Rating company places Paducah Power bonds on watch list
A bond rating company has placed some of Paducah Power’s A-rated utility bonds on its negative rating watch list.
According to the release from Fitch Ratings, and phone conversations with one of its representatives, being on the watch list is a result of Paducah Power’s constrained financial position and its bonds could be downgraded 50 percent over the next 6 months.
We’re told a lower rating is a measure of Paducah Power’s credit risk and a red flag to bond holders that they could lose all or part of their investment.
This all began when Paducah Power dropped service from TVA and bought into the Prairie State Power Plant in southern Illinois. When this was first announced, Fitch gave Paducah Power an A rating based on its sound financial performance and comparable rates. But since the actual changeover in 2014, customers have been paying unusually high power bills, some of the highest in the country.
This negative rating for Paducah Power comes just before the board’s meeting to discuss a “rate recovery plan” at 1 p.m. Wednesday afternoon. We will be there and will tell you how all of this might impact your bill tonight on Local 6 at Five.