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Bond Rating for SFPUC’s Power Enterprise Receives Upgrade
Standard & Poor’s upgrades Power Enterprise revenue bonds two levels, allowing the SFPUC to issue debt at lower borrowing costs
Posted Date: 11/15/2018 10:00 AM
San Francisco, CA— Standard & Poor’s (S&P), one of the world’s “Big Three” credit agencies, has upgraded the bond rating for the San Francisco Public Utilities Commission’s (SFPUC) Power Enterprise. The upgrade represents the highest credit rating to date for the division of the agency that provides hydroelectricity to the City’s municipal facilities and renewable energy to residents and businesses. 
“We take financial stewardship seriously and this bond upgrade rating reflects our commitment,” said SFPUC General Manager Harlan L. Kelly, Jr. “Through sound fiscal management, we are protecting ratepayer investments and increasing opportunities to invest in our infrastructure at more affordable borrowing rates.”
After conducting a surveillance review, S&P increased the Power Enterprise’s bond rating two levels, from A+ to AA. The upgrade places the Power Enterprise’s bond rating in the high-grade AA rating category. High credit ratings allow the SFPUC to issue debt at lower borrowing costs.
The higher rating reflects the Power Enterprise’s very strong risk profile—a result of its operational management assessment, solid economic fundamentals and robust debt service coverage metrics. In addition, S&P elected to upgrade the bond rating due to the Power Enterprise’s liquidity and reserves standings, adequate asset quality and diversity, strong environmental compliance, sound rate-setting practices and overall excellence in management, policies and planning.
Along with Water and Wastewater, Power is one of the SFPUC’s three enterprise divisions. For more than 100 years, San Francisco has been receiving 100 percent greenhouse gas-free hydroelectricity generated from the delivery of drinking water to residents and businesses of the San Francisco Bay Area from the Hetch Hetchy Reservoir. That electricity is used to power San Francisco’s streetlights, MUNI, schools, City Hall, the San Francisco Zoo, the San Francisco International Airport and more. 
A financial services agency for more than 150 years, S&P is one of the “Big Three” credit ratings agency, along with Moody’s and Fitch. Collectively, the three evaluate bond interest rates for 95 percent of the market. The Power Enterprise is rated AA- by Fitch, and is not rated by Moody’s.