CEA continues to explore financing options
The Clean Energy Alliance will use a $400,000 loan from Calpine Energy Solutions to finance operating costs through February 2021.
“I remain optimistic there will be options for us once we get through this tough period,” Ellie Haviland, chair of the CEA’s board of directors, said Aug. 20 after the board voted to issue a promissory note to Calpine.
She added that the $400,000 will serve as a “nice bridge” for the CEA. The agency will begin generating revenue after its tentative May 2021 launch date, when residential and commercial customers start receiving power.
Barbara Boswell, the CEA’s interim CEO, will also return to the board in November with ways to provide more startup funding, after two options fell through earlier this summer.
Over the past few months, the CEA board and staff were considering two potential loans, one from JP Morgan and one from River City Bank, that would have provided $4.5 million. CEA board members and staff zeroed in on the River City option, which would have required the three member cities of Del Mar, Solana Beach and Carlsbad to provide a $2.5 million security.
The Del Mar City Council authorized the city to provide a $75,000 guarantee for that security, and the Solana Beach City Council authorized a $175,000 guarantee. Both totals were commensurate to the load-based shares the cities would receive from the CEA.
After weighing the possibility of offering a $2.25 million guarantee toward the security for the River City Bank loan, the Carlsbad City Council instead gravitated toward another option in which the city of Carlsbad would provide the full loan to the CEA. The council ultimately decided against that option at its July 28 meeting, and the guarantee was off the table by that point as well.
“We were left high and dry without the guarantee to offer,” Carlsbad City Councilwoman Cori Schumacher, who serves on the CEA board, said during the Aug. 20 CEA meeting.
Schumacher, who serves on the CEA board, said during the Aug. 20 CEA meeting that the vacancy on the Carlsbad council might have made the difference. But the fifth council member will not be sworn in until after the November election.
“There might be a different outcome,” she said, referring to the Carlsbad council possibly reconsidering the original two loan options, and whether it would authorize a guarantee. “I just don’t know if this board would be able to wait for that time period.”
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