Fitch Ratings has affirmed both the Issuer Default Rating (IDR) and the rating on Oklahoma Municipal Power Authority’s (OMPA) outstanding $459.9 million of outstanding power supply system revenue bonds (2014A, 2014B, 2016A, 2019A, 2021A and 2021B) at ‘A’.
Fitch does not rate the authority’s $70 million of outstanding series 2010B revenue bonds.
The Rating Outlook is Stable.
The rating reflects the very strong credit quality of OMPA’s two largest participants, the city of Edmond, OK and Ponca City, OK, and considers the authority’s leverage profile, which has improved in the past two years after operating income weakened in fiscal 2021 due to the financial impact of Winter Storm Uri.
Fitch expects OMPA’s leverage ratio, measured as net adjusted debt to adjusted funds available for debt service, could rise slightly over the medium term if the utility moves forward with its preliminary plan to debt-finance the construction a new generation resource, the type and scope of which will be determined following completion of an updated integrated resource plan in 2024. The new resource is subject to approval from OMPA’s board of directors and management has conservatively estimated a $150 million debt issuance in fiscal 2026 to fund the construction.
OMPA’s rating also continues to be supported by a well-diversified power supply that historically provided low-cost and reliable capacity and energy, and all-requirements power sales contracts (PSCs) that require the 42 participating utilities to purchase all their energy needs from OMPA.
