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May 22, 2020

Adjustment brings bond rating in line with ratings by fellow rating agencies

Standard & Poor’s (S&P) has issued a new bond rating for Lubbock Power & Light (LP&L), adjusting the long-term rating on Lubbock’s municipally owned electric utility’s revenue debt from ‘AA- to A+.’ S&P listed the long-term outlook on LP&L as stable. This rating action by S&P brings their rating in line with LP&L’s strong bond ratings by Moody’s Investor Service and Fitch Ratings.

S&P’s decision to adjust LP&L’s bond rating by one notch is due to their revised "U.S. Municipal Retail Electric and Gas Utilities" criteria. The action for LP&L comes as S&P has placed the electric industry as a whole on ‘negative outlook’ due to current economic pressure stemming from COVID-19. Among the factors listed by S&P in their rating action, the agency cites revised financial ratios in the above mentioned criteria and industry-wide economic impacts of the coronavirus pandemic (COVID-19) as reasons for their rating change. S&P goes on to cite strong operational management, financial position, and pandemic response as reasons to place a stable outlook on Lubbock’s electric utility.

The rating action taken by S&P is not anticipated to have an impact on LP&L ratepayers. Additionally, the utility continues to make investments in the reliability of Lubbock’s electrical grid and implement new technology to improve service for its customers. Work to complete LP&L’s historic transition to the ERCOT market on May 31, 2021 remains on schedule and will serve to accomplish the long-term goal of providing Lubbock citizens with reliable and affordable Texas power for generations to come.