Moody’s Investors Service has affirmed its Aa3 rating with a stable outlook for the Western Minnesota Municipal Power Agency (WMMPA), WMMPA said on Sept. 4.
Moody’s updated analysis and rating noted delays in the construction of the Red Rock Hydroelectric Project, but pointed positively to the continued low-cost power supply, sound financial policies, debt service coverage, credit quality of member systems, and diversified generation mix of MRES.
Moody’s noted that its rating is not likely to be revised upward over the near-medium term, particularly in light of Red Rock Project construction delays, caused mainly by flooding. Construction of the project was 94 percent complete at the time of the rating and work is continuing with completion anticipated for 2020.
MRES is building a hydroelectric generating facility at the Red Rock Reservoir on the Des Moines River. The Red Rock Dam is located about three miles southwest of Pella, Iowa, and is operated by the U.S. Army Corps of Engineers. The project will be constructed and operated by Missouri River Energy Services (MRES) and financed and owned by WMMPA.
“Our strong financial position and policies, along with the reputation of WMMPA, MRES, and our members continue to play a key role in maintaining the high financial rating of WMMPA,” said MRES Finance Director and CFO Merlin Sawyer. “This high bond rating means that WMMPA will be in a good position to obtain favorable interest rates for any future bond sales.”
WMMPA also holds a rating of AA- from Fitch Ratings, making it one of just a few joint-action agencies from across the country to earn ratings in the double-A category from both Moody’s and Fitch.
WMMPA provides financing for and is the owner of electric generation, transmission, and other facilities that are used by MRES to serve its 61-member municipal electric systems in the states of Iowa, Minnesota, North Dakota, and South Dakota.