Treasury Department Allocates $2.2 Billion
in Bonds for Renewable Energy
EERE Network News - November 4, 2009
The U.S. Department of Treasury announced on October 27 a new allocation
of Clean Renewable Energy Bonds (CREBs) totaling $2.2 billion for 805
recipients across the country. These energy bonds are designed to help
government agencies, public power providers, and cooperative electric
companies obtain low-cost financing for clean energy development
projects. Drawing in part upon funds from the American Recovery and
Reinvestment Act, the bonds function as "tax credit" bonds, which means
that the bondholders receive a federal tax credit in lieu of a portion
of the interest on the bond. That, in turn, keeps the interest payments
low for the project owner. For this round of CREBs, the federal tax
credits will cover 70% of the interest on the bonds. Because the
Treasury Department has a limit on the tax credits it can provide to
such CREBs, it must allocate the bonds in advance.
For the current round of CREB allocations, eligible agencies and
organizations had to apply to the Treasury Department by August 4.
Overall, the amounts and recipients selected included: $609 million to
be issued by power co-ops in 17 states, topped by Alaska with a total of
$124 million for wind power projects; $800 million for governmental
entities in 17 states, headed by California governments authorized to
allocate $640 million in bonds for a variety of solar and hydroelectric
projects; and $800 million for public power providers in six states, led
by Washington state utilities, which can issue almost $500 million in
bonds for various wind and hydropower projects.
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