SAN FRANCISCO — An authority operating out of the California Treasurer's Office would issue energy prepayment bonds to help state agencies and schools install renewable energy systems under a bill moving through the state legislature.
The Assembly's Committee on Utilities and Commerce is scheduled to hear SB 1754 today. The Senate passed the bill in April on a 33-to-5 vote.
It would authorize the California Alternative Energy and Advanced Transportation Financing Authority to issue electricity pre-payment bonds to help schools and state agencies finance construction of renewable energy facilities.
The proposal works in the following way, according to the State Treasurer's Office, which requested the bill: A private company would construct a renewable energy facility at a state government facility or school. The company would enter into a power purchase agreement with the financing authority, in which the company commits to deliver a specified amount of electricity to the facility.
In return, CAEATFA would use the proceeds of tax-exempt electricity pre-payment bonds to provide the supplier an upfront payment for the promised energy. That would lower the capital costs to build the alternative energy facility. The agency or school would enter a parallel power purchase agreement to pay its electricity bill to CAEATFA, and the authority would use that revenue to service the pre-payment bonds.
"The measure, we believe, would provide a three-pronged benefit," treasurer's office spokesman Tom Dresslar said in an e-mail. "It would help curb climate change emissions by significantly increasing renewable generation in California. For taxpayers, it would achieve this goal in the most cost-effective way. And it would further nurture California's green economic sector."
CAEATFA was created in 1980, but the authority was dormant between 2001 and earlier this year, when state Treasurer Bill Lockyer appointed Jan McFarland as executive director, saying he wanted to use it as a vehicle to foster projects to promote renewable energy projects and reduce greenhouse gas emissions.
The authority has the power to serve as a conduit bond issuer for projects in its subject areas, which include advanced transportation technology as well as alternative energy. It was also designed to issue clean renewable energy bonds, taxable tax credit bonds known as CREBs.
Lockyer is also sponsoring a bill to ask the state's voters to approve a $2 billion bond measure to finance projects at state government facilities to make them more energy efficient. That measure is designed to save taxpayers more in reduced energy bills than it would cost in debt service, according to the treasurer's office.
That bill, which cleared the Senate, is also scheduled to get make its first Assembly appearance today, in the Natural Resources committee.