“This upgrade … helps us reduce our costs, which will in turn strengthen the reliable, affordable rates for our member co-ops and all of the families, farms, businesses, and schools that they serve.”
– Jeff Conrad, WVPA chief operating officer
For an organization with $1 billion in assets, the cost of doing business just got more efficient.
Wabash Valley Power’s 23 co-ops and their retail members will save money with the generation and transmission cooperative’s upgraded “A” credit rating with a stable outlook from Standard & Poor’s Global, an international credit ratings agency. WVPA will earn more favorable credit spreads from lenders and greater credit capacity from power suppliers. As Wabash Valley Power receives more favorable rates, the long-term costs associated with repayment are reduced, which leads to more affordable costs for WVPA member co-ops.
The S&P credit rating is similar to a person’s credit score: organizations with a higher S&P rating can receive more financing at more favorable rates than organizations with lower ratings, similar to the way that a person with a high credit score can receive more affordable rates on a mortgage or loan.
“It means a lot to have an independent party like S&P give such a strong rating about our ability to meet our commitments,” said Jeff Conrad, chief operating officer for Wabash Valley Power. “Their assessment is highly valued in the credit markets, and reinforces that we are in a strong financial position.”
S&P’s highlights for upgrading WVPA’s rating include:
• Long-term contracts with its 23 member co-ops
• Diverse customer base that includes 60 percent of sales to local residents
• Flexible power supply, which includes multiple supply resources and power purchase agreements with the flexibility to purchase energy as needed to meet demand
WVPA received its first credit rating, an “A-”, from S&P Global in 2003. Since then, WVPA has worked to strengthen its long-term financial health, Conrad said. As Wabash Valley Power’s board of directors defined the organization’s strategic priorities in 2017, the board reaffirmed the importance of having financial strength.
“This upgrade is a strong indication that we are executing on our strategy,” Conrad said. “This helps us reduce our costs, which will in turn strengthen the reliable, affordable rates for our member co-ops and all of the families, farms, businesses, and schools that they serve.”