VCE joins other Community Choice Aggregators in issuing over $18 Billion in Clean Energy Bonds through the California Community Choice Financing Authority (CCCFA), saving California Electricity Customers over $100 Million Dollars Annually
Yolo County, CALIF., – Valley Clean Energy (VCE) is pleased to announce that over the next 10 years, it will save $35 million dollars on its existing long-term renewable power contracts. As the public, not-for-profit electricity supplier for Yolo County, VCE can take advantage of public financing tools to achieve these savings.
After months of preparation, VCE completed its first pre-pay clean energy revenue bond in March. This innovative public financing tool resulted in a remarkable 14.4% savings on the assigned long-term renewable energy contracts that help provide clean, cost-competitive electricity to over 125,000 VCE customers. These savings compare favorably to similar bond transactions for other Community Choice Aggregators (CCAs) who have averaged 12% savings since this prepay approach was first used in 2021. VCE is happy to join its sister CCA agencies that together have issued over $18 billion dollars of prepayment transactions through CCCFA, collectively saving California electricity customers over $100 million dollars every year.
“Affordability and financial stability are extremely important for our customers. We’re proud that VCE can employ a creative financing strategy that will save us tens of millions of dollars over the next few years, while still on target toward our 100% renewable electricity by 2030 goal,” said Bapu Vaitla, Chair of the VCE Board of Directors. “When we benefit, our customers benefit—because we’re a public agency, we reinvest these revenues in our community in the form of rate discounts and local development through customer programs.”
A Clean Energy Project Revenue Bond is a form of wholesale electricity prepayment that requires three parties: a tax-exempt public electricity retailer (VCE in this transaction), a taxable energy supplier, and a municipal bond issuer (CCCFA). The parties then enter into long-term power supply agreements for zero-emission clean electricity sources such as solar, wind, and geothermal. The municipal bond issuer issues tax-exempt bonds to fund a prepayment of energy that will be delivered over 30 years. The energy supplier provides a discount to the tax-exempt public electricity retailer in exchange for the prepayment of power purchases funded by the bond proceeds. VCE has assigned a combination of solar and solar+battery storage projects into this prepay transaction. The bonds will be utilized to prepay for the purchase of a combined capacity of almost 55% of VCE’s current load
Interestingly, VCE’s deal represents the longest initial period (10.1 years) among all CCA bond issuances. The average initial period for CCAs has been 7.6 years. VCE’s extended period is a result of the current interest rate environment and the willingness and capability of VCE’s counterparty to provide funding for such a duration at a favorable rate. Consequently, VCE has locked in above-average savings for a longer period, ensuring it will not need to revisit this process for these energy contracts for the next decade.
“The entire Valley Clean Energy team is extremely pleased with the outcome of the financing,” said Edward Burnham, VCE’s CFO. “We were able to execute a transaction in a volatile interest rate environment, resulting in some of the highest savings ever achieved on a prepayment transaction. This is just one of the many steps VCE is taking to make energy more affordable.”
“VCE customers currently see rate discounts of 5-10% on their electric bills, and financing mechanisms like prepayment allow us to better serve our community by providing reliable, affordable, clean energy, and reinvesting in local programs,” said Mitch Sears, VCE’s CEO. “Because affordability is so crucial, we are extremely pleased to lock in lasting savings that will benefit our customers.”
About Valley Clean Energy
Valley Clean Energy — or VCE — is the public electricity provider for residential and commercial customers in Woodland, Winters, Davis, and unincorporated Yolo County. We’re a not-for-profit agency, which means that we’re working 100% for our customers. VCE keeps program control and revenues right here at home, where we can create jobs and build local clean energy projects. We reinvest dollars to boost our local economy while taking control of our clean energy future. More information is available at https://valleycleanenergy.org/.
About California Community Choice Financing Authority
California Community Choice Financing Authority (CCCFA) was established in 2021 with the goal to reduce the cost of power purchases for member community choice aggregators (CCAs) through pre-payment structures. The founding members of CCCFA include Central Coast Community Energy, Clean Power Alliance, Ava Community Energy (formerly East Bay Community Energy), Marin Clean Energy, and Silicon Valley Clean Energy. CCCFA is a Joint Powers Authority which can help member CCAs save up to 10% or more on power purchase agreements, helping reduce costs for ratepayers and increase available funding for local programs. CCCFA has issued over $18 billion in tax-exempt prepayment revenue bonds for its member CCAs saving over $100 million/year in the cost of renewable energy.