PUC authorizes inaugural Power Enterprise revenue bond program; explores green bond label

The Commission voted to authorize creation of a Power Enterprise revenue bond program and to proceed with documents and ordinances needed for a spring bond sale.

Charles Pearl, Deputy CFO and interim CFO, described the new Power Enterprise financing structure and said the first issuance would be relatively small—staff referred to a first sale in the roughly $45 million range and an authorization ceiling referenced in materials of $48 million—to fund priority power projects (about $29 million for powerhouse and generator work, ~$5.8 million for transmission and distribution, and roughly $3 million for switchyard/substation items). Pearl said the administration plans to fund a reserve for the inaugural sale sized at up to 100% of maximum annual debt service to secure favorable market pricing.

Pearl also discussed the possibility of a 'green bond' designation for parts of the issuance, explaining market advisors do not guarantee better pricing for the label but that many green bond sales have attracted strong investor interest nationwide. He said the PUC would set up internal procedures to document that bond proceeds were spent on projects that "generate and transmit greenhouse-gas‑free electricity" and that, if investor concerns arise, projects not acceptable to the green designation could be carved out into a non‑green subseries.

Wholesale customer representatives (BOSCA) raised concerns that the bond official statement included a large amount of potential joint project spending (presented as $822 million in the CIP list) and said cost‑allocation and classification of some joint projects remained unresolved; BOSCA representatives asked that unresolved allocations be clarified in the official statement prior to sale. The Commission voted to proceed with the program and to submit the necessary ordinances to the Board of Supervisors for approval and to return with the final offering documents before marketing the bonds.