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Commission approves low-cost State Revolving Fund loans for biosolids and Oceanside digester projects
Summary
The commission authorized two SRF installment loans: $132 million for the biosolids digester facilities (paired with a $699M WIFIA loan) and about $54.3 million for an Oceanside Treatment Plant digester gas utilization upgrade; each loan includes up to $4 million in principal forgiveness and a 30-year maturity at an estimated 1.3% rate.
San Francisco ' The San Francisco Public Utilities Commission approved two low-cost State Revolving Fund (SRF) installment loan agreements on Nov. 12 to finance wastewater enterprise capital projects.
Richard Morales, the PUC's debt manager, presented two SRF loans: a $132,000,000 loan for the biosolids digester facilities project and a $54,300,000 loan for the Oceanside Treatment Plant digester gas utilization upgrade. Morales said both loans include up to $4,000,000 of principal forgiveness and would have a 30-year maturity with an estimated fixed interest rate of about 1.3% — substantially lower than the ~3.5% rate the utility would expect from revenue bonds.
Morales noted the biosolids SRF loan will pair with an earlier $699,000,000 WIFIA loan and together they will provide low-cost funding for roughly 65% of the biosolids project's $1.276 billion cost. Staff estimated combined financing savings of approximately $84 million to sewer ratepayers relative to revenue bond financing.
The commission approved the two SRF loan items in separate voice votes. Commissioners asked questions about the SRF program mechanics, capitalization grants from the EPA, and repayment terms. Staff said the loans are expected to close with the state before the end of the calendar year.
