SACRAMENTO MUNICIPAL UTILITY DISTRICT
SMUD launches Green Commercial Paper program

Sacramento Municipal Utility District (SMUD) (AA) successfully launched the first Green Commercial Paper (CP) notes issued by any U.S. municipal electric utility. Barclays was the sole dealer for the $25M new money tax-exempt Series L CP, which was issued on April 29, 2025 for a tenor of 36 days at a rate of 3.15% and attracted one new impact fund investor. The issuance was also the first to carry the new Kestrel-Verified Green Commercial Paper Certificate, an independent external review from Kestrel, the leading verifier of green bonds in U.S. public finance.

The participation of a new buyer was a positive signal, particularly given the broader market dynamics following the April tax season. During that period, elevated redemptions from money market funds created temporary pressure in the short-term tax-exempt market, with commercial paper rates rising to the 3.5%-4% range.

SMUD has the most ambitious clean energy goal of any large utility in the United States. With a commitment to 100% zero carbon by 2030 15 years ahead of California's 2045 mandate SMUD is a national leader in decarbonizing electric power generation. SMUD will use proceeds from the Green CP notes to fund improvements to generation, transmission and distribution systems. The projects improve efficiency and reliability of the electric system, reduce greenhouse gas emissions and support SMUD's clean energy transition.

"SMUD is leading California's clean energy transformation through our 2030 Zero Carbon Plan, and we're committed to making that transition equitable and affordable for all our customers," said SMUD Chief Financial Officer Scott Martin. "This Green Commercial Paper issuance is more than a financial tool it's a reflection of our long-term commitment to clean energy innovation, community impact and maintaining some of the lowest rates anywhere in California. The certification recognizes the strength of our strategy to deliver carbon-free energy in a way that benefits everyone we serve."

SMUD issued an additional $25M of Green CP notes on May 6, 2025 for a tenor of 63 days at a rate of 2.9% and expects to issue additional notes under its $400M authorized Green CP program over the next 12 months.

Kestrel-Verified Green CP signals commercial paper aligned with sustainability, transition and resilience objectives. Kestrel's Green Commercial Paper Program Framework establishes standards for issuance of Kestrel-Verified Green CP. The approach follows International Capital Market Association recommendations for Sustainability-Linked Commercial Paper.

"SMUD's green commercial paper ranks in the top 5% of all electric power utilities with a cumulative Sustainability Score of 4.68/5," said Monica Reid, CEO of Kestrel. "The green CP designation was linked to SMUD's Sustainability Scores and verified transition plan. We are honored to have SMUD as the inaugural issuer of Kestrel-Verified Green CP. They add this to their long line of firsts."

About SMUD

As the nation's sixth-largest, community-owned, not-for-profit electric service provider, SMUD has been providing low-cost, reliable electricity to Sacramento County for more than 75 years. SMUD is a recognized industry leader and award winner for its innovative energy efficiency programs, renewable power technologies and for its sustainable solutions for a healthier environment. In 2023, SMUD's power supply was, on average, 78 percent carbon free, and SMUD has a goal to reach zero carbon in its electricity production by 2030. SMUD's rates and customer bills are consistently among the lowest in California, and are today, on average, more than 50 percent lower than its neighboring investor-owned utility. For more information on SMUD's Zero Carbon Plan and its customer programs, visit smud.org.