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School District Eyes Solar Energy
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Riverbank Unified School District has won the right to sell $25 million worth of bonds and proposes to use about half the loan to build a photovoltaic facility producing electricity for its schools.

Officials anticipate the savings in the district's conventional energy costs coupled with rebates would more than pay for the $11 million cost of building the 1,000 kilowatt solar energy plant.

The plan, however, is still tentative, Assistant Superintendent for Business Ron Costa stressed and the school board has still to review more figures and make a decision at the Nov. 3 meeting.

The allocation of $25 million to Riverbank in a Qualified School Construction Bond (QSCB) via a lottery has been approved by the state but the board need not accept the offer.

The district was one of 43 statewide to receive authorization. Over 230 districts submitted applications for the bonds offered as part of the current financial stimulus program.

The QSCB is not a grant, the board has learned from its bond counselors Caldwell Flores Winters Inc. The district must repay the principal over 15 years. The QSCB is a tax credit bond where the buyer gets a tax credit from the state in lieu of interest payments.

The district ideally would pay zero interest on the bonds but this could vary depending on the market, Costa said.

The Treasury Department sets the tax credit on a daily basis. The rate on the day the bond counselors addressed the board was 6.15 percent.

Should the Treasury rate not equal the market rate on the day of pricing, the buyers may request supplemental interest. But the District is under no obligation to accept this request and may choose not to issue the QSCB.

The District can sell back to PG&E any electricity it makes through its photovoltaic panels in excess of its needs. But, Costa noted, the district is not allowed to generate more electricity on one site than that site alone can use. So it cannot construct a central solar energy plant from which to distribute electrical power to all the district's schools.

The plant, in fact, may not amount to more than photovoltaic panels attached to roofs and covered parking lots.

The bond must be issued by Dec. 31, 2009 and the funds spent within three years.

The district does not enter into any obligation until it actually sells the QSCB and does not need to issue the entire $25 million allocation.