Moody's conducts periodic review of WMMPA ratings

Moody's Investors Service recently completed a periodic review of the financial ratings of the Western Minnesota Municipal Power Agency (WMMPA).

WMMPA has provided financing for and is the owner of many of the generation and transmission facilities that MRES uses to serve its members. All 24 members of WMMPA also are members of MRES. Formal agreements between the two organizations require MRES to reimburse WMMPA for all costs relating to WMMPA-owned facilities and to preform administrative services on behalf of WMMPA.

This review did not involve a rating committee and is not an indicator of any change in the current WMMPA Moody’s rating or outlook.

Moody’s cited the following key considerations from this review:

• The WMMPA Aa3 rating is underpinned by the strong consolidated credit quality and diverse member base of Missouri River Energy Services (MRES), the ultimate source of repayment for the WMMPA bonds.
• The WMMPA credit profile additionally benefits from sound financial policies, strong liquidity and coverage, and members' low cost of power.
• The agency has additionally taken positive steps to secure future capacity and improve resource diversity, including the ongoing construction of the Red Rock Hydroelectric Project expected to be completed in 2020. Although the project has incurred delays from its original 2018 completion date, the revised cost increase is still only six percent more, and is mostly mitigated by built-in contingencies and the fact that interest during construction is being paid through current rates instead of issued debt.