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Bonds and Financing

Silicon Valley Clean Energy Prepay Bonds Valued at $1.1 Billion

California community choice aggregator Silicon Valley Clean Energy closed its third prepayment transaction for clean energy project bonds, “which offers substantial savings to the agency, a benefit passed on to customers through rate stability and maintaining a rate discount,” it said on Feb. 20.

The savings are approximately $7.7 million annually, a 13.1 percent discount on the cost of power representing about 77 megawatts of around-the-clock supply.

“The Clean Energy Project Bonds, valued at $1.1 billion, support the commitment of SVCE to be financially responsible and sound, which allows the agency to support customers and the community with their ongoing efforts to lower emissions for a safer, cleaner future,” the CCA said.

All three of the clean energy project bonds SVCE has issued since 2021 have realized at least a 10% discount on the prepay power projects, and the combined annual savings total more than $14M. 

  • 2021 – 10% discount on renewable projects representing 50 MWs, $1.9M annual savings 
  • 2023 – 10% discount on 55 MW, $4.7M annual savings 
  • 2024 – 13.1% discount on 77 MWs, $7.7M annual savings 

The goal of prepayment transactions is to reduce the cost of power purchases on quantities delivered under the prepay structure with minimal risk to SVCE.

The prepay structure enables publicly owned utilities, including CCAs, to reduce their energy costs by financing the acquisition of long-term energy supplies with tax-exempt bonds.   

In June 2021, four CCAs, including SVCE, formed the California Community Choice Financing Authority, a Joint Powers Agency. CCCFA was created to reduce the cost of power purchases through a pre-payment structure.

Through CCCFA, California CCAs are now one of the largest issuers of tax-exempt bonds in the U.S., and saving participating CCA ratepayers over $50 million each year, SVCE said.

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