PUD to reduce debt in good market

EPHRATA — Three of the world’s top bond-rating agencies have affirmed strong credit ratings for Grant PUD, as the utility readies to pay down debt for long-term savings that will help keep electric rates low, the utility said Tuesday.

The PUD’s $1.3 billion in debt was a point of contention in the 2018 commissioner election when one incumbent lost insisting it was reasonable level for the utility to carry that helped to keep rates lower.

The high ratings enable Grant PUD to take fuller advantage of current market conditions to refinance $200 million in existing debt at a lower interest rate. The utility will also use cash savings to reduce total debt by $85 million.

The two transactions are expected to save $125 million in reduced or avoided debt-service payments over the coming decades.

“This is great news for Grant PUD and our customers,” Treasurer Bonnie Overfield said Thursday. “These transactions help lower our costs, while keeping debt equitably spread out over generations of customers. That helps us keep rates as low as possible for everyone.”

S&P Global affirmed Dec. 31 an AA+/Stable credit rating for Grant PUD bond transactions, pointing to “strong” or “extremely strong” finances, operational management, environmental compliance, rate-setting practices, cash reserves and general ability to repay its debt.

Earlier last year, firms Moody’s and Fitch Ratings also affirmed their respective Aa3 and AA ratings.

Overfield expects both transactions to be complete by late January. Outstanding Grant PUD debt through Dec. 31 was $1.3 billion.