CHICAGO — The Nebraska Public Power District Monday will price $64 million of general revenue bonds to refund commercial paper issued to finance the cost of nuclear fuel. The bonds mature from 2012 through 2017.
Wells Fargo Securities is the senior book-runner, with 13 additional firms rounding out the underwriting team. Fulbright & Jaworski LLP is bond counsel.
In addition to the NPPD’s general revenues, the bonds are secured by a debt-service reserve fund consisting of two accounts.
The agency’s grid gets 24% of its supply from nuclear energy, which analysts consider high for a power utility, while coal represents about 62%. The remainder comes from gas, oil, wind, and hydro power.
Repercussions from the earthquake and tsunami damage to nuclear reactors in Japan are expected to reverberate throughout the nuclear power industry for years. Bond documents for the sale note that the Japanese events could impact the district, particularly with the possibility of increased regulation.
The NPPD’s nuclear facility, Cooper Nuclear Station, uses the same kind of containment system used in one of the damaged Japanese plants, though the district’s reactors and containment systems have undergone major improvements during the life of the plant. It remains unclear whether the Japanese reactors underwent similar improvements, according to the bond documents.
“After the events at the Japanese plants are fully investigated and understood, there may be additional requirements promulgated for the current fleet of United States nuclear reactors,” the documents said.
In an e-mail, NPPD officials said that the Nuclear Regulatory Commission last week declared that Cooper Nuclear Station meets the NRC’s “very high” standards for safety and security.
“NPPD has continuously invested and made significant improvements to the design of its nuclear facility to ensure the safe and reliable operation of that unit,” officials said in the e-mail, noting that the NRC recently granted it a 20-year operating extension through 2034.
The power district is a major player in Nebraska’s economy, and serves customers in 91 of the state’s 93 counties. It has about $2 billion of outstanding long-term debt and $224 of commercial paper notes.
Ratings for the upcoming bond sale were not available Friday afternoon. But as of the NPPD’s last sale, its debt was rated A by Standard & Poor’s, A1 by Moody’s Investors Service, and A-plus by Fitch Ratings.
The issuer last sold new-money bonds on Sept. 27, 2010. The $270 million financing was part of the NPPD’s annual capital projects borrowing. Its next new-money issue is tentatively scheduled for either the fall of 2011 or 2012.
