Fitch Ratings in late August affirmed New Braunfels Utilities (NBU) “AA” rating for its utility system revenue bonds.
Fitch assessed a Stand-Alone Credit Profile (SCP) of “aa,” which reflects Texas public power utility NBU’s very strong customer growth, service area demographics, and ample rate flexibility and affordability, NBU noted in a news release.
Fitch revised NBU’s Rating Outlook from Negative to Stable.
“New Braunfels Utilities takes the responsibility of providing electricity, water, and wastewater for our growing community very seriously,” said NBU’s Chief Financial Officer Dawn Schriewer in a news release. “Fitch reviewed our five-year strategic plan and capital expenditures required to support the expansion and development of additional water and wastewater infrastructure and found NBU to be well leveraged in its debt to capital ratio.”
Fitch noted that NBU has a flexible power portfolio that provides revenue protection from purchased power cost fluctuations, strong operational and management assessment, highlighted by robust financial planning and policies.
NBU’s fiscal 2021 financial operating plan conservatively reduced growth expectations for combined customers to 2.1 percent in fiscal 2021, followed by 3.2 percent annual growth for the remaining four years of its five-year Capital Improvement Plan. Fiscal 2021 projections include potential adverse financial impacts due to COVID-19. “This prudent planning has positioned the NBU to respond to the growth pressures in a credit-supportive manner,” the utility noted.
“New Braunfels Utilities’ rates are designed to cover the cost of providing essential services,” said Chief Communications and Strategy Officer Melissa Krause. “Upgrading existing infrastructure and expanding infrastructure to support our community is vital. Strong credit ratings help NBU to keep utility rates as low as possible while continuing to provide innovative essential services to our community.”
In an email, Pam Quidley, Communications & Marketing Manager for NBU, noted that in April, Moody’s and Standard and Poor’s assigned favorable ratings and a stable outlook as well for the utility’s commercial paper notes, series 2019A, and 2019B.