Snohomish County PUD’s electric and generation system revenue bond ratings were recently upgraded to Aa2 by Moody’s. According to the rating agency, the PUD’s rating was upgraded from Aa3 to Aa2 due to the region’s robust economic growth and the utility’s continued strong financial performance.
“This rating upgrade is a result of the PUD’s continued emphasis on fiscal responsibility and cost management,” said Glenn McPherson, PUD Chief Financial Officer. “This is great news and the result of a lot of hard work by employees at the PUD and steady policy guidance from our Board of Commissioners.”
Moody’s upgraded bond rating, together with the PUD’s already strong AA- ratings with Standard & Poor’s and Fitch Ratings, will help the utility secure lower interest rates when it sells bonds to raise capital for future projects.
Moody’s cited several key factors for the PUD’s upgraded bond rating in its report, including:
- Strong financial performance and liquidity
- Decline in outstanding debt
- Benefits of a long-term supply agreement with the Bonneville Power Administration
- Low carbon transition risk exposure
The region’s population and economic growth over the past five years also helped strengthen the PUD’s financial performance. Snohomish County’s median family income is 127% of the U.S. average, unemployment is around 4%, and population increased more than 12% from 2013 to 2018 to 814,000. Earlier this year, the PUD deferred a general rate increase based on stronger than expected financial results in 2018 and internal cost-control measures.
The PUD’s manageable capital plan for transmission and distribution system improvements like replacing aging poles and building new substations was also a factor in the bond-rating upgrade.