New Joint Powers Agency will help reduce power costs for CCAs
FOR IMMEDIATE RELEASE: July 29, 2021
Contact presse MCE :
Jenna Tenney, responsable du marketing et de la communication
(925) 378-6747 | jtenney@mcecleanenergy.org
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.
###
