The Omaha Public Power District issued $549.8 million in bonds to finance capital expenditures and refund previous issuances.
The 2023 bonds mature between 2025 and 2053, yielding between 3.61% and 4.75%. They received a rating of Aa2 from Moody’s Investors Service and AA from S&P Global Ratings.
The rating reflects the “utility’s strong service area that has proven resilient through economic cycles, competitive rates, and strong debt service coverage (DSCR) and liquidity,” Moody’s analysts wrote.
The issuance comes as an increasing number of electric utilities across the country turn toward renewable energy.
In 2019, the district pledged to achieve net-zero emissions by 2050 and approved a proposal to implement a series of changes to its generation portfolio to incorporate more solar power; the plan calls for the creation of between 400 and 600 megawatts (MW) of utility scale solar generation. The district also agreed to retire three natural gas-powered generation facilities, while committing to adding up to 600 MW of natural gas for backup generation. The changes will result in a 30% reduction in carbon dioxide emissions from 2010 levels, according to district estimates. About one-third of the district’s current energy sales come from renewables.
Proceeds from the issuance will finance expenditures associated with the utility’s capital plan. The bonds will also refund securities issued in 2014.
The Omaha Public Power District serves more than 800,000 people in Omaha and its surrounding territories. It is the largest power utility in the state. The bonds are payable by revenue from the electricity utility.
Goldman Sachs & Co, LLC and Wells Fargo Bank, NA, served as lead underwriters on the issuance, purchasing the bonds for $576.5 million. The price reflected a premium of $28.6 million and a discount of $1.9 million.