for Energy Efficiency – as proposed by the Cambridge Energy Alliance. By sponsoring and then aggregating reductions of both energy consumption and peak demand within its borders, Cambridge Energy Alliance, in conjunction with its many collaborative stakeholders can participate in all markets that value such reductions. Once the Revolving Fund is in place, the project is expected to become fully self-sustaining.

The project incorporates innovative financing techniques which could be used to develop similar energy efficiency projects in other Massachusetts communities as well as those across New England. Approximately 80 percent of the financing will come from private sources, without obligation to Cambridge or the state, resulting in an approach which should be highly attractive to cash strapped cities and towns.

The remaining 20 percent will generally come from a number of electrical utility incentive programs that were established in part to promote energy efficiency.

As a result, energy savings and clean energy installations will in most cases be paid for by the project financing and be repaid from future energy savings of the companies, Cambridge city facilities, universities, hospitals, small businesses and residents. No upfront costs will be required for such installations, and there will be no cost to Cambridge or state taxpayers.