Silicon Valley Clean Energy Prepay Bonds Valued At $1.1 Billion

Silicon Valley Clean Energy Prepay Bonds Valued At $1.1 Billion

Third clean energy prepay deal adds to collective $14M in annual savings through innovative financing solution 

Sunnyvale, Calif. – Silicon Valley Clean Energy (SVCE) closed its third prepayment transaction for clean energy project bonds, which offers substantial savings to the agency, a benefit passed on to customers through rate stability and maintaining a rate discount. The savings are approximately $7.7 million annually, a 13.1 percent discount on the cost of power representing about 77 megawatts (MWs) of around-the-clock supply. The Clean Energy Project Bonds, valued at $1.1 billion, support the commitment of SVCE to be financially responsible and sound, which allows the agency to support customers and the community with their ongoing efforts to lower emissions for a safer, cleaner future. 

“Community Choice Aggregators, like SVCE, are securing significant savings from this kind of structured financing, which is a benefit exclusively reserved for public entities,” said Girish Balachandran, SVCE CEO. “I appreciate the leadership of our board of directors and the innovative approach of our finance and power resources teams to leverage our ability to utilize municipal prepay bonds to continue our investment in clean energy and delivering savings to our customers and communities.”   

All three of the clean energy project bonds SVCE has issued since 2021 have realized at least a 10% discount on the prepay power projects, and the combined annual savings total more than $14M. 

  • 2021 – 10% discount on renewable projects representing 50 MWs, $1.9M annual savings 
  • 2023 – 10% discount on 55 MW, $4.7M annual savings 
  • 2024 – 13.1% discount on 77 MWs, $7.7M annual savings 

The goal of prepayment transactions is to reduce the cost of power purchases on quantities delivered under the prepay structure with minimal risk to SVCE. The prepay structure enables publicly owned utilities, including Community Choice Aggregators (CCAs), to reduce their energy costs by financing the acquisition of long-term energy supplies with tax-exempt bonds.   

In June 2021, four CCAs, including SVCE, formed the California Community Choice Financing Authority (CCCFA), a Joint Powers Agency. CCCFA was created to reduce the cost of power purchases through a pre-payment structure. Utilization of the prepayment structure by municipal utilities is a common industry practice to save on the purchase of fossil fuels – CCCFA was the first to use this structure for clean energy projects. Now, through CCCFA, California CCAs are one of the largest issuers of tax-exempt bonds in the US, and saving participating CCA ratepayers over $50 million each year. 

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About Silicon Valley Clean Energy
Silicon Valley Clean Energy is a not-for-profit, community-owned agency providing electricity from renewable and clean sources to more than 275,000 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. 

SVCE Contact 

Pamela Leonard, Deputy Director of Marketing & Communications | 408-549-2671 | pamela.leonard@svcleanenergy.org