LOS ANGELES - A new joint powers agency to help fund conservation-related projects for California utilities could be operating by early next year, according to local officials working on the plan.
"We think there's going to be a great deal of interest" in the concept, said Bill Carnahan, the public utilities director of Riverside.
A task force of local utilities expects this week to announce the hiring of a financial adviser who will help determine the feasibility of assorted financing concepts for the joint agency.
The joint agency's formation reflects the growing role of electric and water utilities in encouraging conservation and promoting other demand-side projects, said Stuart Wilson, assistant executive director of the California Municipal Utilities Association.
Utilities have generally focused borrowing efforts on supply and resource-development projects, Wilson said. Now, however, "people sense that there's a genuine need" to explore similar financing activities for conservation, efficiency, and water reclamation efforts, he added.
In particular, utility officials believe it makes sense to treat such activities on the same footing as other capital expenditures. Based on that logic, the joint powers authority could foster bond sales that match financing maturities with the useful life of conservation and efficiency projects.
The utilities group is assisting in implementing the joint powers agency, but the new authority would operate independently once it is running, Wilson said.
Membership will be open to utilities throughout the state, even those that do not belong to the Municipal Utilities Assocation.
The joint powers agency will be called the California Financing Authority for Resource Efficiency, otherwise known as CalFARE.
R.W. Beck and Associates will serve as the agency's engineering consultant, Carnahan said. The task force also has asked for proposals from law firms for a general counsel. Those proposals are due Nov. 16, and the task force hopes to conduct interviews in early December, Carnahan said.
Once a general counsel is on board, utility officials can finalize bylaws and operating agreements for the joint powers authority, Carnahan said. Those tasks should be completed by early next year, he added.
The new agency should serve as "a lot of things to a lot of different people," according to Carnahan.
Some entities, for example, anticipate creation of a bond bank through the agency to finance smaller individual projects.
Larger utilities also are interested in joint borrowings involving "some of the big-ticket items" such as major wastewater recyling projects, Carnahan said.
A joint powers authority may provide flexibility for off-balance sheet financings that otherwise are difficult to accomplish given existing bond covenants and other charter restrictions affecting certain municipal utilities, Carnahan said.
Aside from financings, "we see a lot of possibilities for joint cooperation" in other areas, he added.
For example, the genesis for the resource efficiency authority came in meetings in which utility officials shared ideas for encouraging customers to purchase ultra-low flush toilets, Carnahan said.
Utilities might avoid the problem of "reinventing the wheel" in these areas if they have a vehicle for sharing information, he said.
Wilson said the authority also could help members achieve economies of scale through joint-purchase contracts for materials and services.