Saturday, January 15, 2005

Nebraska Sells $100 Million Bonds for Wind Project

Article Posted: 01/14/2005 8:27:37 AM
NPPD Sells Bonds To Finance Energy Facility Improvements

Columbus, Neb . – The Nebraska Public Power District has issued $103.6 million of General Revenue Bonds at a premium to be used for financing its new 60-megawatt wind energy facility near Ainsworth, Neb. and for improvements at its 1365-megawatt Gerald Gentleman Station coal-fired facility near Sutherland, Neb.

NPPD recently began construction of the new wind-generating project, which will be the largest of its kind in Nebraska. The 36 wind turbines and related transmission facilities will cost an estimated $81.3 million.

Last year, NPPD began installation of a well field project at Gerald Gentleman Station, to ensure adequate cooling water for the plant in light of drought conditions. The well field project will cost an estimated $12 million.

A second project to rewind one of the generators at Gerald Gentleman Station is estimated to cost $10.7 million. This project involves rewinding the station’s Unit 2 generator’s stator and replacing its excitation system. A stator, as its name implies, is the stationary part of a generator. The excitation system is the part of the generator that initiates current through the stator and begins the generation process.

The remainder of the bond proceeds will be used to pay for financing costs.

Prior to the bond sale, NPPD received favorable ratings from New York rating agencies. Fitch, Moody’s and Standard & Poor’s rated NPPD bonds as “A+”, “A1” and “A,” respectively. The agencies cited NPPD’s low cost generating resources, flexible future power supply alternatives, stable financial profile, competitive wholesale and industrial electric rates, and Nebraska’s status as an all-public power state as credit strengths. They also mentioned certain credit concerns regarding Cooper Nuclear Station performance issues and potential impacts of the drought on NPPD generating facilities.

The bonds will be repaid by NPPD over a period of 20 years, with the initial maturity on January 1, 2007 and the final maturity on January 1, 2026. The bonds were financed at an average interest cost of 4.25 percent. The senior bond underwriter is Lehman Brothers.

Money to repay the bonds will come from the revenues received by NPPD from its wholesale and retail electric customers and from the other utilities that are participating in the wind generation project.