Fitch Affirms Kerrville, Texas Public Utility Board's Electric System Rfdg Revs.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms the 'A+' rating of Kerrville Public Utility Board's (KPUB) $25.2 million electric system revenue refunding bonds refunding bond A bond that is issued for the purpose of retiring an outstanding bond. Issuers refund bond issues to reduce financing costs, eliminate covenants, and alter maturities. See also crossover refunding bonds, prerefunding. , series 2001. The Rating Outlook remains Stable. The rating reflects KPUB's position as a distribution-only system with limited business risk. KPUB receives the majority of its power through a take-and-pay purchased power contract through 2016 with Lower Colorado River Authority The Lower Colorado River Authority or LCRA is a nonprofit public utility that was formed in 1934 by the Texas Legislature. LCRA's mission is to protect people, property and the environment by providing public services for more than one million people in Central and Southeast (LCRA LCRA Lower Colorado River Authority (Texas) ), rated 'A+' by Fitch. KPUB's other strengths include a strong service territory with diverse customer base, solid financial performance, and favorable transfer policy to the city, averaging around 3% of gross revenues. Credit concerns are limited and center mainly on KPUB's sometimes difficult relationship with its power provider. While the current contract with LCRA extends through 2016, KPUB has expressed concern over renewing its power purchase agreement with LCRA and may seek to replace 100% of its power supply at that time. This risk is mitigated by the fact that KPUB's existing debt will be fully paid off in 2014, and other power supply options are likely to be available. KPUB has been purchasing a portion of its power needs away from LCRA under LCRA's Price Select program. This program allows members to buy up to 10% of their energy requirements away from LCRA, or to sell their 10% option to another LCRA member. The portion bought away from LCRA varies annually depending on how many options KPUB purchases from fellow members and the power price offered by other energy suppliers in the region. Recently, this portion approximated 50% of KPUB's energy requirements, but is expected to fall below 20% for 2006. As a result, KPUB's retail rates are competitive with other municipalities in Texas and well below local investor-owned utilities' rates. KPUB is an electric distribution system serving 20,157 customers in a 146 square mile area within Kerr County, TX. It is located on I-10, 65 miles northwest of San Antonio San Antonio (săn ăntō`nēō, əntōn`), city (1990 pop. 935,933), seat of Bexar co., S central Tex., at the source of the San Antonio River; inc. 1837. on the Guadalupe River Guadalupe River A river, about 402 km (250 mi) long, of southeast Texas flowing southeast to the San Antonio River near its mouth on San Antonio Bay. and provides electricity to the cities of Kerrville, Center Point, Ingram, and Hunt. The system purchases 100% of its energy requirements and does not own any generation. |
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