New Joint Powers Agency will help reduce power costs for CCAs
SAN RAFAEL and CONCORD, Calif. —
In June 2021, four California Community Choice providers (CCAs) jointly formed the California Community Choice Financing Authority (CCCFA), a Joint Powers Agency. CCCFA was created with the goal to reduce the cost of power purchases through a pre-payment structure. Member agencies can save 10% or more on power purchase agreements entered into under this structure. These prepayments allow CCAs to reduce customer costs, retain the green attributes of the renewable energy contract, and increase funding available for local programs. Central Coast Community Energy (CCCE), East Bay Community Energy (EBCE), Marin Clean Energy (MCE), and Silicon Valley Clean Energy (SVCE), are the founding members of CCCFA. CCCFA membership is open to CCAs in California that are interested in utilizing the JPA for prepayment transactions.
Formation of CCCFA assists the member CCAs by undertaking the financing or refinancing of energy prepayments with tax-advantaged bonds. The prepay structure enables publicly owned utilities, including CCAs, to effectively leverage the difference between tax-exempt and taxable debt rates to fund the reduction in the cost of power purchases.
“This collaboration of local public power agencies affords each member the opportunity to reduce the cost of their power while retaining the flexibility to continue to focus on local projects and programs,” said Nick Chaset, CCCFA Board Chair and EBCE CEO. “Prepayments are a tool that can bend the curve on affordability and unlock more opportunities to develop new renewable projects in California.”
Prepayment transactions have been used in the United States for the last 30 years primarily for natural gas transactions. Over 90 municipal prepayment transactions totaling over $50 billion have been completed in the US, with over 95% of them for natural gas. As CCAs continue to accelerate the development of new renewable energy supplies and drive local GHG reductions, the not-for-profit agencies are also rewriting norms in the financing aspect of energy markets, a space that historically has been leveraged primarily by gas and fossil fuels.
Prepayment transactions are codified in the US Tax law, and Congress enacted legislation specifically allowing for such transactions as part of the National Energy Policy Act of 2005. CCCFA will take advantage of this structure to increase the amount, and reduce the cost, of clean energy on the California grid, combating climate change and fulfilling customers’ needs for non-polluting resources.
Energy prepayment transaction agreements undertaken by CCCFA must be approved by the Board of Directors of the member CCA proposing the prepayment. Then the CCCFA Board will have the opportunity to fully consider the benefits, obligations, and risks of each prepayment transaction prior to approving any bond issuance. CCCFA is governed by a Board of Directors consisting of one director representing each founding CCA.
The creation of CCCFA follows the formation of California Community Power (CC Power) earlier this year as a way to help CCAs across the state reduce costs. CC Power allows the member agencies to combine their buying power to procure new, cost-effective, clean energy and reliability resources to continue advancing local and state climate goals. View the full release here.
For more information about CCCFA and to sign up to receive notifications for future Board meetings, please visit CCCFA.org.
About Central Coast Community Energy: Central Coast Community Energy (CCCE) is a public agency that sources competitively priced electricity from clean and renewable energy resources. CCCE is locally controlled and governed by board members who represent each community served by the agency. Revenue generated by CCCE stays local and helps keep electricity rates affordable for customers, while also funding innovative energy programs designed to lower greenhouse gas emissions and stimulate economic development. CCCE serves more than 400,000 customers throughout the Central Coast, including residential, commercial and agricultural customers in communities located within Monterey, San Benito, San Luis Obispo, Santa Barbara and Santa Cruz counties. Learn more at 3CEnergy.org and on social media, including Facebook, Instagram and Twitter @3CEnergy.
About EBCE: EBCE is a not-for-profit public agency that operates a Community Choice Energy program for Alameda County and fourteen incorporated cities, serving more than 630,000 residential and commercial customers throughout the county. EBCE initiated service in June 2018 and expanded to the cities of Pleasanton, Newark, and Tracy in April 2021. As one of 19 community choice aggregation (CCA) programs operating in California, EBCE is part of the movement to expedite the climate action goals of their communities and those of California. EBCE is committed to providing clean power at competitive rates while reinvesting in our local communities. For more information about East Bay Community Energy, visit ebce.org.
About MCE: As California’s first Community Choice Aggregation Program, MCE is a groundbreaking, not-for-profit, public agency that has been setting the standard for energy innovation in our communities since 2010. MCE offers cleaner power at stable rates, significantly reducing energy-related greenhouse emissions and enabling millions of dollars of reinvestment in local energy programs. MCE is a load-serving entity supporting a 1,200 MW peak load. MCE provides electricity service to more than 540,000 customer accounts and more than one million residents and businesses in 36 member communities across four Bay Area counties: Contra Costa, Marin, Napa, and Solano. For more information about MCE, visit mceCleanEnergy.org, or follow us on Facebook, LinkedIn, Twitter and Instagram.
About Silicon Valley Clean Energy: Silicon Valley Clean Energy is a not-for-profit, community-owned agency providing clean electricity from renewable and carbon-free sources to more than 270,000 residential and commercial customers in 13 Santa Clara County jurisdictions. As a public agency, net revenues are returned to the community to keep rates competitive and promote clean energy programs. Silicon Valley Clean Energy is advancing innovative solutions to fight climate change by decarbonizing the grid, transportation, and buildings. Learn more at SVCleanEnergy.org.
Silicon Valley Clean Energy
(408) 721-5301 x1004