SAN FRANCISCO — The Southern California Public Power Authority plans to bring $140 million of tax-exempt notes to market later this month to provide interim financing for one of several wind energy projects the joint-powers agency is working on to help utilities meet California’s aggressive renewable energy standards.

The deal could be followed by as much as $1.7 billion in debt for bigger wind farm projects that SCPPA is developing in Washington, Oregon and Utah, according to the minutes of its recent finance committee meetings.

“If you look at California, you’ll see that most of the utilities — whether they’re municipal or they’re publicly traded, investor-owned utilities — are scrambling to acquire renewable assets,” said Robert K. Rozanski, interim manager of finance and accounting at the SCPPA.

The current issue, for the Linden Wind Energy Project, is backed by revenue from unconditional take-or-pay power contracts with the Los Angeles Department of Water and Power, the nation’s biggest municipal utility, and Glendale Water & Power, also in California.

The SCPPA will refinance notes with long-term financing next year, when the Washington state windmill farm is ready to begin operation and the authority takes ownership from developers.

Los Angeles will take all of the electricity at first, but Glendale has an option to take 10% of the power if it needs it to meet increasingly stringent power regulations from the state and possibly the federal government.

Utilities across the U.S. are facing a growing wave of state and federal mandates to reduce emissions due to concerns that greenhouse gases such as carbon dioxide are warming the planet. The level of regulation remains uncertain, with climate change legislation still being debated in Congress, but 32 states have passed some form of renewable energy standards, according to the Department of Energy.

California’s investor-owned utilities also are legally required to generate at least 20% of their power from renewable sources by next year, and the state is set to impose a cap-and-trade system for carbon dioxide emitters in 2012 as part of the Western Climate Initiative.

The cap and trade system could cost the LADWP $700 million a year if the utility ends up having to buy credits, according to a report by Moody’s Investors Service analyst Dan Aschenbach.

As Congress debates national cap-and-trade legislation, the Environmental Protection Agency said this week that it will regulate greenhouse gas emissions from big polluters, including most power plants.

The House passed its version of climate change legislation almost three months ago, including a cap on emissions, the creation of a trading system for carbon credits, and the roadmap to reducing carbon emissions by 17% from 2005 levels by 2020. The bill faces opposition in the Senate, but liberal Democrats, led by California Sen. Barbara Boxer and Massachusetts Sen. John Kerry, on Wednesday introduced a bill that would cut U.S. greenhouse gas emissions by 20% compared to 2005 by 2020, an even more aggressive cut than the House approved.

In California, lawmakers also continue to push for higher renewable standards. Gov. Arnold Schwarzenegger earlier this month said he would veto legislation requiring a third of the state’s energy to come from renewable sources by 2020, but he plans to impose the mandate by executive order.

Schwarzenegger wants to give utilities more flexibility than Democratic lawmakers’ bills allow. The Legislature would limit the amount of energy produced outside of California that utilities could use to meet the new requirements.

Los Angeles and other municipal utilities also face demands for clean power from local political leaders and environmentally conscious customers. That’s led to growing issuance of green muni bonds.

“We are starting to see some financed this way,” with municipal bonds that finance the purchase of generation facilities, Aschenbach said.

For example, the Turlock Irrigation District in California’s Central Valley earlier this year sold $425 million of Build America Bonds to purchase an even bigger wind farm in the same area of Washington. The Long Island Power Authority earlier this year said it may sell bonds to finance an $821 million wind farm off New York City.

More commonly, municipal utilities contract to purchase supplies from privately-financed solar and wind farms, which require investments in transmission lines.

In June, the Nebraska Public Power District sold about $70 million of Build America Bonds and tax-exempt debt to finance transmission system upgrades that will allow the district to bring privately produced wind energy into its grid.

With competition for renewable supplies increasing along with environmental regulation, municipal utilities are investing in generating capacity of their own.

In Texas, San Antonio’s CPS Energy, the biggest municipal user of wind energy, plans to spend $5.3 billion on projects related to sustainability through 2021.

Few are pursuing renewables as aggressively as LADWP. The municipal utility currently gets 45% of its electricity from coal-powered plants, and Los Angeles Mayor Antonio Villaraigosa has set a goal of increasing its renewable power resources to 35% by 2020 from 8% of electricity production today.

To help reach those goals, LADWP takes the lead in most of SCPPA’s big renewable projects, which also include hydroelectric, geothermal and solar projects.

The SCPPA is a joint-powers authority that includes 10 muni utilities and the Imperial Irrigation District. The municipal utilities are in the cities of Anaheim, Azusa, Banning, Burbank, Cerritos, Colton, Glendale, Los Angeles, Pasadena, Riverside and Vernon.

“California is out in front of the nation when it comes to renewables,” said Rozanski. “To combat global warming, SCPPA’s member agencies have adopted aggressive renewable portfolio standard goals and timetables.”

In addition to the Linden Wind Energy Project, the SCPPA is working on a 90-megawatt wind project called Leaning Juniper in Oregon, which will be financed in two phases with about $530 million of bonds. Its 300-megawatt Milford I and II projects in Utah may require more than $600 million in financing. Its $500 million, 262-megawatt Windy Point Project in Washington is expected to require one or two financings.

The SCPPA is also working on a Northwest Wind Project in Washington for which financing needs haven’t been determined, along with a variety of geothermal, hydroelectric and transmission projects that will help meet renewable standards.

The Linden project notes are primarily supported by the credit strength of LADWP, which will have a 90% stake in the project. The notes are rated MIG-1 by Moody’s and SP1-plus by Standard & Poor’s. The long-term ratings are Aa3 from Moody’s and AA-minus from Standard & Poor’s.

Morgan Stanley is underwriting the deal. The financial adviser is Public Financial Management Inc. Bond counsel is Fulbright & Jaworski LLP.

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