Moody's Affirms Ratings for CMEEC, Transmission Entity; Outlook Remains Stable
July 14, 2020
by Paul Ciampoli
APPA News Director
Posted July 14, 2020
Moody’s Investor Services recently affirmed the Aa3 ratings for the Connecticut Municipal Electric Energy Cooperative’s (CMEEC) outstanding 2012 series A transmission services revenue bonds, and 2013 series A power supply system revenue bonds, as well as the outstanding 2012 series A transmission system revenue bonds of its sister organization, the Connecticut Transmission Municipal Electric Energy Cooperative.
The outlook remains stable.
Moody’s also assigned the Aa3 rating to the forward delivery refunding bonds that were priced by CMEEC and the Connecticut Transmission Municipal Electric Energy Cooperative in late April, which will be used to refund existing debt and will result in more than $9 million in net present value savings on interest payments over the life of the debt, and will also have a positive impact on transmission revenues.
The Connecticut Transmission Municipal Electric Energy Cooperative was created by CMEEC in 2009. As a separate joint action agency, it acquired local transmission assets in order to provide transmission services required by CMEEC for its members and customers. It is governed by the same body as CMEEC. The management and staff of CMEEC operate the Connecticut Transmission Municipal Electric Energy Cooperative and oversee its operations.
In its review, Moody’s noted that CMEEC “benefits from its ability to provide reliable power supply and transmission services under reasonably competitive rates in comparison to similar service providers in the region. These credit supportive traits remain intact as CMEEC transitions under the leadership of a new CEO appointed in December 2019 which further distances itself from [previous] credit negative governance related issues.”
CMEEC and the Connecticut Transmission Municipal Electric Energy Cooperative were also given a rating outlook of stable, which “reflects the smooth transition to a new CEO and effective strategies implemented to cope with [recent] shifts in supply responsibilities.”
Kevin Barber, Chairperson of the CMEEC Board of Directors, said that “this is another affirmation of the positive steps the CMEEC Board has recently taken to strengthen corporate governance and controls,” and that he is “pleased with this ratings affirmation by Moody’s.”
Dave Meisinger, CMEEC Chief Executive Officer, added that “this helps to ensure that CMEEC and its member municipal electric utilities will have competitive access to financial markets, which further positions the CMEEC members to maintain their low retail electric rates.”
Fitch Ratings in May upgraded the CMEEC Issuer Default Rating from “A+” to “AA-“. Fitch also upgraded the ratings of the outstanding bonds of CMEEC and its sister organization, the Connecticut Transmission Municipal Electric Energy Cooperative, from ‘A+’ to ‘AA-’. In addition, Fitch assigned the “AA-“ rating to the forward delivery refunding bonds
CMEEC’s member municipal electric utilities include the Jewett City Department of Public Utilities, Norwich Public Utilities, Groton Utilities, Bozrah Light & Power, Third Taxing District of the City of Norwalk and South Norwalk Electric and Water.