The utility benefitted from very favorable market conditions to lock in a low borrowing rate for the 30-year bonds.
Due to the timing of the licensing and other issues, the PUD benefitted from lower interest rates available in the marketplace. A decision by the Federal Reserve not to raise interest rates in mid-September helped the utility achieve better pricing for the transaction.
In conjunction with the bond issuance, the PUD also secured strong ratings affirmations from Moody’s Investor Service (Aa3), Standard & Poor’s (AA-) and Fitch (AA-). All of the rating agencies gave the utility a stable outlook. Among other things, the agencies cited the PUD’s strong financial management, well-designed resource plan, strong coverage of fixed costs and strong local economy.
The bonds will provide funding for two new hydroelectric projects on Calligan and Hancock creeks, both located above Snoqualmie Falls near North Bend, Wash. The utility broke ground at one of the sites earlier this month. Construction will continue over the next two years, with the projects expected to go into operation in the 2017-2018 timeframe.
The two hydropower projects will provide enough power for 10,000 homes at peak output. These renewable energy sources are attractive to the utility in that they’re available locally, emit no noxious gas and their output can be maximized at the times of the year when the energy is needed the most. They are among the lowest priced renewable energy sources. Since both projects will be sited above Snoqualmie Falls – an impassible barrier for migrating fish – issues related to salmon and resident fish will be minimized.
