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Three community choice aggregators (CCA) in California issued $2 billion in bonds to pay upfront for about 450 MW of renewable energy over 30 years.
By routing bonds to purchase clean energy through the California Community Choice Financing Authority (CCCFA), the three public energy suppliers expect to save 8-12% on the cost of energy. The financial structure of the transaction will allow the CCAs to take advantage of both bulk energy discounts and the difference between taxable and tax-exempt rates, according to Garth Salisbury, director of finance and treasurer for MCE, a CCA that provides power to 37 San Francisco Bay Area communities.
Although bonds have been used to finance the prepayment of energy and natural gas in the past, this is the first time MCE has used this structure to purchase clean energy, Salisbury said Monday. With the first transactions now complete, he anticipates MCE will make additional purchases using the same template, which could also be used by other energy providers, he said.