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PUC authorizes pursuit of up to $62M lease financing for advanced meters
Summary
The Commission authorized staff to pursue lease financing through the state G‑SMART program or alternative shorter‑term mechanisms (up to $62 million, term not to exceed 20 years) for the automated meter infrastructure project; payments were already assumed in adopted retail rates.
The Commission on June 23 authorized the general manager to negotiate and execute lease financing for the automated meter infrastructure (AMI) project, approving the form of a lease‑purchase agreement and permitting staff to select a lender and financing alternative.
Todd Reedstrom, identified as chief financial officer and assistant general manager, reviewed the AMI procurement and financing history and said lease financing through the California G‑SMART program is a commonly used municipal vehicle that can provide competitive rates and terms aligned to equipment useful life. "What we're asking for you today is the approval to explore the lease financing option up to $62,000,000 for a term not to exceed 20 years," Reedstrom said.
Staff explained lease financing is typically used for long‑lived capital assets and can be structured at shorter maturities than long‑term bonds; AMI modeling suggests targeting roughly a 12‑year match to meter useful life but the Commission authorized up to 20 years while retaining flexibility to choose the least‑cost option (commercial paper, lease, or bond wrap) consistent with previously adopted retail rates.
No members of the public spoke on the item. Commissioners approved the motion; staff will return with final financing documents to the Board of Supervisors as required for contracts above $10 million and proceed to finalize lender selection and lease documentation.
