GVEC Receives Upgraded S&P Rating
Saturday, September 26, 2015
Cooperative positioned for savings and purchasing opportunities Gonzales, Texas– September 22, 2015 –GVEC recently earned an upgraded “AA- stable” rating from one of the world’s top credit rating institutions, Standard & Poor’s Rating Services (S&P). This rating was raised one level from the previous “A+ stable” rating firmly held since 2006.
The Standard & Poor’s rating is a highly recognized metric for financial confidence in the Cooperative’s ability to pay back debt: the higher the rating, the lower the perceived risk GVEC is to leading lenders. Ratings such as this saves significant interest expense in both short and long-term debt financing and is a critical component of the Cooperative’s overall debt management strategy.
“GVEC is one of only a few leading companies in the energy sector to achieve this distinction,” says GVEC General Manager and CEO Darren Schauer. “The Board and staff works prudently to maintain high financial ratings not only to save our member-owners money, but also to open doors to alternative power purchasing options only available to entities with proven credit-worthiness.”
The confirmation of the rating also upholds GVEC as a strong business partner for power marketers looking to enter into purchased power agreements with a financially strong utility. This will be especially important to the Cooperative as it makes the transition away from the Lower Colorado River Authority (LCRA) as its primary wholesale power provider and begins self-managing its wholesale power purchase supply as of June 2016.
Confidence in the completed preparations for the transition from LCRA as well a thoroughly planned future wholesale power supply strategy were two key elements contributing to the stable financial outlook for GVEC. S&P commented in the summary report, “The upgrade reflects our view that with its future power supply arrangements settled once it moves away from LCRA in 2016, the utility should be able to P.O. Box 118 825 E. Sarah DeWitt Drive Gonzales, TX 78629 Page 2 sustain its strong financial risk profile.” S&P also cited factors such as a “history of very strong financial metrics” and “strong residential growth” among other considerations supporting their decision.
Schauer adds, “Most importantly, the upgraded rating is an indicator to our member-owners GVEC is operating in a fiscally responsible manner. Financially, their Cooperative is positioned well for future savings and purchasing opportunities that will contribute to keeping electric rates reasonable and affordable.” GVEC is a progressive cooperative specializing in the delivery of products and services that empower the people and communities in the Guadalupe Valley. Offering dependable electricity, high-speed Internet, efficient appliances, reliable AC/Heating sales and service as well as solar options, GVEC serves over 85,000 consumers through five customer service locations in Cuero, Gonzales, La Vernia, Schertz, and Seguin.
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