Bonds and Financing

Alameda Municipal Power earns credit rating upgrade from S&P

California public power utility Alameda Municipal Power on March 7 earned a credit rating upgrade from Standard and Poor’s Global Ratings based on the utility’s strong financial performance.

The upgrade moves Alameda Municipal Power’s S&P rating from A+ to AA-. S&P noted in a statement that Alameda Municipal Power has a stable financial outlook with strong liquidity.

S&P said the rating reflects its opinion of Alameda Municipal Power’s “very strong enterprise and financial risk profiles.”

The rating agency said that the solid enterprise risk profile reflects its view of the public power utility’s very strong operational management assessment, highlighted by the purchase of electricity from a diverse asset portfolio in terms of the number of shafts and fuels, including as a member of the Northern California Power Agency.

It noted that a majority of Alameda Municipal Power’s electricity comes from zero-carbon emitting resources. Moreover, Alameda Municipal Power “has an experienced management team that annually produces 10-year financial projections and has financial metric guidelines for debt service coverage and operating cash reserves.”

Also, S&P cited robust service area economic fundamentals, reflected by the utility collecting approximately 40% of its revenue from residential customers, no customer concentration and access to the broad and diverse San Francisco Bay Area economy.

S&P said that two other factors contributing to Alameda Municipal Power’s enterprise risk profile is the utility’s solid market position, with the weighted-average rate equal to the state average and high incomes in the service area and “extremely strong industry risk relative to other industries and sectors.”

 S&P said that the strong financial risk profile reflects solid fixed-charge coverage, substantial liquidity, and a manageable debt-to-capitalization ratio.

"Not only does this upgrade speak to the hard work and dedication of our staff and the stewardship of the city of Alameda’s Public Utilities Board, it also is a strong endorsement to the community-owned business model for electric utilities,” said AMP General Manager Nicolas Procos.

Alameda Municipal Power is a department of the city of Alameda and provides power to more than 34,000 customers.