May 18, 2003 – A handful of capital projects planned by the Water and Power Authority are closer to becoming reality with the news that the utility has received investment-grade ratings from three major credit-rating institutions.
At a board meeting Thursday, members listened to presentation from WAPA financial consultants regarding this year's $70 million bond issuance. WAPA maintained its BBB rating from both Fitch and Standard and Poor's and received a Baa3 rating from Moody's. This is the first time in the utility's history that it received ratings from three major agencies.
WAPA's executive director, Alberto Bruno-Vega, called the news a "significant accomplishment" and said it would make WAPA eligible to receive bond insurance and help to lower interest rates.
For an explanation of the various ratings of all three agencies and what they signify, see "An Investor's Guide to Corporate Bonds," produced by The Bond Market Association.
The WAPA board voted to release a preliminary financial statement to the investment community pending final revisions and Bruno-Vega's signature.
One of the first projects planned with the $70 million bond issue is the extension of Feeder 8 to the middle of Frederiksted. The underground line project, Bruno-Vega said, will be "an economic stimulus for the island of St. Croix."
The plan, geared at improving electric reliability and reducing line losses, will cost $4.3 million. "This is a good day for us," Carol Burke, WAPA board chair, said.
Zenon Construction will complete the first phase of the project by extending the underground duct bank from Henry E. Rohlsen Airport to Estate Hannah's Rest.
The positive bond-rating news notwithstanding, customers could see their utility bills go up again if the Public Services Commission approves WAPA's request to increase the Levelized Energy Adjustment Clause rate on July 1. The LEAC is a surcharge that reflects the costs of fuel over the preceding six months. If the request is approved, the increase in the surcharge will be through Dec. 31.
In other business, the board:
– Voted to retain the services of Standard and Poor's Credit Market Services for credit rating services at $100,000 over the next three years.
– Approved a $600,000 purchase order for Ashland Chemical Co. to replace an expired contract for the purchase of boiler chemical additives and engineering services.
– Awarded a $291,882 contract to ED Plumbing for the expansion of potable water service to Estate Nadir on St. Thomas.
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