The Redwood Coast Energy Authority board voted Nov. 24 to authorize staff to develop and negotiate a joint prepaid PPA financing transaction with Desert Community Energy using the California Community Choice Financing Authority (CCCFA) as a conduit issuer.

Tyler Noble of Municipal Capital Markets Group explained the prepay model: existing power purchase agreements (PPAs) are assigned to an energy supplier, a conduit issuer issues tax‑exempt bonds, and the discounted proceeds are passed back to participating CCAs as a lower delivered power price. Noble said California prepays have historically produced double‑digit savings (commonly 10–13%), and staff recommended pursuing a transaction with an authorization threshold of roughly 8% or better for lifetime savings.

Board members raised questions about where savings accrue and who benefits. Directors expressed concerns that underwriters and bondholders capture the tax‑exempt yield and earn fees, while CCAs and ratepayers receive the negotiated discount. Noble and staff said bondholders (tax‑exempt investors such as bond funds) capture tax benefits while banks and underwriters earn transaction fees; the structure is nonrecourse to the CCA, includes unwind protections, and leaves the original PPA in place if a transaction fails.

Staff noted up‑front administrative steps: joining CCCFA (membership fee discussed at about $50,000) and contingent transaction costs (roughly $70,000), most of which would be rolled into bond issuance if a deal is executed. Staff also advised not to pay the $70,000 until terms are better defined. Using a worked example, staff said that an 8% discount on an assigned Sandrine solar+storage contract could yield about $20 million in cumulative savings over the 15‑year delivery term for those contracts.

After discussion, the board voted to authorize staff to proceed with development and negotiation of the prepay transaction and to join CCCFA contingent on satisfactory deal parameters; the motion carried with at least one recorded no vote. Staff will return with negotiated terms, final economic metrics and any required approvals before executing a financing.