Over 800 government agencies and utilities received authorization from the US Treasury to issue $2.2 billion of Clean Renewable Energy Bonds (CREBs).
Funded by the Energy Improvement and Extension Act of 2008 and the Recovery Act, the bonds help government agencies, public power providers, and cooperative electric companies obtain lower cost financing to jump start clean energy development projects.
Energy developers will be able to access lower-cost credit to help them shift to renewable energy production. The Treasury received applications for $1.44 billion in bonds.
The bonds function as tax credit bonds which allow investors to receive federal tax credits in lieu of the payment of a portion of the interest on the bond. For CREBs, the federal tax credits will cover 70% of the interest on the bonds.
The program, however, only benefits companies in some states says Reuters: California, Colorado, Illinois, Massachusetts and Washington. Utilities in Washington have been authorized to issue the most debt – $500 million for hydropower and wind projects.
Cooperative electric companies and government agencies in 17 states received bond allocations.
The Recovery Act raises the volume cap of the bonds, which were created in the Energy Improvement and Extension Act of 2008. Clean energy developers need to apply by August.
Three Alaskan electric associations have $125 million of bonding authority to develop wind projects, while Tucson, Arizona only received about $14 million for solar projects, notes Reuters.
Only $200 million in bonding authority is available for biomass, and most of that is allocated for one project in Georgia. Less than $5 million is allocated for geothermal.
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