Energy as a service and municipal bonds – What you should know

Energy as a Service (EaaS) transactions are a category of innovative delivery model transactions that focus on the design, construction, financing and long-term maintenance and operations of energy assets, central utility plants, and energy efficiency improvements, as well as energy production and distribution. The energy production can be traditional or renewable. This is a mechanism for large facilities or campus owners to transfer the risk of delivering all of its heating, cooling, water, and energy operational services for a guaranteed level of service and energy savings to an expert that has the singular focus in delivering these types of projects for clients nationally and internationally.

In this second annual webinar on EaaS Orrick lawyers and finance professionals discuss the most common legal and document structures for these types of EaaS transactions utilized by governmental issuers and nonprofit borrowers of tax-exempt bonds, federal tax compliance for existing and future tax-exempt bonds, the way these transactions are treated under existing bond documents and key EaaS benefits and considerations for issuers to keep front-of-mind when evaluating the suitability of a potential transaction.

We examine two innovative energy transformation projects recently undertaken by Henry Ford Health and Adventist Health. Both projects employed an innovative not-for-profit tax-exempt financing solution, a first for such applications, aiming to minimize capital expenses and enhance the overall project scale.