S&P Global Ratings recently upgraded Washington state-based Chelan County Public Utility District’s Consolidated System debt to AA+/Stable from AA/Stable.
The rating puts Chelan PUD in the top five public utilities highly rated by S&P, the PUD recently noted. Moreover, the AA+/Stable rating matches one received from Fitch Ratings in October 2008 and affirmed in September 2017.
The PUD said that some of the factors behind the S&P upgrade include: (1) Chelan PUD’s very strong risk management and financial policies; (2) Rapidly declining debt; (3) Improved cash position/liquidity; (4) Experienced management team; and (5) Extremely low-cost power.
S&P noted that the PUD achieved these accomplishments without a retail rate increase in six years. The PUD’s low rates give the utility financial flexibility. In addition to the PUD’s financial strength and stability, low operating costs from hydropower generation also contributed to the positive review.
S&P also commented on the PUD’s surplus generation hedging practices as beneficial to lowering the impact of energy market volatility on the PUD’s revenues.
Chelan PUD notes that it will begin its next five-year strategic planning process later this year. Maintaining its strong financial position will be a key component for investment and operating strategies into the 2020s, it said.