Moody’s affirms Basin Electric’s A-1 rating

Moody’s has affirmed Basin Electric’s long-term senior secured bond rating of “A-1” with a stable outlook.

In its Dec. 2 opinion, Moody’s states, “Basin’s A2 Issuer Rating and its A1 senior secured debt rating reflect its conservative financial management and rate setting autonomy and strategies, which, on average, have supported generally sound historical financial metrics that have largely been above the minimum levels established in its first mortgage bond indenture and bank credit agreements.”

Basin Electric’s membership structure and contracts were key contributors to the rating. “Basin’s strong member relationships and member diversity also benefit its credit profile, best evidenced by member participation under long-term wholesale power contracts,” the opinion states.

According to Steve Johnson, Basin Electric senior vice president and chief financial officer, maintaining strong ratings is integral as the cooperative meets growing load requirements.

“The financial community sees Basin Electric is very strong and in a good position to repay outstanding obligations,” Johnson says.

In recent years, Basin Electric has added about 700 megawatts (MW) of natural gas-fired intermediate and peaking capacity (mainly, the Deer Creek, Groton, Culbertson, and Pioneer Stations) and plans to add another 90 MWs of natural gas peaking capacity at the Lonesome Creek Station during 2015. Under current demand growth expectations, the cooperative is forecasting a need for another 100 MW of peaking capacity in each of the years 2017 and 2018 and 650 MW of combined cycle capacity in 2019 or possibly later depending on the pace of demand growth.

This rating comes following the cooperative’s annual visit to the financial community in New York City. Johnson participated in the visits, together with Basin Electric CEO and General Manager Paul Sukut, Basin Electric Board President Wayne Peltier, Basin Electric Board Vice President Kermit Pearson, Dakota Gas Board Chair Don Applegate, Dakota Gas Board Vice Chairman Arden Fuher, and Dakota Gas Board Treasurer Allen Thiessen.