Fitch Ratings said March 16 that Anaheim Public Utilities is looking to add in 2016 about 20 MW of new biomass-fired generation through a power purchase deal.
Fitch said it has assigned an ‘AA-‘rating to the approximately $50 million second lien qualified obligation revenue bonds, series 2015-A issued by the California Municipal Finance Authority (CMFA) on behalf of Anaheim Public Utilities (APU). The bonds are scheduled to price on April 9 via negotiation. Proceeds will be used to finance the acquisition and construction of additional electric system capital assets and to pay the cost of issuance.
APU provides retail electric service to 115,674 customers within the city of Anaheim, California. The electric system was noticeably affected by the recession, however recent years show signs of recovery, as evidenced by growth in retail energy sales, somewhat tempered by weather-related fluctuations, Fitch noted.
The state’s renewable mandate and greenhouse gas legislation require APU to implement changes to its predominately coal-based power supply. APU operates and manages a resource mix that is made up of city-owned and jointly-owned resources, along with transmission and distribution facilities. The current resources are predominately coal-based, which accounted for 46% of energy supplied in 2014. The remainder of 2014 energy supply was natural gas (21%), renewable (25%), large hydro (1%) and market purchases (7%).
“Management has been focused on diversifying its resource mix since 2007, when APU sold its 70-MW interest in the San Onofre Nuclear Generating Station,” Fitch wrote. “Diversification emphasis has been on increased generation from natural gas and various renewable resources. The utility anticipates a new biomass contract should come online in early 2016. APU will enter a 20-year agreement to purchase the full output from a 20 MW renewable energy plant being built at the county landfill in Irvine, CA. APU has added 31 MW of renewable power over the past two years and the baseload biomass contract is part of the utility’s long-term plan to move away from its coal reliance.”
Said a fact sheet on the APU website: “Anaheim receives renewable energy from the nearby landfill in Brea, California. The waste releases methane gas as it decomposes which is then used to create electricity. The electricity is then provided back to the Anaheim power grid. In the near future we will be adding an additional 20 MW from the Bowerman Landfill in Irvine, California.” The fact sheet later added: “We have signed a second large landfill gas project that converts trash to energy, located in Irvine California that will produce 20 MW of renewable energy.”
Anaheim has a goal to reach 33% green power in its overall energy portfolio by the year 2020.