LOS ANGELES - The Southern California Public Power Authority is planning to sell $322 million of bonds to finance its purchase of a power plant in Nevada, according to a recent report from Standard & Poor's.
The authority plans to finance 100% of the cost of the acquisition of a 531 megawatt, gas-fired, combined cycle Apex power plant from Las Vegas Power Company LLC, a merchant energy company. The plant is in Clark County, Nev.
The bonds will be sold in two series consisting of $155.1 million tax-exempt bonds, and $166.9 million taxable bonds.
Debt service on the bonds will be paid from revenues received from the Los Angeles Department of Water and Power's electric system, the project's sole participant.
Standard & Poor's has assigned the Apex project revenue bonds a AA-minus and stable outlook.
"In part, the rating on the SCPPA Apex bonds reflect our opinion of the LADWP's unconditional obligation to pay the bonds' debt service as an electric utility operating expense, moderate addition to its debt portfolio through this financing relative to its existing on - and off-balance-sheet debt commitments; large base of 1.4 million customers, and sound financial metrics after accounting for direct debt and off-balance-sheet financial commitments," said Standard & Poor's credit analyst David Bodek.
The stable outlook reflects the agency's expectation that the LADWP will maintain debt service coverage and liquidity levels consistent with the rating.
The SCPPA is a joint powers authority formed in 1980 by the state legislature. It issues tax-exempt and taxable revenue bonds to finance the construction or acquisition of generation, transmission, natural gas reserves, and renewable energy projects.
