In 2012, the Kansas Power Pool entered the bond market for the first time with an offering of revenue bonds in the principal amount of $29,135,000 for the purpose of acquiring a 7% share of the Dogwood Energy Facility near Kansas City, Missouri. Moody’s Investor Service provided the initial investment grade bond rating of Baa1 based on its full-requirements members, competitive power costs, long-term power purchase agreements, market purchases, and member-owned generation assets. Moody’s noted KPP’s historically break-even financial margins, its lack of significant assets or leverage, its minimally maintained internal liquidity, and its credit agreement with an unrated bank as reasons for the lower investment grade rating at the time. As a not-for-profit agency, the Kansas Power Pool had little motive to charge its owner/members higher rates to build reserves until facility ownership became a viable option.
Since that first offering, the Kansas Power Pool has issued utility revenue bonds for four subsequent projects, the most recent being in 2015. Moody’s, which noted in its initial report how the KPP could improve its rating, has changed the KPP’s rating from Baa1 to A3, referring to KPP managements willingness and ability to strengthen financial performance through rate increases and improve its liquidity. Moody’s also observed how the KPP has diversified its energy resources to mitigate potential supply risks and has increased its credit line with a new, rated bank. Moody’s outlook for the Kansas Power Pool is stable.
The Kansas Power Pool requested a second bond rating for its most recent financing from Fitch Ratings. This was Fitch’s first rating for a KPP bond issue. Fitch conferred an A- rating with a stable outlook for this bond issue noting the stability of KPP’s operations, its unlimited contract step-up provision, KPP’s competitive wholesale rates, and KPP’s strengthened liquidity.
In 2017, The Kansas Power Pool issued a $9,800,000 tax-exempt advanced refunding on a portion of the 2012A bonds, using private placement.
In 2020, The Kansas Power Pool defeased a portion of its existing bonds with taxable bonds, using private placement.