CPUC Eyes Q1 2023 for Broadband Loan Reserve Fund Terms

The California Public Utilities Commission hopes to issue a draft of its proposed broadband loan loss reserve fund program rules by late December or early 2023, to be followed by a comments cycle and a final vote in Q1 next year, said an aide to Commissioner Darcie Houck Tuesday during a virtual meeting of the commission. The $750 million fund's aim is helping local governments, tribes and nonprofits build broadband infrastructure, giving them collateral that leads to better borrowing rates and terms for bonds issued, said Justin Fong, CPUC senior regulatory analyst. During the presentation, Fong laid out staff proposals for the fund terms and what comments the commission had received in response. He said the staff proposal has the reserve fund providing principal coverage of 5%-20% of the project loan's total amount, depending on the perceived risk of the application, with eligible costs including credit enhancement, transaction fees and cost of the guarantor to issue. He said the CPUC had received comments from interested parties recommending varying principal coverage amounts, including up to 80% of project costs that serve unserved disadvantaged communities. He said the staff proposal recommended an applicant prioritization trigger once 80% of the fund is encumbered or the fund balance is less than 30%, but some interested parties said loan loss funds shouldn't be limited just to projects in unserved areas and that prioritization criteria be applied from the program's start.