DUFF & PHELPS: SOUTHERN MINNESOTA MUNICIPAL POWER AGENCY $287.515 MILLION POWER SUPPLY SYSTEM REVENUE BONDS, SERIES 1993 A RATED 'A+'
CHICAGO, March 5 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of "A+" (Single-A-Plus) to Southern Minnesota Municipal Power Agency's (SMMPA) proposed issuance of $287.515 million of power supply system revenue bonds. The issue, which may be increased, will have maturities serially to 2016 and will refund similar bonds. The bonds are secured by a first lien pledge on gross revenues generated from the ownership and operation of SMMPA's system. Revenues are primarily derived from payments under all-requirements (originally capped at 1999 levels) "take-and-pay" power sales agreements with SMMPA's 18 members to the year 2030. With minor exceptions, the power sales agreements require each member to purchase, and SMMPA to supply, the total power and energy required by each member's system through 1999. Thirteen members have elected to extend the total requirements provision of their original agreements to 2030. The remaining five members remain under contract to 2030 at their 1999 requirements level. The contract terms and indenture covenants ensure long-term continuity. Rates are comparable to those of neighboring electric systems and are expected to remain competitive. Member rates for energy are set by SMMPA under all-requirements contracts which cover SMMPA's revenue requirements, including the debt service on its bonds. Member rates to customers must be set to cover these, as costs senior to their other costs. Construction requirements are minor. SMMPA's main power source is the coal-fired Sherburne County Generating Unit 3 (Sherco 3), in which it has a 41 percent (357 mw) interest. This unit comprises most of SMMPA's generating assets and provides about 60 percent of its available energy resources. The relatively high concentration of SMMPA assets is mitigated somewhat by the superior plant operating record of Northern States Power Company, the operator and co-owner of Sherco 3. Costs, other factors being equal, should decline as the unit achieves higher capacity factors as load grows. The balance of SMMPA's power needs is purchased from the Mid-Continent Area Power Pool (MAPP) and other utilities. SMMPA is a municipal joint action agency comprised of 18 members primarily located in south central Minnesota. The Agency was created pursuant to Minnesota statutes enacted in 1976. Major industries in the service area include the Mayo Clinic, a large IBM production facility, and Hormel food processing. -0- 3/5/93 /CONTACT: William A. Abrams of Duff & Phelps, 312-368-3112/
CO: Southern Minnesota Municpal Power Agency ST: Minnesota IN: UTI SU: RTG
GK -- NY028 -- 3474 03/05/93 13:18 EST
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|Date:||Mar 5, 1993|
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