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Lansing Board of Water & Light Details How Bond Issuance Will Help Fund Clean Energy Program

Michigan public power utility Lansing Board of Water & Light recently detailed how a bond issuance will help to fund its investment in Lansing BWL’s clean energy program.

In a recent blog post, the utility noted that it announced its largest planned growth in nearly 140 years in July.

Seven projects have been selected to be complete over the next ten years and four are already underway with scheduled commercial operation dates.

“One important part of the planning and scheduling process includes going out for bonds,” Lansing BWL noted in the blog.

BWL just finished the bond process to provide the necessary funds for investment in its clean energy program, and at the same time leverage this opportunity to refinance a portion of its current outstanding debt for a lower cost.

“Bond issuance is a lengthy process that begins with identifying a specific need, transitions to assembling a multifunctional team, and ends with telling our story and purpose to rating agencies and investors. For this particular issuance, the process also entails structuring the bonds in a way that allows us to maximize the investment tax credit we are eligible to receive for our clean energy investments under the Inflation Reduction Act,” the utility said.

“Early in the process, our team worked on the preliminary official statement. This document is well in excess of 100 pages and tells our story including why the funding is needed, who our customers are, what our financial standing is and what our future plans are,” the blog noted.

For this issuance, the utility worked with a team of industry experts which includes PFM, its financial advisor, who helps with planning, strategy and coordination; Miller Canfield, the utility’s bond counsel, which ensures regulatory and tax compliance; Bank of America and Goldman Sachs, the utility’s senior underwriters, which helps the utility connect with and sell bonds to investors; and underwriter’s counsel, Dykema Gossett, which assists in the development of key documents and execution of the process.

“This is in addition to many folks who supported the process within the BWL, from treasury and legal to strategic planning and operations,” Lansing BWL said.

“Issuing bonds is our primary means of generating large amounts of funding for major initiatives such as the construction of generating facilities. This process is governed by strict regulatory requirements which calls for significant expertise, diligence and attention to detail,” the utility noted.

“Receiving the bonds means we have the funding needed to execute our strategy and it also means we’re making a long-term commitment to our bondholders to make payments when due and to keep specific promises throughout the 30-year life of the bonds, including maintaining key financial metrics and providing annual operational and financial updates.” 

These funds “will enable us to move forward with our major clean energy initiatives including moving toward carbon neutrality while serving an expanding customer base,” it said.

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