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.”
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.