Bangkok--23 Sep--Standard & Poor's
(Editor's note: The assigned rating was misstated in the article published June 12, 2009. A corrected version follows.)
Standard & Poor's Ratings Services assigned its 'A+' long-term rating, with a stable outlook, to Utah Associated Municipal Power System's (UAMPS) revenue and refunding bonds (Central--St. George Transmission Project) series 2009.
In our opinion, the rating reflects the financial strength of four participating utilities, with adequate financial margins and cash reserves; an expanding service area that has benefited from residential growth in recent years; operating strengths that include access to UAMPS' power resources; and the high-performing nature of transmission assets.
The bonds are secured by a net revenue pledge of UAMPS' Central--St. George project. Bond proceeds will be used to refund existing debt and provide new financing for Phase 3 enhancements to transmission infrastructure in Washington County, consisting of a 21-mile long, 138-kilovolt double-circuit transmission line between Utah's Central substation and the St. George substation, which dates back to 1990. Pre-existing debt for the project consists of three series, from 1997 to 2003, with total principal outstanding of $31 million.
"We expect that each project participant manages its entitlement share while maintaining reasonable financial margins," said Standard & Poor's credit analyst Ian Carroll. "We also expect that project payments are sufficient to meet debt and operating costs."
Four utilities, all located in Southwestern Utah's Washington County, take transmission from the UAMPS' Central--St. George project: St. George, Santa Clara, Washington City, and Hurricane. Combined, these utilities serve 41,500 customer connections and a county population of about 137,600. The participating utilities have signed transmission service agreements with UAMPS, and these govern payments for debt service and operations on a take-or-pay basis.
RELATED RESEARCH
USPF Criteria: "Electric Utility Ratings," June 15, 2007
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Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Ian Carroll, San Francisco (1) 415-371-5060
Peter V Murphy, New York (1) 212-438-2065