MMWEC has issued more than $4.4 billion in bonds to finance and refinance its 720-megawatt ownership interest in five major generating plants.
MMWEC’s enabling legislation, Chapter 775 of the Acts of 1975, empowers MMWEC to issue tax-exempt revenue bonds to finance ownership interests in energy facilities to meet the needs of its Project Participant utilities. Typically, MMWEC creates a Power Supply Project to represent an ownership in interest in an energy facility and invites utilities to participate in the Project based on their energy needs.
Power Sales Agreements
The output of MMWEC-owned energy facilities is sold to Project Participants through take-or-pay Power Sales Agreements (PSAs) that obligate Project Participants to pay their proportionate share of all Project costs, which include the debt service on MMWEC bonds, project operating costs and MMWEC administrative costs. The PSAs constitute an unconditional obligation of Project Participants to pay their share of Project costs without regard to whether the related facility is undertaken, completed, operable or operating.
Authorized Debt Instruments
In addition to issuing tax-exempt revenue bonds, MMWEC is authorized to execute various other debt instruments for a variety of purposes. For example, MMWEC maintains a Working Capital line of credit to finance its Members wholesale power market obligations as well as a line of credit to finance fuel purchases for its Stony Brook Energy Center.
Pooled Loan Program
A 2009 amendment to MMWEC’s enabling legislation also allows MMWEC to create a “pooled loan program” for Members to finance a wide array of very broadly defined “energy” facilities, from substations and distribution system improvements to metering and energy efficiency projects.