S&P Global Ratings (S&P) on Feb. 1 released its credit rating on the Guam Power Authority's (GPA) revenue bonds.
S&P's long-term rating and underlying rating on GPA’s senior-lien revenue bonds outstanding are “BBB.” The outlook is stable.
In the credit rating agency’s opinion, GPA’s enterprise risk profile and financial risk profile were rated adequate.
In its credit overview, S&P reported its view of GPA’s adequate financial capacity to meet its obligations and its expectation that GPA will continue to adjust base rates or its levelized energy adjustment clause as needed to maintain stable financial metrics as the authority proceeds with its plan to significantly overhaul its power supply portfolio.
S&P also cited environmental, social and governance factors that impact GPA overall in the report.
“GPA acknowledges S&P’s comments, and is committed to continually improving our operations, including modernizing our fleet, expanding fuel diversity, adding more efficient and flexible renewable energy resources, complying with all environmental regulations and the addition of the new 198-mewagatt Ukudu base load power plant, all of which contribute to maintaining or strengthening GPA’s financial health,” noted GPA General Manager John Benavente, P.E.
GPA’s energy demand demonstrated resiliency on an overall basis in fiscal year 2020 ending Sept. 20, 2020, versus the prior year, "with overall demand declining just 3% (including a 7% increase in residential demand offsetting 4%-19% reduced demand from commercial and industrial loads, with governmental and Navy loads down 7% and 3% respectively),” S&P said.
“We welcome this positive confirmation of GPA’s creditworthiness and resiliency in fiscal year 2020 by S&P, particularly in these challenging times of a worldwide health pandemic, and all its economic effects globally and here on Guam,” said Benavente. “This is good and welcome news for all ratepayers, the Authority and all of us who call Guam home,” said Benavente in a statement.