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San Diego Community Power reports $1.005 billion clean‑energy prepayment sale and projected program savings
Summary
Staff reported results of the second clean‑energy prepayment transaction: $1,005,000,000 in bonds sold, an A2 credit rating from Moody’s for the funding recipient, a top green‑bond score from Kestrel, and projected annual savings that ramp from about $6.1 million up to roughly $16 million by 2030.
San Diego Community Power staff on Aug. 14 presented results from the agency’s second clean‑energy prepayment financing. Jeff Spangler, senior strategic finance manager, said the issuance funded the purchase of long‑term solar energy and is expected to deliver multi‑year savings to customers.
Spangler reported the transaction closed at just over $1,005,000,000 in bond proceeds. The bonds received an A2 rating from Moody’s for the funding recipient and a 5‑out‑of‑5 score on Kestrel’s green‑bond assessment, a designation staff said broadens investor interest in the sale. Spangler said the financing mechanism is a tax‑exempt municipal structure that allows the purchaser to access lower cost capital; the bonds are structured so they are not an obligation of San Diego Community Power itself.
The staff presentation said the transaction will yield an average annual savings of about $6.1 million in the near term, with savings ramping to as much as roughly $16 million by 2030 as the deal’s discount is realized across purchased energy volumes. Spangler said the organization expects these savings to continue through a reset period in the mid‑2030s, at which time staff will evaluate additional issuance opportunities.
Spangler reviewed the board action that authorized the transaction earlier in July: the board approved the financing under four exclusive parameters, including a cap on issuance size and a minimum discount target, and specified total issuance costs not to exceed 1% and that the bonds would not be an obligation of San Diego Community Power. Staff said all authorization conditions were met.
Committee members asked technical questions about investor composition, the minimum order size and how additional prepayment opportunities would be tied to future power purchase agreements. Staff replied that orders ranged from smaller retail‑sized investments to institutional purchases, that the transaction attracted investors seeking high‑rated green bonds, and that the number of future prepayment transactions will depend on the volume and timing of power purchase agreements coming online over the next three to five years.
Spangler concluded that the transaction generated favorable press coverage and that staff will continue to evaluate opportunities to expand prepayment savings as new contracted resources enter service.
