Valley Clean Energy joins other Community Choice Aggregators in issuing more than $18 billion in Clean Energy Bonds through the California Community Choice Financing Authority saving California Electricity customers more than $100 million annually. Photo courtesy of Valley Clean Energy 

YOLO COUNTY, CA (MPG) - Valley Clean Energy (VCE) announced that over the next 10 years, it will save $35 million on its existing long-term renewable power contracts. As the public, not-for-profit electricity supplier for Yolo County, Valley Clean Energy can take advantage of public financing tools to achieve these savings.

After months of preparation, Valley Clean Energy 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 Valley Clean Energy 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. Valley Clean Energy is happy to join its sister Community Choice Aggregators agencies that together have issued over $18 billion of prepayment transactions through California Community Choice Financing Authority, collectively saving California electricity customers over $100 million every year.

“Affordability and financial stability are extremely important for our customers. We’re proud that Valley Clean Energy 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 Valley Clean Energy 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, a taxable energy supplier and a municipal bond issuer. 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. Valley Clean Energy has assigned a combination of solar and solar plus 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 Valley Clean Energy’s current load.

Valley Clean Energy’s deal represents the longest initial period (10.1 years) among all Community Choice Aggregators bond issuances. The average initial period for Community Choice Aggregators has been 7.6 years. VCE’s extended period is a result of the current interest rate environment and the willingness and capability of Valley Clean Energy’s counterparty to provide funding for such a duration at a favorable rate. Valley Clean Energy 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, Valley Clean Energy’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.”

“Valley Clean Energy 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, Valley Clean Energy’s CEO. “Because affordability is so crucial, we are extremely pleased to lock in lasting savings that will benefit our customers.”