The Berkshire Wind Power Cooperative Corp. this week will sell $66.3 million of revenue bonds, including Build America Bonds, to help finance a wind power project in western Massachusetts.
BMO Capital Markets will price the bonds Monday or Tuesday, depending upon market conditions, according to David Tuohey, spokesman for the Massachusetts Municipal Wholesale Electric Co.
The MMWEC will purchase all of the wind farm’s energy production and sell that energy capacity to 14 different municipal light departments and plants that are part of the cooperative. The utility is a public corporation.
Payments from the local light departments to the MMWEC will pay down the bonds. The municipal entities are located in central and eastern Massachusetts.
The transaction includes $55 million of taxable Series 1-A Build America Bonds and $11.3 million of tax-exempt Series 1-B bonds, according to the preliminary official statement. Nixon Peabody LLP is bond counsel. Public Financial Management Inc. is the financial adviser.
Fitch Ratings and Standard & Poor’s rate the transaction A and A-minus, respectively.
Bond proceeds will help finance and refinance acquisition and construction costs for the 10-turbine Berkshire Wind Project located on Brodie Mountain in the towns of Hancock and Lanesborough. The facility will begin operating in mid-February and will provide a net electrical capability of 15 megawatts, according to the POS.
“This is an exciting project for many different reasons,” BWPCC president H. Bradford White said in a statement. “In addition to being an important source of power for 14 municipal utilities, it embodies the broader environmental and economic benefits of renewable energy development, consistent with the clean energy goals of the commonwealth and nation.”
White is also manager of the West Boylston Municipal Lighting Plant, one of the participating light departments.
Debt-service coverage is expected to be near 1.1 times annually, according to Fitch. “A lack of operating history is an inevitable risk, as the project is not yet on line. However, the participants’ financial metrics appear healthy, which should ensure that all financial commitments are met,” a Fitch report reads.
