Clean Renewable Energy Bonds

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• Clean Renewable Energy Bonds
• Susan Pettit
• Principal, Government Relations
• February 9, 2005

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2003 Comparison of Capital Cost of Generation
Resources
Capital Cost /kW
MSW/ LFG
Scrubbed Coal
Nat.Gas
Wind
Biomass
Geo
Solar
Photovoltaic
This does not include the interest cost of funds
used during construction
Source EIA Assumptions for Annual Energy Outlook
2004
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Renewable Portfolio Standards (RPS)
SOURCE Database of State Incentives for
Renewable Energy www.dsireusa.com
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Nameplate Capacity All Generation Sources
4.1
IOUs
7.3
Non-Utilities
9.8
Muni
40.9
Federal
37.9
Co-op
Sources Energy Information Administration Form
EIA-861 for generation, Form EIA- 860 for
capacity, including adjustments for joint
ownership. Data do not include U.S. territories.
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Nameplate Capacity Renewable Generation
IOUs
Non-Utilities
3
Muni
94
lt1
1
Federal
lt1
Co-op
Source RDI date as of April, 2005 (EIA Form 860)
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Co-op Green Power
There are nearly 300 rural electric systems that
offer Green Power
Source Power On-Line Survey 2003, NREL and
CRN NRECA Strategic Analysis, August 2004
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Municipal Revenue Bond
Bondholders
Bond Proceeds
Principal
Interest (Tax Exempt)
Issuer (Municipal Utility)
Bond Proceeds
Revenues
Renewable Project
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Clean Renewable Energy Bond
Tax Credit (in lieu of interest)
Bondholders
Bond Proceeds
No Interest

Principal
Issuer (Co-op, Co-op Lender or Municipal Utility
)
Bond Proceeds
Revenues
Renewable Project
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Key Features of the Bond

• Eligible resources include
• Wind
• Closed-loop biomass
• Open-loop biomass (including livestock waste)
• Geothermal
• Solar
• Municipal solid waste (including landfill gas and
  trash combusion)
• Small irrigation power
• Hydropower

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Key Features of the Bond

• Available to cooperatives, cooperative lenders,
  government bodies, Indian tribes
• 800 mill. in authority over two years
• 300 mill. minimum reserve for co-ops
• Up to 15 years in term as determined by a formula

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Key Features of the Bond

• 95 of proceeds must be spent within five years
• You may reimburse yourself for project costs
  incurred up to 18 months prior to bond issuance
• Board action -- official intent to reimburse --
  required prior to and after incurring the expense

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Regulations -- Notice 2005-98

• April 26, 2006 deadline
• Application must include engineers certification
• Allocation smallest to largest request
• Credit rate tied to corporate AA bonds
• Question related and subordinate facilities?

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Look Ahead

• Expires January 1, 2008. Must begin immediately
  to extend and possibly expand.

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CREBS vs the PTC

• Is the CREB as valuable as the PTC for wind?

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Other Financing Considerations

• REPI
• Section 9006 Grants
• Renewable Energy Credits
• State incentives