PUC reports strong bond sale for WESIP, low interest rates promised long‑term savings

Deputy Chief Financial Officer Charles Pearl told the commission that the fourth sale of WESIP bonds — part of an overall financing program to fund the Water Enterprise system improvements — drew strong market demand and produced historically low interest rates.

Pearl said the June 9 sale of roughly $489 million included three series: approximately $57 million for the Automated Metering Infrastructure (AMI) project (Series A), $418 million for the Water System Improvement Program (Series B) and a small refunding series (Series C). The blended interest rate for the sale came in at about 3.84 percent, and Pearl said the lower rates are expected to save ratepayers roughly $100 million over the 30‑year life of the financed projects.

The Series B Build America Bonds carried a federal subsidy that reduced net cost; a portion of outstanding debt was refunded as well, producing shorter‑term savings on refunded debt. Pearl said Wells Fargo and Barclays were among bidders and that the PUC would return with the next bond sale request in July to complete previously approved issuance authorization.

Commissioners asked whether the PUC should accelerate bond sales to capture low rates; staff cautioned that issuing debt earlier requires revenue to service the debt and could shift rate burdens, so the commission has balanced some front‑loading of issuance to meet contract needs against rate impacts.

Next step: staff will present the next bond sale (the remaining approved authorization) in July and continue monitoring market conditions and rate impacts.