Moody’s Investors Service has affirmed its Aa3 rating for the Western Minnesota Municipal Power Agency’s power supply revenue bonds, as well as the credit rating agency’s stable outlook for WMMPA, Missouri River Energy Services said Oct. 9.
In a news release, Missouri River Energy Services explained that WMMPA provides financing for and is the owner of electric generation, transmission, and other facilities that are used by MRES to serve its 60 member public power systems in Iowa, Minnesota, North Dakota, and South Dakota.
The Aa3 rating “reflects our fundamental view of the consolidated credit quality of MRES, which is the ultimate source of repayment for the WMMPA bonds,” Moody’s said in its report. “The rating considers the agency's sound financial policies which have resulted in ample liquidity and strong debt service coverage for the WMMPA bond holders.”
Moody’s also noted the low cost of power for MRES members as well as the diversity and overall credit quality of those member utility systems.
“The rating also considers the steps the agency has taken to ensure future capacity and improve resource diversity, such as the construction of the Red Rock Hydroelectric Project, as well as the risk mitigation techniques being employed to manage this significant construction risk,” the credit rating agency said.
WMMPA has 23 Minnesota members, all of which also are members of MRES. The joint action agency is one of just a few such agencies from across the country to earn a Moody’s rating in the double-A category and it is the only one in the Midwest, MRES said in the news release.
WMMPA also holds a rating of AA- from Fitch Ratings, with a stable outlook from that agency.