The Berkshire Wind Power Project in Massachusetts on Dec. 22 completed the advance refunding of project debt with a $40.2 million tax-exempt bond issue that will save public power utility project participants and their consumers approximately $6.7 million over the remaining life of the debt, the Massachusetts Municipal Wholesale Electric Company said.
The Berkshire Wind Power Cooperative Corporation, or BWPCC, issued $64.7 million in 20-year, tax-exempt bonds in 2010 to finance construction of the 10-turbine, 15-megawatt project in Hancock, Mass., the second largest wind farm in Massachusetts, MMWEC noted.
Interest rates on the original bonds ranged from 4.3% to 5.4%. Rates on the refunding bonds, which will mature in 2030, range from 1.6% to 2.7%, yielding an approximate 11% reduction in debt service costs for project participants.
The refunding process was managed on behalf of BWPCC by MMWEC.
The Berkshire Wind Power Project began commercial operations in 2011 and has operated at an average capacity factor of nearly 40%.
BWPCC consists of municipal light departments based in the Massachusetts communities of Ashburnham, Boylston, Groton, Holden, Hull, Ipswich, Marblehead, Paxton, Peabody, Shrewsbury, Sterling, Templeton, Wakefield and West Boylston, and MMWEC.
“Despite a flood of advance refunding bonds on the market due to anticipated changes in federal tax law, the BWPCC bonds were more than eight times over-subscribed when the approximately $40.2 million deal was priced on Thursday, December 14,” MMWEC noted in a Dec. 22 news release.
President Trump in December signed into law a measure, H.R. 1, which retains the current-law tax exemption for municipal bonds, but prohibits the issuance of tax-exempt advance refunding bonds and tax credit bonds after Dec. 31, 2017.
The over-subscription allowed MMWEC to reprice the original offering to further enhance the savings resulting from the sale, which closed Dec. 22. The 14 Massachusetts public power utility BWPCC participants, all members of MMWEC, together will save an average of $514,000 per year for the remaining 13 years on the bonds.
MMWEC noted that December is typically a slow month for municipal bond activity, but the federal tax bill that was looming at the time motivated BWPCC and other municipal entities to take action in 2017.
“The success of this advance refunding is a reflection of the credit strength of MMWEC’s member utilities and the resilience of MMWEC’s financing capabilities,” said MMWEC CEO and BWPCC Treasurer Ronald DeCurzio. “There was a limited time frame to complete this deal, and the efficient actions of our financing team has yielded significant savings for the Berkshire project participants,” he said.
MMWEC is the joint action agency for public power in Massachusetts, providing a variety of power supply, financial, risk management and other services to the state’s consumer-owned, municipal utilities.
MMWEC receives federal grant to reduce bucket truck emissions
In other MMWEC news, the U.S. Environmental Protection Agency recently announced that the joint action agency has been awarded a federal grant to reduce greenhouse gas emissions produced by bucket trucks used at four Massachusetts municipal utilities.
The Diesel Emissions Reductions Act, or DERA, grant, administered by the EPA, is worth $262,500, MMWEC said in a Dec. 21 news release.
The MMWEC grant is the only DERA grant awarded in Massachusetts under the competitive national grant competition. For more information, click here.
The Presidents FY 2018 budget request would allocate $10 million dollars to continue to reduce diesel emissions in communities and areas of highly concentrated diesel pollution.
Under the grant award, Shrewsbury Electric Light & Cable Operations and the Boylston Municipal Light Department each will use the funds to purchase one new bucket truck with advanced control emissions.
In addition, the Ipswich Municipal Light Department and Hull Municipal Light Plant each will be able to purchase one new battery/diesel hybrid truck. MMWEC will disperse the funds to the light departments, all of which are MMWEC members.
MMWEC detailed how the replacement of these four vehicles will make an impact on the reduced emission of greenhouse gases and other criteria pollutants in these communities. In total, it is projected that nitrous oxide emissions, a greenhouse gas, will be reduced by nearly 6,000 pounds annually, and particulate matter will be reduced by nearly 250 pounds annually, by the replacement of less efficient trucks with the newer, more efficient vehicles.
MMWEC said emissions standards for medium and heavy-duty diesel equipment have changed markedly over the past ten years.
The emissions limits for nitrous oxide and particulate matter have been slashed to just ten percent of the allowable limits in 2006, MMWEC said in its press release. “This grant funding will allow the four municipal utilities to serve as a model to others in the state by doing their part to help reduce diesel emissions in Massachusetts,” MMWEC said.
MMWEC also said that the truck replacements will help Massachusetts meet the requirements of the state’s Global Warming Solutions Act.