San José City Council agreed on April 30 to expand San José Clean Energy (SJCE)’s revolving credit agreement with Barclays Bank PLC from $50 million to $80 million. The increased credit facility will allow SJCE to make additional purchases of clean power into future years, thereby further hedging future electricity costs and maximizing customer savings.
“Our credit facility is another Community Choice financial milestone demonstrating the financial stability of CCAs,” said Lori Mitchell, Community Energy Department Director.
On May 7, SJCE’s neighboring agency Peninsula Clean Energy received an investment grade credit rating from Moody’s Investors Service, following Marin Clean Energy. Their Baa2 ratings indicate a stable outlook and are higher than PG&E’s B2 rating.
“Financial institutions are recognizing the strength of the California Community Choice model. The 19 agencies have achieved strong finances, high community participation, and success in procuring costcompetitive renewable resources, all while advancing California’s climate goals and benefitting our local communities,” added Lori Mitchell.
The agreement with Barclays highlights the fiscal strength and security of the Community Energy Department, a department of the City of San José. While SJCE is part of a large city, this credit facility was achieved due to confidence in SJCE’s financial position.
“Barclays is pleased to support San José Clean Energy’s procurement of renewable energy. Our loan is an indication of our confidence in the financial position of San José Clean Energy and the California Community Choice model – its large customer base and support from local and state elected officials are markers of success,” said John McCray-Goldsmith, who leads the public sector climate change infrastructure finance practice for the western U.S. at Barclays.
To meet San José customers’ increased demand for renewable energy, totaling 2,000 GWh annually by 2022, SJCE currently buys power from existing power plants. SJCE is currently negotiating its first long-term power purchasing agreement (PPA) to build new renewable energy resources dedicated for SJCE customers and will issue a Request for Proposals for additional opportunities.
CCAs are driving California’s renewable energy future. In total, CCAs will build over 10,000 MW of new renewable resources by 2030, compared to less than 1,000 MW pledged by investor-owned utilities.