The Southern California Public Power Authority priced $159 million of revenue bonds for the Milford Wind Corridor Phase II project this week. Barclays Capital was the lead underwriter on the deal.
“The bonds priced well lower than our original assumptions,” said SCPPA chief financial officer Vernon Oates.
Yields ranged from 0.43% for 2013 maturities to 4.14% for 2031, according to Thomson Reuters.
The bonds were rated AA-minus by Fitch Ratings and Standard & Poor’s. Oates said the authority was happy with both ratings. The SCPPA’s largest participant is the Los Angeles Department of Water and Power and the rating is equivalent to those that the agency has received on its electric revenue bonds, he said.
The SCPPA is a joint-action agency that owns and operates electric generation, transmission and physical gas assets on behalf of 12 municipal electric utilities in Southern California. LADWP and Glendale Water & Power are members of the SCPPA and participate on various joint projects with the authority and other members.
The bond structure for Phase II is similar to bonds issued for the Milford Wind Corridor Phase I, which received the Deal of the Year award from The Bond Buyer last December.
The project is located near Milford, Utah, adjacent to the Milford I project. Milford II, completed on May 2, consists of 68 wind turbines and was developed and operated by First Wind O&M LLC.
The SCPPA had to wait until the developer received a grant from the U.S. Department of Energy before it could sell the bonds, according to Oates.
“We can’t issue the bonds until we get the grant, but we determine the prepayment before we get the grant,” the CFO said.
The two facilities share capacity in an 88-mile transmission line that was built for Milford I, but with capacity to permit further wind generation expansion at the Milford site, according to the Fitch ratings report.