Paducah Power said to be on target with rate recovery plan
Paducah Power System is on track to lower customers’ bills by July first. That’s according to the publicly owned utility’s director of finance and administration.
The pieces of the rate recovery plan are starting to fall into place. At Monday’s board meeting, Finance and Administration Director David Carroll got everyone up to speed on the latest developments.
KMPA bond restructuring was a big part of the discussion. The rate recovery plan lays out this option as a way to reduce debt. Carroll said he talked to a national insurance company interested in helping KMPA refinance $150 million in bonds for a better interest rate.
The plan also calls for a new portfolio manager to find ways to get PPS’s peaking plant going more often as a way to market their assets better. American Municipal Power got the job, and Carroll said they have already used the plant more this winter than last year.
PPS also accomplished a goal for rate recovery by replacing some of their debt service reserves with surety bonds. Carroll said these moves are putting Paducah Power on the right path. “As of right now, we are on target. Now, things can change as we move along. We will try to keep everyone up to date on that,” he said.
The board also voted to get rid of Fitch and start using Standard & Poor for their annual credit rating service. Fitch downgraded PPS’s rating two notches to BBB back in December, but Carroll said he thinks S&P’s rating will be more favorable.
S&P gave KMPA an A-minus with a stable outlook. KMPA is a joint action agency that’s invested in Prairie State, and PPS makes up 84 percent of it. That’s why Carroll said the decision to hire S&P should improve the utility’s credit.
PPS stands to save $2,500 a year by switching to S&P, because their fee is for annual surveillance is less expensive than Fitch’s.