Basin Electric team meets with rating agencies in NYC
Staff addressed issues that contributed to the agencies’ ratings.
Basin Electric Power Cooperative
- November 4, 2011
A Basin Electric team traveled to New York City Oct. 24-26 to meet with representatives from the rating agencies of Standard & Poor’s (S&P), Fitch Ratings, and Moody’s Investor Services.
The team included Paul Sukut, chief financial officer and senior vice president of Financial Services, Steve Johnson, manager of treasury services, Ron Harper, CEO and general manager, Cliff Gjellstad, District 3 director and president of the board, and Wayne Child, District 5 director.
The presentations were designed to show how the cooperative had addressed issues contributing to the agencies’ most recent ratings. “A few issues mentioned during their reviews in the fall of 2010 did contribute to Moody’s giving the cooperative a negative outlook,” Sukut said.
Johnson said the team told the agencies Basin Electric has resolved the issues by taking the following actions: “The board instituted an intra-year rate increase that went into effect on Oct. 1. We also completed the refinancing of bullet maturities on Oct. 31, and closed the liquidity facility that backstops our commercial paper program on Oct. 27.”
Sukut said the agencies acknowledged Basin Electric has addressed the key points needing attention during their last rating of the cooperative. “Because of timing in the ratings cycle, we don’t expect any change to our current ratings from S&P and Fitch. Moody’s may re-address their rating of us during the next couple months.”
“What stands out is how competitive Basin Electric’s mill rate is compared to the rest of country,” Sukut said. “Basin Electric is projecting rates lower than what many utilities are charging today.”
Johnson said the strength of the membership, the large geographical area served by member systems, and Basin Electric’s diversified energy portfolio were seen as positives.
“It’s obvious that our coal-based resources are the main drivers of the electric side of our business,” Sukut said. “Compared to industry standards, our units operate very well and our reliability factor is high—all this indicates we have a solid approach to plant operations.”
Both Sukut and Johnson said all the rating agencies were interested in hearing how Basin Electric expects to handle oil load growth in northwestern North Dakota.
Headquarters
1717 East Interstate Avenue
Bismarck, ND 58503-0564 USA
Phone: 701.223.0441
Basin Electric Power Cooperative will provide cost-effective wholesale energy along with products and services that support and unite rural America.
