Fitch Ratings has affirmed at 'AA-' the rating on approximately $75.6 million in Milford Wind Corridor Phase 1 Project outstanding refunding revenue bonds issued by the Southern California Public Power Authority.
Fitch assesses the stand-alone credit profile of the Milford Wind Corridor Phase 1 Project at 'aa-' and the rating outlook is Stable.
The rating is dependent on the credit quality of the Los Angeles Department of Water and Power (AA-/Stable), as the largest participant in the Milford Wind Corridor Phase 1 prepaid energy project at 92.5%.
“The rating is largely driven by Fitch's purchaser credit quality assessment of 'aa', and informed by the operational value of the project as a renewable resource that helps project participants comply with California's renewable and clean energy goals,” Fitch said.
Bonds are secured by unconditional payments made by the electric systems of LADWP, and Burbank and Pasadena, Calif., due under the power sales agreements with SCPPA.
With respect to key rating drivers, Fitch listed and provided details on revenue defensibility ('aa'), Operating Risk ('a') and Financial Profile ('aa').
SCPPA is a joint-action agency that owns and operates electric generation, transmission and physical gas assets on behalf of its 12 members consisting of 11 municipal electric utilities and one irrigation district, all located in southern California.
All of SCPPA's projects are financed and secured on an individual-project basis. There is no other source of revenue for each of the SCPPA projects other than the payments made directly from the three participants in the Milford Wind Corridor Phase 1 project, Fitch said.
