Moody's Investors Service upgraded the Municipal Electric Authority of Georgia’s $2.1 billion of Plant Vogtle Units 3&4 Project J Bonds to A3 from Baa1.
Moody’s revised its outlook to stable from positive at the higher rating.
Moody’s said Tuesday's MEAG action reflects the upgrade of Florida’s
The two public utility agencies in 2020 settled
“Our assessment of Project J's credit quality reflects the significant weighting given to JEA's credit risk given MEAG Power Project J's take or pay contract with JEA during the initial 20 years of the bonds is the sole source of cash flow for the Project J Bonds,” Moody’s said. “The ratings upgrade for JEA factors in the utility's consistently strong financial and operating performance bolstered by significantly addressing prior governance related challenges.”
Moody’s said the MEAG Power Project J Bond rating also considers the favorable federal court ruling in 2020 by a U.S. District Court judge on the validity of the power purchase agreement between MEAG and JEA and the settlement of prior related
“The stable outlook reflects JEA's existing cost competitiveness and very strong financial metrics which provide a cushion for the utility to absorb impending rate increases and higher debt equivalent take or pay costs under the Project J PPA,” Moody’s said. “The outlook also considers JEA's improved relationship with MEAG Power following the settlement of litigation and good prospects for continued improvement in governance under a revamped board and management team that has been established during the past two years."
Still, Moody's said these positive developments are counter-balanced by ongoing construction delays and
Originally to have opened in 2016 and 2017, the Vogtle construction completion is now expected to extend into first quarter of 2023 and the fourth quarter of 2023 for Vogtle Units 3 and 4, respectively.
