LOS ANGELES (February 6, 2018) – S&P Global Ratings (S&P) has given the Los Angeles Department of Water and Power’s (LADWP) $8.9 billion power system revenue bonds an added vote of confidence by raising the Department’s credit rating from “AA-” to “AA.” The upgrade is a reflection of LADWP’s strong financial health and ability to pay bond holder obligations as it ramps up replacement of aging infrastructure in the midst of a clean energy transformation.
“Strong bond ratings are one way we help keep rates low for our customers,” said LADWP General Manager David H. Wright. “Bond ratings are like credit scores – the higher the rating, the lower your borrowing costs. Lower borrowing costs allow us to put more money into replacing critical power system infrastructure, rather than paying higher interest on debt. That’s good for our business and good for customers.”
“This most recent rating upgrade and “stable” outlook from S&P is a reflection of LADWP’s strong financial performance while reducing greenhouse gas emissions and increasing energy efficiency and renewable energy in accordance with state mandates,” said Neil Guglielmo, LADWP Chief Financial Officer. “It is a credit to the strong leadership of the Mayor, City Council and the Board of Water and Power Commissioners, as well as the fiscal discipline, accountability and transparency of LADWP.”
LADWP, the nation’s largest municipal utility, issues tax-exempt revenue bonds to finance capital improvements to upgrade facilities and improve service and reliability for customers. Proceeds from the power system revenue bond sales will be used to finance a portion of the on-going power system capital improvement efforts, such as replacing power poles, cables and transformers. It will also support the ongoing transformation of generation resources by increasing renewable energy while divesting from coal generation to meet environmental and regulatory mandates.
LADWP’s power system includes nearly 6,800 miles of overhead distribution power lines,
3,626 miles of underground distribution cables and 308,523 utility poles. The utility also achieved 29 percent renewable energy delivered to customers in 2016 and is on track to meet the next milestone of 33 percent renewables by 2020.
LADWP has also been a leader in reducing greenhouse gas emissions, reducing emissions levels 42 percent below 1990 levels, which exceeded the state-mandated target 14 years early. LADWP expects to reach 63 percent below 1990 emissions levels by 2027.
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