WASHINGTON — The Treasury Department
A total of $2.4 billion in CREB authority was available to issuers, $1.6 billion of which was authorized by the American Recovery and Reinvestment Act, with the remainder coming from the Energy Improvement and Extension Act of 2008.
The total authority was allocated in thirds to governmental bodies, public power providers, and cooperative electric companies. The taxable tax-credit bonds are intended to help the entities obtain lower cost financing for clean energy development projects, and the credits are intended to cover 70% of interest payments on the bonds.
“The Recovery Act’s innovative bond programs provide communities around the country with financing to jump start important development projects,” Treasury deputy secretary Neal Wolin said in a statement. “Because of the [CREB] awards announced today, energy developers will be able to access lower cost credit to help make the shift to clean renewable energy production, benefitting both our economy and our environment.”
Although the Treasury allocated the full $800 million portions to both the public power provider and governmental body sectors, not enough applications were submitted by cooperative electric companies, so the department awarded just $609.2 million in bond authority in that area.
While most bond authority created by the ARRA was allocated immediately to state and local issuers, CREBs are unique in that the Treasury does not allocate its authority, but rather the Treasury reviews and approves applications for projects seeking to be financed with the bonds.
In guidance released in April outlining the new CREB authority, the Treasury included a sample application, which requested information on the following: the issuer, a project description, the owner of the facility, the project’s location, a financing plan, the amount of CREBs requested, a demonstration that the project is a “qualified renewable energy facility,” and an independent certification from an engineer that the project meets that definition, is technically viable and will produce electricity.
Applicants had to include information on whether they had previously received CREB allocations on any related projects.
Governmental bodies in 17 states requested allocations for a total of 739 projects. California issuers received the lion’s share of allocations, for $640.5 million in bonds, spread across 582 projects. The largest single project requested in this segment of the applicant pool totals $2.693 million, for a solar project in the Oakland Unified School District. For governmental bodies and cooperative electric companies, CREB allocations are awarded from smallest qualified project to largest.
In the public power provider sector, 35 total projects across six separate states received allocations. Issuers in the state of Washington received the largest total allocation, as $499.84 million of bond authority was approved for 11 total projects. A wind project planned by the Iowa Agency for Municipal Wind received the largest single allocation of $128.54 million.
Cooperative electric companies requested bond authority for 31 projects across 18 states. Alaska issuers received the largest allocation in that sector, totaling $124.6 million for three projects. The largest single allocation of $100 million went to the Oglethorpe Power Corp. for a biomass project in Georgia.
CREB allocations from the Treasury are valid for three years, after which any unused authority will revert back to the Treasury and be reallocated to other projects.
Issuance of CREB bonds in 2008 consisted of five deals totaling $45.4 million, while so far in 2009 there have been two deals sold totaling $45.3 million, according to data from Thomson Reuters.
