Clean Power Alliance has completed a $963 million energy prepayment bond transaction that is expected to generate $66.6 million in renewable energy cost savings over the bond’s initial 10-year period.
The latest financing marks CPA’s sixth prepay bond issuance and brings the organization’s total bond program to $6.9 billion. Across all six transactions, CPA has secured $427.9 million in initial-period savings, averaging approximately $52 million annually for the communities it serves.
CPA Chief Executive Officer Ted Bardacke said the transaction strengthens the agency’s ability to provide affordable, stable, clean energy across Southern California.
“Each prepay transaction strengthens our ability to provide stable, affordable, clean energy to the communities we serve,” Bardacke said. “This sixth bond builds on a proven strategy that delivers meaningful savings while supporting long-term investments in renewable energy and grid reliability.”
How the Prepay Bond Program Works
As a not-for-profit government agency, Clean Power Alliance can issue tax-exempt bonds to prepay for renewable energy supplies. In exchange for upfront payments, energy suppliers provide electricity at discounted rates, historically ranging between 8 percent and 12 percent below market prices.
The savings are passed on to customers through stable electricity rates. CPA also reinvests cost savings into customer programs, workforce development initiatives, skills training, and community energy infrastructure projects.
The bond program plays a central role in CPA’s long-term strategy to deliver competitively priced, reliable, carbon-free power while strengthening regional energy resilience.
First Transaction with Morgan Stanley
The latest bond marks CPA’s first prepay transaction, with Morgan Stanley serving as underwriter and Morgan Stanley Capital Group as the prepaid energy supplier.
The bonds received a Baa1 investment-grade rating from Moody’s and were designated as Green Bonds by Kestrel.
During the bond’s initial 10-year period, CPA will receive approximately 543,000 megawatt-hours of PCC1-eligible renewable energy annually. PCC1 represents the highest-tier category of renewable energy under California standards.
CPA Chief Financial Officer David McNeil said the transaction reflects the strength of the agency’s financing approach.
“By leveraging favorable financing structures and strong counterparties, we are able to secure long-term cost savings that directly benefit our customers,” McNeil said.
Strengthening a Diversified Renewable Portfolio
Energy delivered through the transaction will come from a portfolio of long-term power purchase agreements totaling 214.5 megawatts of geothermal, wind, and solar-plus-storage resources.
This diversified mix supports CPA’s commitment to reliable, carbon-free power while helping reduce exposure to volatility in the wholesale energy market.
Long-Term Strategy for Affordability
The bond issuance follows a November 2025 authorization from CPA’s board allowing up to $4.5 billion in additional prepay transactions through June 30, 2027.
CPA officials said they will continue evaluating financing opportunities that enhance financial stability and support their mission to provide clean, reliable, and affordable electricity.
