Fitch Ratings has assigned an “A+” rating to the approximately $150 million general revenue bonds, series 2023A being issued by the Nebraska Public Power District. The Rating Outlook is Stable.
Bond proceeds will refinance outstanding debt, fund capitalized interest through 2026, and pay costs of issuance. The bonds are scheduled to price as early as the week of May 22, 2023 via negotiated sale.
In addition, Fitch has affirmed the following ratings for the NPPD: Issuer Default Rating at 'A+' and $993.8 million in outstanding general revenue bonds at 'A+' (amount prior to refunding).
The 'A+' revenue bond ratings and IDR for NPPD “reflect the utility's strong financial profile and statewide customer base, which generates a mix of wholesale and retail revenues,” Fitch said.
Fitch said the rating is “heavily influenced and constrained by termination provisions in NPPD's all-requirements wholesale contracts, which permit wholesale customers to reduce purchases to zero over a six-year period if NPPD's rates do not remain competitive compared with a national benchmark.”
At present, NPPD's wholesale rates “are extremely competitive to the benchmark, and the risk of wholesale customer departure over the near term is very low. Additional generation needs could prompt contract extension discussions in the near term.”
Fitch also said the rating is supported by NPPD's very low operating costs, driven by a diverse fleet of generation resources and off-system sales activity within the regional Southwest Power Pool organized market.
NPPD's energy supply is approximately 56% carbon-free due to its nuclear, hydroelectric and wind resources. In 2021, its board of directors adopted a net zero carbon goal by 2050.