Fitch Ratings has affirmed strong credit on the New York Power Authority’s electric revenue bonds, providing ratings among the highest given to public electric utilities, NYPA said on Sept. 25.
Fitch affirmed an AA rating for more than $800 million of NYPA long-term bonds and notes, as well as an F1+ rating for NYPA’s commercial paper program, NYPA noted.
“NYPA’s strong credit ratings are integral in allowing NYPA to carry out its mission of providing low-cost, clean, reliable power and innovative energy infrastructure and services to our customers,” said Gil Quiniones, NYPA president and CEO. “We are appreciative to Fitch for the strong trust that they place in NYPA.”
NYPA is currently investing in modernized transmission infrastructure, energy efficiency and renewable energy projects, energy storage, and electric vehicle charging infrastructure. Due to NYPA’s high credit rating, its investments can be financed at lower costs, benefiting electric customers across the state and reducing greenhouse gas emissions, the Authority noted.
“Fitch’s affirmation of NYPA’s bond ratings allows us to continue to access the capital markets and finance at low cost some of New York State’s most impactful energy initiatives,” said John Koelmel, NYPA Chairman. “NYPA’s strong credit is a continuing testament to the prudent fiscal and risk management of the Authority’s business and balance sheet by our outstanding leadership team and organization.”
Key rating drivers
With respect to some of the key rating drivers, Fitch noted that NYPA is the largest nonfederal power producer in the U.S. and serves a diverse group of mainly wholesale customers throughout New York State.
“NYPA benefits from a largely 'green' resource mix (hydropower) that is below cost for the state and region. Contracted sales account for more than 70% of NYPA's revenue base,” Fitch said.
Fitch also pointed out that NYPA maintains sound financial metrics, with a strong balance sheet (65.8% equity capitalization), healthy cash flow and debt service coverage in excess of 2.0x historically.
Fitch also highlighted the Authority’s sound credit and liquidity and manageable capital expenditures and leverage.
