The city council of San Jose, Calif, in late April agreed to expand San Jose Clean Energy’s revolving credit agreement with Barclays Bank PLC from $50 million to $80 million. San Jose Clean Energy is the city’s community choice aggregator (CCA).
The increased credit facility will allow the CCA to make additional purchases of clean power into future years, thereby further hedging future electricity costs and maximizing customer savings.
“Our credit facility is another community choice financial milestone demonstrating the financial stability of CCAs,” said Lori Mitchell, San Jose Community Energy Department Director. “Financial institutions are recognizing the strength of the California community choice model,” she said.
San Jose Clean Energy is operated by the Community Energy Department, which is a department of the City of San Jose.
“Our loan is an indication of our confidence in the financial position of San Jose Clean Energy and the California community choice model – its large customer base and support from local and state elected officials are markers of success,” said John McCray-Goldsmith, who leads the public sector climate change infrastructure finance practice for the western U.S. at Barclays.
More than 98.7% of San Jose residents and businesses are customers of San Jose Clean Energy. In order to meet San Jose customers’ increased demand for renewable energy, totaling 2,000 GWh annually by 2022, San Jose Clean Energy currently buys power from existing power plants.
San Jose Clean Energy is currently negotiating its first long-term power purchase agreement to build new renewable energy resources dedicated for San Jose Clean Energy customers and will issue a request for proposals for additional opportunities.
Many CCAs, including those without credit ratings, have successfully secured long-term PPAs with renewable energy developers at competitive rates. In 2018, Silicon Valley Clean Energy and Monterey Bay Community Power signed agreements with vendors to build a total of 328 MW of new solar and wind resources coupled with 40 MW of battery storage.
California CCAs receive credit ratings from Moody’s Investors Service
In early May, Peninsula Clean Energy, another California CCA, received an investment grade credit rating from Moody’s Investors Service. Moody’s assigned a first-time Baa2 issuer rating to Peninsula Clean Energy, with a stable outlook.
Moody’s a year ago issued the first ever credit rating for a CCA, a Baa2 rating and stable outlook for California-based CCA Marin Clean Energy, saying that Marin Clean Energy has an established operating record as a California Joint Powers Authority.
The American Public Power Association has initiated a new category of membership for community choice aggregation programs.