Paducah Power gets A- rating from S&P
Paducah Power System received an A- rating from Standard & Poor’s Rating Services Monday.
It’s being hailed a positive development in PPS’s rate recovery efforts. The utility made the move to S&P after receiving a lower rating, BBB, from Fitch Ratings in December 2014.
The rating means lower interest rates for Paducah Power, which will save the company money.
Here is the full news release from Paducah Power:
Standard & Poor’s Rating Services (S&P) today announced an “A-” credit rating for Paducah Power System. The decision comes less than two weeks after S&P gave the same rating to the Kentucky Municipal Power Agency (KMPA) and is hailed by PPS management as a positive development in the utility’s rate recovery efforts.
“This is very good news for us,” said PPS General Manager Gary Zheng. “The rating sends a message of confidence to the vendors we do business with and to potential business partners who may be interested in buying or leasing our excess power generation,” Zheng said.
The PPS Board voted last week to pursue the S&P rating with the hope of receiving a rating similar to KMPA’s since PPS makes up 84% of KMPA. Paducah Power’s finances were heavily reviewed during the KMPA rating.
PPS has traditionally been rated by Moody’s Investors Service, Inc. and Fitch Ratings. Earlier this month, Moody’s downgraded Paducah Power one notch from “A3” to “Baa1” with a “stable” outlook, which was more favorable than the “BBB” adjustment given to the utility in December by Fitch.
“We felt as if the Moody’s decision showed confidence in our Rate Recovery Plan,” said Zheng. “This latest decision by S&P affirms the caliber of the plan and puts us one step closer to our goals.”
Since November Paducah Power has implemented key elements of the utility’s Rate Recovery Plan: replacing debt service reserve funds with surety bonds and hiring a new portfolio manager to better manage power sales and purchases. The goal of the plan is to stabilize PPS’s finances and save approximately $4.7 million in the current fiscal year in order to provide rate relief for customers July 1st.