FOR IMMEDIATE RELEASE
July 25, 2022
East Bay Community Energy expands its innovative “pre-pay” approach to wholesale electricity procurement
Procurement strategy to save over $7 million per year for East Bay customers
Oakland, California (July 25, 2022) – Since its launch in 2018, East Bay Community Energy (EBCE) has pursued innovative approaches to providing low-cost, clean energy to residents and businesses throughout Alameda County and in the City of Tracy. EBCE is expected to provide on-bill savings of $19 million this fiscal year alone, per its recently-approved budget. EBCE’s latest power procurement announcement is the completion of its second prepay transaction.
An energy prepayment is a long-term financial transaction available to municipal utilities and tax-exempt entities such as Community Choice Aggregators (CCAs) that enables a meaningful power procurement cost savings opportunity. This prepay structure has historically been utilized for natural gas procurement and is now being applied towards renewable and clean energy. As a public agency, EBCE is able to employ its tax-exempt status in order to reduce power procurement costs by prepaying for energy with Morgan Stanley as the prepaid power provider and bond underwriter.
This is EBCE’s second prepay transaction. Together with the savings from EBCE’s initial prepay transaction, EBCE has secured annual savings of over $7 million, which represents nearly a 1% discount to all EBCE customers. Both prepay transactions are 30-year energy contracts. The savings from this second prepay transaction are locked in until 2029, which is when the bonds will need to be repriced, while the savings from the first transaction are locked in until 2032 because it closed on 10-year bonds. The bonds for this prepay transaction, like the first, were issued through the California Community Choice Financing Authority.
“Applying a financial structure that traditionally has been used by natural gas providers to reduce costs, but now leveraging the tool so public power agencies can lower costs for renewable and clean energy, helps EBCE to further save our customers money.” said EBCE Chief Operating Officer, Howard Chang.
About East Bay Community Energy
East Bay Community Energy is a not-for-profit public agency that operates a Community Choice Energy program for most of Alameda County and the city of Tracy, serving more than 1.7 million residential and commercial customers. EBCE initiated service in June 2018 and expanded to the cities of Pleasanton, Newark, and Tracy in April 2021. As one of 24 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.