Apr 26 2010
[Update 5/01/2010] Seattle City Light’s bond rating from Moody’s, below is a press release of Standard & Poor’s rating
Press Release issued April 30, 2010: Moody’s affirms City Light bond rating
Second Rating Agency Also Gives “Stable” Outlook
SEATTLE – Mayor Mike McGinn announced today that Moody’s has affirmed Seattle City Light’s Aa2 bond rating with a stable outlook. Moody’s is the second rating agency to maintain high ratings for the utility this week.
Standard & Poor’s (S&P) announced Monday that it was maintaining an AA- rating with a stable outlook for City Light. Moody’s made their announcement on Tuesday.
“The past two years have brought many challenges to the utility, including falling energy prices in 2009 and a low snowpack this year that have resulted in significant revenue shortfalls,” said McGinn. “The Council, and particularly Councilmember Harrell, has taken difficult but necessary measures to keep City Light financially healthy. My office will continue to work with the Council and Superintendent Carrasco to ensure that City Light remains a stable and strong provider of services for our city’s residents.”
Earlier this year, the City Council approved a Rate Stabilization Account that will help to protect City Light against such future volatility in its revenues. McGinn and the Council are now working with City Light to develop a strategic plan for the utility. The plan will define programs to improve system reliability and meet customer needs. In addition, a recently created City Light Citizens Task Force will be assessing financial policies along with the strategic plan in an effort to provide transparency on cost and rate consequences.
“Maintaining strong bond ratings mean that City Light can borrow money at lower interest rates for long-term investments in the utility’s infrastructure,” said Councilmember Bruce Harrell, who chairs the Energy, Technology and Civil Rights Committee. “The favorable bond ratings are a key element that allows City Light to keep rates as low as possible for the residents and businesses of Seattle.”
The bond rating for City Light was reduced several times after the on-set of the West Coast energy crisis in 2000. In January 2001, City Light received an AA-/Negative rating. By July, 2003, the rating had dropped to A/Negative. The turnaround began in December, 2004 with an A/Positive rating. In 2008 City Light was upgraded to AA-.
“This second vote of confidence shows that City Light’s efforts to manage its finances through effective controls on cost and debt and,our continued efforts working with the City Council to develop sound financial policies are working,” Superintendent Jorge Carrasco said. “But the real winners because of these recent bond ratings are our customers.”
Press Release issued April 26, 2010 with Mayor Mike McGinn
SEATTLE – Mayor Mike McGinn announced today that Standard & Poor’s (S&P) has affirmed Seattle City Light’s bond rating as AA- and a stable outlook. This rating is good news for ratepayers and independent validation that City Light is in good financial condition.
“Maintaining an AA- bond rating is essential for Seattle City Light to continue providing excellent service for residents of our city,” said McGinn. “But we aren’t out of the woods yet. Seattle City Light is facing serious challenges, including a shortfall in revenues due to a far below average snowpack. As chair of the Energy, Technology and Civil Rights Committee, Councilmember Bruce Harrell has played a key role in facing these challenges. I thank him for his hard work and I look forward to continuing my work with him. I know that we are both committed to a sustainable path for Seattle City Light to ensure that the utility remains a national leader.”
The bond rating for City Light was reduced several times after the on-set of the West Coast energy crisis in 2000. In January 2001, City Light received an AA-/Negative rating. By July, 2003, the rating had dropped to A/Negative. The turnaround began in December, 2004 with an A/Positive rating. In 2008 City Light was up-graded to AA-.
“Our decision to create a Rate Stabilization Account and develop best practices for our financial policies and risk management efforts, all lead to a rating that will benefit our residents, low income customers, and businesses, both small and large. We will be able to invest in our infrastructure and maintain our commitment for low, competitive rates,” said Councilmember Bruce Harrell, Chair of the Energy, Technology and Civil Rights Committee.
Superintendent Carrasco was pleased with the vote of confidence from S&P. ”Given the current economy, this is great news. City Light has worked hard to control costs, pay down debt, and together with the City Council, have put into place new financial policies that have strengthened our financial position,” he said. “These steps are paying off and ultimately, our customers benefit.”
About Seattle City Light: Seattle City Light is the ninth largest public electric utility in the United States and was the first electric utility in 2005 to be greenhouse gas neutral and remains net zero today. City Light has the lowest cost customer rates of any urban utility, providing reliable, renewable and environmentally responsible power to nearly 1 million Seattle area residents.