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PUC sells $429M in water refunding bonds, gains $49M NPV savings; adopts updated debt policies
Summary
The commission heard that about $429 million of water refunding bonds priced recently, producing roughly $49 million in net present‑value savings and affirming the utility's AA/AA‑ ratings. The commission also adopted updated debt management policies and approved multiple contract amendments on the consent calendar.
The commission received finance and policy items including a bond pricing report and an update to its debt management procedures.
Rich Morales, the commission’s debt manager, briefed the commission on a recent pricing of roughly $429,000,000 of water refunding bonds. Morales said the transaction generated about $49,000,000 in net present‑value savings — approximately 10.3% NPV — well above the PUC’s 3% policy threshold. He said the rating agencies (Moody’s and Standard & Poor’s) affirmed the utility’s ratings (AA3 and AA‑, respectively) with stable outlooks after outreach to investors.
Following the briefing, the commission adopted updated debt management policies and procedures. A commissioner moved approval and the motion passed by voice vote.
Additionally, the consent calendar passed and included contract awards and amendments: approval of plans and award of contract WD2615 in the amount of $1,633,030 to M Squared Construction; modification No. 10 to contract WW525 (extension 150 days); and rejection and re‑advertisement of contract WW608 (as WW608R). The commission also approved an airport commissioning contract amendment (CS 127A, +$4,000,000 and +2 years) and an amendment with SPUR for Ocean Beach erosion control (CS 271, +$150,000 and +3 years). All consent items and policy updates were approved by voice vote during the meeting.
Morales said the utility plans an inaugural power revenue green bond issuance for power generation facilities, and that staff will return on April 28 to update the commission on that transaction and the green bond series.
