Templeton utility gets own credit rating
By George Barnes TELEGRAM & GAZETTE STAFF
george.barnes@telegram.com
george.barnes@telegram.com
TEMPLETON — With the town's credit rating problems weighing it down, the Templeton Municipal Light and Water Plant went its own way this fall and has now earned its first credit rating, receiving an investment grade rating of A- from Standard & Poor's rating services.
In August the town lost its credit rating because of ongoing financial problems. Without a municipal credit rating, the utility lost its qualification for unsecured credit in the wholesale power markets.
At that point, according to John Driscoll, general manager of the light and water plant, the utility decided to go a different route.
Mr. Driscoll said the utility's financial standing and credit characteristics were cited as credit strengths in the Standard & Poor's report, which also assigned a stable outlook to the rating. He said it also indicated the utility's business profile reflects a solid competitive position, a manageable debt burden and manageable capital needs.
Utilities that participate in the ISO New England wholesale power markets must post collateral or financial assurance to ensure payment for the transactions they make in the marketplace. Because of their financial structure, if municipal utilities or the municipalities they serve have an investment-grade credit rating, they qualify for unsecured credit and don't need to post collateral or some form of financial assurance to back their transactions.
The cost of the utility seeking its own credit rating was $17,000.
Templeton Municipal Light and Water Plant is a nonprofit, town-owned municipal utility. It was established in 1906 and serves about 3,500 electric customers in Templeton, and about 2,200 water customers.
Contact George Barnes at george.barnes@telegram.com. Follow him on Twitter@georgebarnesTG
In August the town lost its credit rating because of ongoing financial problems. Without a municipal credit rating, the utility lost its qualification for unsecured credit in the wholesale power markets.
At that point, according to John Driscoll, general manager of the light and water plant, the utility decided to go a different route.
Mr. Driscoll said the utility's financial standing and credit characteristics were cited as credit strengths in the Standard & Poor's report, which also assigned a stable outlook to the rating. He said it also indicated the utility's business profile reflects a solid competitive position, a manageable debt burden and manageable capital needs.
Utilities that participate in the ISO New England wholesale power markets must post collateral or financial assurance to ensure payment for the transactions they make in the marketplace. Because of their financial structure, if municipal utilities or the municipalities they serve have an investment-grade credit rating, they qualify for unsecured credit and don't need to post collateral or some form of financial assurance to back their transactions.
The cost of the utility seeking its own credit rating was $17,000.
Templeton Municipal Light and Water Plant is a nonprofit, town-owned municipal utility. It was established in 1906 and serves about 3,500 electric customers in Templeton, and about 2,200 water customers.
Contact George Barnes at george.barnes@telegram.com. Follow him on Twitter@georgebarnesTG
I wonder how much of the 17,000.00 went to the 350.00 per hour lawyer?
ReplyDeleteIt is really something when J.D. carries on about the need for his department to pay high legal fees. Somehow he does not get the fact that if he stopped doing things illegally, his need to pay a lawyer would no longer be necessary. Talk about not seeing the forest thru the trees !! Bev.
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