Moody's Investors Service has upgraded the ratings on more than $600 million of the Northern California Power Agency's outstanding debt.
The NCPA, headquartered in Roseville, Calif., is a joint powers agency formed in 1968 to provide its members with electrical energy services. Its members include the Bay Area Rapid Transit District, Alameda Municipal Power, the city of Palo Alto, and the Port of Oakland.
Moody's on Dec. 17 upgraded the rating on $301 million of NCPA's hydroelectric revenue bonds to A1 from A2. Analysts said the upgrade takes into consideration the successful NCPA power pool operation that incorporates the load following and peaking value of the hydroelectric facility despite drought conditions.
"The upgrade also considers the strong availability record of the facility for the past decade, along with the increasingly important role of hydro as part of participants' non-carbon energy resources," Moody's said in the credit report.
The ratings agency also upgraded $56 million of NCPA's capital facilities revenue bonds to A2 from A3, citing the credit quality of the hydroelectric project participants, and the project's stable and consistent operating performance.
Around $42 million of the agency's geothermal revenue bonds were affirmed at A1.
At the same time, the ratings agency upgraded $250 million of bonds related to another project — the 300-megawatt natural gas Lodi Energy Center. The development was financed with bonds under three indentures, including the Indenture A bonds, which were upgraded to A2 from A3.
The upgrade reflects the elimination of construction risk as the Center reached commercial operations in November 2012 with good operating performance, as well as the NCPA's strong role in California's energy market, Moody's said.
The $141 million of indenture B bonds were affirmed at Aa2.
