Silicon Valley Clean Energy (SVCE) closed its fourth prepayment transaction for clean energy project bonds, the California community choice aggregator reported.
The deal results in approximately $4.5 million in savings annually, a 10.8 percent discount on the cost of power representing about 44 megawatts of around-the-clock supply.
"These savings are a benefit passed on to customers through rate stability and support maintaining a rate discount," SVCE said.
The Clean Energy Project Bonds, valued at $845 million, support the agency’s commitment to maintaining a strong financial position, it said.
“This type of innovative financing has allowed SVCE, as a public agency, to realize savings for our customers,” said Monica Padilla, SVCE CEO. “During a time when energy affordability is a key priority across the state, I am proud that our board of directors sees the value in utilizing municipal prepay bonds to allow us to save money as part of our clean energy supply.”
Prepay bonds are a form of financing reserved exclusively for public entities with a goal of reducing the cost of power purchases on quantities delivered under the prepay structure with minimal risk to the purchasing agency. This structure allows local clean energy providers like SVCE to reduce their energy costs by financing the acquisition of long-term energy supplies with tax-exempt bonds.
This is SVCE’s fourth prepay bond deal since 2021. The prepay bonds have realized at least a 10% discount on the prepay power projects, and the combined annual savings total about $19M.
In June 2021, SVCE joined three other CCAs to form California Community Choice Financing Authority (CCCFA), a Joint Powers Agency.
CCCFA was created to reduce the cost of CCA power purchases through a pre-payment structure. This is a common financing structure for municipal utilities to save on the purchase of fossil fuels, but CCCFA was the first to use this structure for clean energy projects.
Through CCCFA, California CCAs are one of the largest issuers of tax-exempt bonds in the US, saving participating CCA ratepayers over $150 million each year.
