CREBs' FAQs
Frequently Asked Questions about Clean Renewable Energy Bonds (CREBs)
What are CREBs?
How do CREBs work?
What were the results of the 2006 CREBs cycle?
Did Montana cities, counties or tribes apply for the 2006 round?
Why would my community apply for the right to issue CREBs?
Do the projects make financial sense?
When will project feasibility studies occur?
Don’t I need to perform a project feasibility study prior to making my CREB allocation request?
What other items does my CREB application need to contain?
Where will I site my project?
Who will own my CREB project?
What is the timeline for pulling my CREB application together?
When can MFE begin work on my CREB application?
How much does MFE charge for preparing and submitting a CREB application?
I’m interested, what’s next?
What are CREBs?
Clean Renewable Energy Bonds (CREBs) were created by the Energy Policy Act of 2005 by US Senators Baucus (MT) and Grassley (IA).
The 2006 CREB cycle allocated $800M in CREB authority, with $500M for cities, counties, and tribes, and $300M for rural electric co-ops.
The IRS recently announced that a 2007 CREB cycle totaling $400M ($250M for cities, counties, and tribes; $150M for co-ops). 2007 CREB Applications were due to the IRS on July 13, 2007.
How do CREBs work?
CREBs provide cities, counties, school districts, and tribes with the ability to obtain interest-free financing for renewable energy projects by providing investors with a federal tax credit in lieu of interest payments.
Subsequently, CREBs provide an interest free source of money to fund local government-owned renewable energy projects.
What were the results of the 2006 CREBs cycle?
The IRS received 743 CREB from 40 states totaling $2.1B in allocation requests (2.5 times what was available).
610 projects were ultimately approved: 532 city/county/tribal project in 22 states ranging from $23,000 to $3.2M; and 78 co-op projects in 24 states ranging in size from $120,000 to $31M.
Did Montana cities, counties or tribes apply for the 2006 round?
Yes, MFE submitted CREB applications on behalf of 35 MT cities and counties. 33 of these 35 applications were approved by the IRS to issue CREBs, totaling 34 MW of wind power projects ($30.6M). No Montana tribes applied for the 2006 CREB cycle.
Why would my community apply for the right to issue CREBs?
If you are seeking additional revenue sources to fund your local government budgets, or are seeking to offset your electrical or energy usage, CREBs present a source of interest-free moneys to fund your renewable energy project. Eligible projects include wind, solar, geothermal, and biomass systems, among others.
Do the projects make financial sense?
To issue and sell your CREBs, your project must make legal, technical, and financial sense. Subsequently, only when project feasibility studies confirm your project makes legal, technical, and financial sense you will an investor to purchase your CREBs and your project will move forward.
When will project feasibility studies occur?
MFE recommends holding off on project feasibility studies until after the IRS has determined if you are eligible for a CREB allocation. If your CREB allocation request if approved, MFE will work with you to determine the most efficient method of assessing your project feasibility.
Don’t I need to perform a project feasibility study prior to making my CREB allocation request?
No; The IRS does not stipulate that you need to perform full-blown feasibility studies (which typically take 6-12 months to complete) prior to applying for a CREB allocation. The IRS does require, however, that your Application contain a certification by an independent, licensed engineer that your project is technically viable.
What other items does my CREB application need to contain?
In addition to an independent, licensed engineering certification letter, your Application must also detail your CREB issuing authority, project description, regulatory approval plan, and financing plan.
Where will I site my project?
The process of determining where to locate your project will require assessing available energy resources (e.g. wind, solar, biomass, geothermal, etc), transmission access/capacity, and energy sales options. Subsequently, MFE will determine the site after your feasibility studies are completed.
Who will own my CREB project?
The project that is built using your CREB allocation and will be 100% owned by you.
What is the timeline for pulling my CREB application together?
Pulling the necessary components together for your CREB application is a complicated process that will take at least one month. Subsequently, getting going on your application sooner than later is critical.
When can MFE begin work on my CREB application?
MFE will be working on preparing CREB applications for clients throughout the Western US in March, April, May, and June. We will stop accepting CREB applicants on June 15 in the year of the application (e.g. June 15th of 2006 for 2006 CREBs’ cycle) to allow adequate time for the mid-July CREB application deadline.
How much does MFE charge for preparing and submitting a CREB application?
MFE’s fee for preparing and submitting your CREB application starts at $1,000.
I’m interested, what’s next?
Call or email MFE to begin discussing your CREB project.
MFE’s CREB Administrator is Ann Baggett. Ann can be reached at (406) 556-9828, or by email to a.baggett@matneyfrantz.com.
