SunEdison Falls. Yieldcos Rise.

In May 2015, SunEdison was the largest renewable energy developer in the world. The solar and wind company is headquartered in California, with projects worldwide. Now, almost a year later, the company’s stock price has plummeted from $30 per share in May 2015 to about $0.22 per share. The company recently declared bankruptcy on Thursday April 21. What caused this dramatic fall?

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Costs, Benefits or Function – What really drives water reuse?

Guest Post by Lars Hanson

For utilities across the country, water reuse has been attracting a great deal of attention recently, and with good reason. As utilities and the communities they serve grow and mature, they find themselves managing increasing pressures relating to water availability, competition, customer service needs, and evolving regulations. These pressures require the Water Resources Utility of the Future to begin paying more attention to the interrelated nature of the core water management functions, including water supply and treatment, wastewater collection and treatment, stormwater management, and flooding and flow management. In addition to more coordinated planning, new ways of managing water will be needed to coordinate these functions. Water reuse is one water management tool that allows linking these functions, while also potentially providing a financial return when reclaimed water is sold.

But what is water reuse anyway? Water reuse, often referred to as water recycling or water reclamation (and hopefully not ‘toilet-to-tap’), is a general term referring to the treatment of a ‘used’ water source followed by subsequent beneficial use. Simple enough, but that definition perhaps oversimplifies the huge range of water reuse system concepts, and why water reuse projects are built.

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Four Keys to Creating a More User-Friendly Financial Statement

There will probably never be a time that financial statements, like Comprehensive Audited Financial Reports (CAFRs) and Annual Financial Reports (AFRs), are going to be as exciting as the New York Times latest bestseller. They are usually long documents and can be a little intimidating at first. However, a good financial statement is full of important information that can describe the financial well-being and sustainability of a utility. This blog post is a suggested guide to highlight a few important components of financial statements and why they should be included in each CAFR and AFR.

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The Name’s Bond, General Obligation Bond

On November 3rd, 2015 the Town of Chapel Hill, NC passed a bond referendum that appropriated $5.2 million for solid waste facilities and $5.9 million for stormwater improvements. Both were General Obligation (GO) bonds where the town pledged its full faith and credit via taxing authority to repay the debt over a specified term. General obligation bonds are regarded as “safer” than bonds backed by a single revenue source, and generally command lower interest rates and lower reserve fund requirements. A bond is a written promise to repay borrowed money on a defined schedule, usually at a fixed rate of interest, for the life of the bond. Bonds represent a large source of capital, but can be a complex and more expensive way to borrow. The high expense results from the legal and other fees and administrative time required for issuing bonds.

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Paying for Unused Capacity: Interlocal Agreements using Capacity Allocations

Constructing, maintaining, and upgrading water infrastructure entails large costs for local governments that can end up impacting budgets for years. The long lifespan of these projects often require development to be based on needs projected decades into the future, leaving significant excess capacity that must be paid for, but not used, in the interim.

Communities looking to help cut costs and reduce risk may be able to capitalize on this excess capacity by partnering with their neighbors via interlocal agreements to share infrastructure. These agreements can take many forms – joint ownership, interruptible purchase agreements, the formation of new semi-governmental entities – but their ultimate function is to spread the costs of unused capacity across a broader base of users, making them easier to finance. In order to develop equitable cost sharing agreements, interlocal agreements often rely on estimates of growth to determine who will use capacity in the future. It can be difficult to make longterm projections, and when the assumptions that form the foundation for an interlocal agreement turn out to be incorrect, one or more partners could be stuck with unanticipated liabilities.

This implicit risk could be a disincentive for communities to enter into interlocal agreements. As with any risk, managing it requires understanding it as much as possible. This is the first in a series of posts that examines how the allocation of unused capacity distributes risk among the partners in different types of interlocal agreements. Here we look at two examples of how unused capacity is paid for when infrastructure is shared through capacity allocations.

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