Chelan seeks $37.7 million in clean energy bonds for hydro

Chelan County Public Utility District declared its intent Aug. 13 to use federal Clean Renewable Energy Bonds to help finance modernization of the 48-MW Lake Chelan and 623.2-MW Rock Island hydroelectric projects.

Commissioners adopted a resolution to use bond proceeds to reimburse the district for modernization expenditures. The district has applied to the Internal Revenue Service for authority to issue $37.7 million in bonds, $26.6 million for Lake Chelan and $11.1 million for Rock Island.

Chelan County PUD’s applications are competing with other applications for $400 million in new bonding authority available for renewable energy projects in a second phase of the Clean Renewable Energy Bond program. The program, authorized by the Energy Policy Act of 2005, provides incentives for non-taxpaying public utilities that develop renewable energy projects, including hydro.

While the deadline for applications passed in July, the IRS has not indicated when it expects to name successful applicants. It took about six months to name winners in a previous round of bonding.

Chelan County PUD was in the initial group of applicants chosen in the program’s first round. It applied in 2006 for $17.45 million in bonds to modernize Rock Island (No. 943), 1,236.6-MW Rocky Reach (No. 2145), Lake Chelan (No. 637), and 200-kW Stehekin projects. It received authority to issue bonds for $1.25 million for work at Stehekin, but nothing for the other projects. (HNN 12/12/06)

Congress is considering whether to provide additional funds to enhance the bond program. (HNN 8/6/07) House-passed energy legislation would authorize $2 billion for the program, but the Senate has not adopted similar provisions. Differences in their bills are to be worked out in joint conference committee after Congress reconvenes in September.

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