The revised budget for fiscal 2009 adopted last week by the Grand River Dam Authority expects net operating revenues will drop 25% during the year.
Revenues were estimated at $126.5 million when the preliminary budget was submitted in November 2008, but the latest budget for the state-owned utility puts fiscal 2009 revenues at $95.6 million.
The GRDA issued $568.3 million of revenue bonds in late 2008 to purchase a share in an operational power plant and to finance its capital improvement program through 2011.
The sale included $549.2 million of 20-year tax-exempt revenue bonds and $19.1 million of taxable revenue bonds that will mature in 2010.
The tax-exempt bonds are rated A2 by Moody’s Investors Service and A by Standard & Poor’s and Fitch Ratings. The two-year taxable bonds carry short-term ratings of F1 from Fitch and MIG-1 from Moody’s. Standard & Poor’s assigned an A rating to the short-term taxable bonds.
The revised budget said total operating revenue would be $312.7 million, down from a prediction of $372.3 million in the preliminary budget. However, operating expenses will also drop, to $217.1 million from the earlier prediction of $245.8 million, due to lower fuel costs.