FitchRatings reaffirms Tri-State’s financial ratings and outlook
- Investment grade long-term issuer rating and short-term debt rating affirmed at A- and F1.
- Outlook remains stable as Tri-State implements components of its Responsible Energy Plan.
(June 23, 2021 – Westminster, Colo.) Fitch Ratings on Wednesday reaffirmed Tri-State’s long-term issuer rating at A- and short-term rating at F1. Fitch also maintained Tri-State’s ratings outlook at Stable.
Tri-State’s long-term ratings remain classified as investment grade, and Tri-State’s short-term commercial paper ratings remain TIER 1 with Fitch.
“Tri-State maintains very strong revenue defensibility characteristics including its all requirements wholesale service contracts, strong purchaser/member credit quality, and a low operating cost burden,” the report indicated. “Tri-State's financial profile is also strong, supported by sound operating cashflow, liquidity and leverage for the past five years.”
The Fitch report also notes that Tri-State power supply mixture is rapidly changing, as it continues to implement its Responsible Energy Plan (REP), which has accelerated retirements of coal-fired generation and adds significant renewable energy resources.
Tri-State's REP includes a resource plan in Colorado calling for 80% reduction in emissions associated with wholesale electricity sales by 2030, to achieve state and association member goals, and a system wide 50% renewable energy target by 2024.
Fitch noted that Tri-State’s board of directors approved a member-developed partial requirements option in October 2020, as a component of its REP, and Tri-State filed the partial requirements option for approval with the Federal Energy Regulatory Commission (FERC).
Tri-State conducted its first “open season” in May 2021, and three members expressed interest in the initial partial requirement offering for 209 megawatts of the available aggregate of 300 megawatts.
The Fitch report also cites several challenges that negatively affect Tri-State’s credit rating profile, including legal and regulatory disputes regarding a member exit fee methodology proposed by Tri-State with the FERC.
“Our Responsible Energy Plan achieved significant milestones, which have been recognized in the Fitch report. We are confident in our path forward to resolve member issues, as we transition to clean energy and continue to provide member contract flexibility, while also ensuring the financial strength of our cooperative,” said Duane Highley, CEO for Tri-State.
Tri-State’s debt ratings are closely aligned with other regional utilities. Tri-State’s ratings remain at or above most other non-municipal utilities in the region.
Tri-State is power supply cooperative of 45 members, operating on a not-for-profit basis, including 42 utility electric distribution cooperative and public power district members in four states that together deliver reliable, affordable and responsible power to more than a million electricity consumers across nearly 200,000 square miles of the West. For more information about Tri-State, visit www.tristate.coop.
Certain information contained in this press statement are forward-looking statements including statements concerning Tri-State’s plans, future events, and other information that is not historical information. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described from time to time in Tri-State’s filings with the Securities and Exchange Commission. Tri-State’s expectations and beliefs are expressed in good faith, and Tri-State believes there is a reasonable basis for them. However, Tri-State cannot assure you that management’s expectations and beliefs will be achieved. There are a number of risks, uncertainties and other important factors that could cause actual results to differ materially from the forward-looking statements contained herein.