The board on June 26 adopted Resolution 2025‑07 authorizing staff to pursue a second clean‑energy prepayment bond transaction using the California Community Choice Financing Authority conduit structure, subject to defined economic and issuance parameters.

SDCP strategic finance manager Jeb Spangler and CFO Dr. Eric Washington explained the transaction replicates the conduit prepaid model SDCP used in November 2024. Spangler said the structure uses investor bond proceeds to prepay energy deliveries and, in exchange, SDCP would buy the prepaid energy at a discounted price that yields cash‑flow savings for customers.

Spangler described projected savings based on current market conditions: "Based on current market conditions, we anticipate annual savings of over 4 and a half million, which is roughly 8% of the procurement cost for the assigned volume." He noted savings from the 2024 transaction are already material: SDCP expects about $53 million total between 2025 and 2032 and has realized more than $2 million year‑to‑date in 2025.

Key parameters the board approved require that any sale not exceed $1.5 billion in bond issuance, net savings equal at least an 8% discount of the assigned fixed cash flows (or equivalent $/MWh benefit), and total issuance costs not exceed 1% of bond proceeds. The resolution also notes that the bonds are not obligations of SDCP; the debt structure places repayment responsibility with the bond transaction counterparties.

Why it matters: Staff said prepaid transactions are one of the few levers the agency can use directly to reduce procurement costs and protect ratepayers. If executed as modeled across multiple transactions, staff estimated annual savings that could grow into the tens of millions by 2030.

Board discussion included thanks to staff for education on the transaction structure and a motion to adopt the resolution carried by roll call.

The resolution authorizes staff to execute agreements and form documents for the prepay transaction if the economic and issuance conditions in the resolution are met; staff said, if market conditions permit, they could seek to sell bonds in early to mid‑July 2025.