Grant PUD to pay some debt
CHERYL SCHWEIZER | Hagadone News Network | UPDATED 6 years, 2 months AGO
Senior Reporter Cheryl Schweizer is a journalist with more than 30 years of experience serving small communities in the Pacific Northwest. She began her post-high-school education at Treasure Valley Community College and enerned her journalism degree at Oregon State University. After working for multiple publications, she has settled down at the Columbia Basin Herald and has been a staple of the newsroom for more than a decade. Schweizer’s dedication to her communities and profession has earned her the nickname “The Baroness of Bylines.” She covers a variety of beats including health, business and various municipalities. | January 7, 2020 11:45 PM
Utility will refinance additional debt at lower interest rates
EPHRATA — Grant County PUD officials have opted to pay off about $85 million of the utility’s debt and refinance another $200 million at lower interest rates. The transactions are projected to save the PUD and its customers about $125 million in debt repayment.
Paying off and refinancing the debt should be completed by the end of January, said PUD treasurer Bonnie Overfield.
As of Dec. 31, the PUD owes about $1.3 billion, most of that in connection with a long-term project to upgrade turbines and generators at Priest Rapids and Wanapum dams. The project is scheduled for completion in about 2028.
Utility district officials started discussing the idea of paying off some of the debt during the preparation of the 2020 budget.
Buying new turbines and generators, or even rebuilding existing ones, is an expensive proposition that requires borrowing money. In order to get the lowest interest rate, PUD officials had been keeping a lot of cash in reserve. How much cash is enough has been the subject of persistent conversations among the PUD commissioners over the last couple of years.
But during budget discussions in September, chief financial officer Jeff Bishop said the PUD would have more money than it needed to meet those targets. Bishop said PUD officials wanted to use some of that money to pay down debt.
The proposal depended on financial market conditions at the time of sale, set for January, and whether or not the PUD would still have a credit rating that would give the best interest rates.
Credit ratings (which are critical in determining interest rates) for organizations like the PUD are based in part on a business analysis. Three agencies, independent of each other, each issue a report.
Fitch Ratings and Moody’s released their reports, both favorable, in fall 2019. Standard & Poor’s (S&P Global) issued its report at the end of 2019 and confirmed its favorable assessment. The S&P report said the PUD had “strong” or “extremely strong” finances, and gave favorable evaluations of its operational management, cash reserves, rate-setting practices and environmental compliance.
Cheryl Schweizer can be reached via email at [email protected].
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