The joint powers authority financing arm for public power in Southern California received another “AA-” credit rating from Standard & Poor’s Ratings Services (S&P) for its $511.5 million revenue bonds. Proceeds from the bond sales will be used to fund an aggressive long-term natural gas purchase program for five munis, including the Los Angeles Department of Water and Power and Southern California Public Power Authority (SCPPA), which will use the proceeds to acquire a 30-year natural gas supply from J. Aron Co. including five nearly identical prepaid gas sales agreements with the SCPPA municipal utilities involved. The bonds are expected to be priced soon with Goldman Sachs as the sole manager. S&P noted that the stable outlook reflects the outlook on Goldman Sachs. Fitch Ratings gave the offering a stable outlook last week (see Daily GPI, Oct. 1).
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NRG: Gas Will Back-up Wind Power, But LNG Supplies Uncertain
California’s headlong rush toward an eventual renewable portfolio standard (RPS) goal of 33% of the state’s power coming from environmentally clean resources by 2020 could greatly expand the market from natural gas-fired power generation, according to Steve Hoffmann, senior vice president with NRG Energy Inc. With wind power back-up is key. He pointed out that during a recent heat wave less than 2% of the wind power connected to the system was actually functioning.
S&P: Declining Gas Prices May Threaten Producers’ Credit Quality
A continued decline in natural gas prices could pose one of the biggest threats to the credit quality of producers in the fourth quarter, according to a new Standard & Poor’s (S&P) report released last week.
S&P: Declining Gas Prices May Threaten Producers’ Credit Quality
A continued decline in natural gas prices could pose one of the biggest threats to the credit quality of producers in the fourth quarter, according to a new Standard & Poor’s (S&P) report released this week.
Renewable Push Can Expand Gas-Powered Generation Market
California’s headlong rush toward an eventual renewable portfolio standard (RPS) goal of 33% of the state’s power coming from environmentally clean resources by 2020 could greatly expand the market from natural gas-fired power generation, according to Steve Hoffmann, senior vice president with NRG Energy Inc. Diversifying electric generation fuels may expand, not lessen, the influence of gas in the next five to 10 years, he said from his perspective running NRG’s western operations.
Two SoCal Munis Draw ‘AA-‘ S&P Ratings on $1.7B of Bonds
Two large city-run utilities in Los Angeles and Long Beach, CA, drew “AA-” credit ratings from Standard & Poor’s Ratings Services (S&P) Tuesday on more than $1.7 billion of revenue bonds they collectively are preparing to offer. Both utilities are viewed as strong with “stable” outlooks by S&P, which generally views double-A ratings as “very strong” and only slightly lower than its highest rating..
Industry Brief
The natural gas financing unit for the Sacramento Municipal Utility District (SMUD) received a credit rating upgrade (“AA-” from “A+”) from Standard & Poor’s Ratings Services (S&P) Thursday covering more than $750 million in fixed- and indexed-rate bonds. S&P set the outlook at “stable” for the Northern California Gas Authority, a special purpose vehicle for financing long-term gas purchases for SMUD’s power generation needs. The gas authority was created to issue bonds, the proceeds of which fund prepayment for 146 Bcf of gas scheduled for delivery over the next 20 years. The authority sells the gas supplies to SMUD at first-of-the-month index price, minus a predetermined discount. In turn, the gas authority’s floating index-based revenues from SMUD are exchanged through a commodity swap with the Royal Bank of Canada (RBC) for fixed amounts needed to pay interest and principal on the bonds. S&P said the upgrade reflects a July 30 upgrade of Morgan Stanley (AA-/Stable/A-1+), which guarantees the obligation of the gas authority’s supplier, Morgan Stanley Capital Group. Two other counterparties to the deals figured in the ratings change, S&P said: Royal Bank of Canada (RBC: AA-/Positive/A-1+) and MBIA Insurance Corp. (AAA/Stable). “The outlook could be revised to negative if the outlook on Morgan Stanley or the Canadian bank is revised to negative, and the ratings could be lowered if the ratings on Morgan Stanley, RBC, or MBIA are lowered to below ‘AA-‘,” said S&P analyst Kenneth Farer.
Ratings Agencies Smile Upon CA Municipals’ Financings
Six years after it was the center of an economic and energy meltdown, California’s latest public-sector energy financings are gaining improved reviews by Standard & Poor’s Ratings Services (S&P) and Moody’s Investors Service.
Study: 15% Renewable Standard Would Cut into Gas Market
A federal renewable energy portfolio standard (RPS) of 15% would drive down natural gas demand and price and lower the overall price of power, but would only lead to a lowering in the growth rate of greenhouse gas emissions (GHG) rather than an absolute reduction from current levels, according to a new study by UK-based consultants Wood Mackenzie.
Study: 15% Renewable Standard Would Cut into Gas Market
A federal renewable energy portfolio standard (RPS) of 15% would drive down natural gas demand and price and lower the overall price of power, but would only lead to a lowering in the growth rate of greenhouse gas emissions (GHG) rather than an absolute reduction from current levels, according to a new study by UK-based consultants Wood Mackenzie.
