S&P Global affirms GRU ratings outlook
Press release from GRU
GAINESVILLE, Fla. – S&P Global affirmed GRU’s “A” bond rating and “stable” outlook last week, noting the utility’s ability to cover fixed costs with earnings, “robust” liquidity, consistent customer base, and fuel diversity.
S&P Financial is one of three agencies that determine GRU’s creditworthiness by assigning a rating to the bonds the utility issues to borrow money. Higher bond ratings result in lower borrowing rates. The other two agencies, Moody’s Financial and Fitch Ratings, continue to view GRU as stable.
While affirming GRU’s stable outlook, S&P also noted credit risks, including the ongoing fight over GRU governance.
Several lawsuits have stemmed from a special legislative act that created an independent board, the GRU Authority, to oversee GRU in October 2023. The Gainesville City Commission placed a referendum on the November ballot asking voters inside city limits if they would like to change GRU governance back to the City Commission from the appointed Authority. While the referendum passed, a judge granted a temporary injunction blocking the results from being enforced. The same judge will determine the ultimate outcome at a yet-to-be-scheduled hearing.
S&P also noted high debt and historically high fund transfers to the City as credit risks.
GRU has addressed debt levels by accelerating its 10-year debt-reduction plan. The utility is currently on track to reduce debt by around $400 million over the next 10 years, about $85 million more than its original projections.
The Authority has addressed the general fund transfer, known as the Government Services Contribution (GSC), by reducing the GSC from $15.3 million to $8.5 million.
“We view S&P’s credit opinion as an encouraging sign,” said GRU CEO Ed Bielarski. “S&P’s analyst has expressed concern over the City’s challenge to GRU’s current governance model but ultimately concluded our financial metrics are strong. We are confident the utility is trending upward and the Authority is providing the leadership we need to maintain stable bond ratings moving forward.”
Worth an extra mention:
“S&P Global affirmed GRU’s “A” bond rating and “stable” outlook last week…”
“S&P also noted high debt and historically high fund transfers to the City as credit risks.”
“GRU has addressed debt levels by accelerating its 10-year debt-reduction plan. The utility is currently on track to reduce debt by around $400 million over the next 10 years, about $85 million more than its original projections.”
Of special significance -“The AUTHORITY has addressed the general fund transfer, known as the Government Services Contribution (GSC), by reducing the GSC from $15.3 million to $8.5 million.”
Maybe there is some relief from past frivolous and costly bureaucratic financial incompetence since the City Commission no longer has control over GRU profits.
July 7, 2023:
“Gainesville Regional Utilities (GRU) remained at the “A” level with a stable outlook, according to the latest report by Standard & Poor’s Global Ratings, one of three companies that assign ratings.
The report, released on June 30, lists a series of pros and cons for the utility and notes the uncertain future with a new authority board poised to take control of GRU in October. …”
Does that mean they’re assuming that the ballot measure will somehow survive the legal challenges and the city will take over again?
The Con’s got fired. Anyone at this point that will not recognize the new board and governor did not make the right decision on GRU governance is a loser. A loser bad enough to want GRU to fail. The new board has business intelligence and cares about expenses . That is saving everyone money except the sucker voters that reside in Wokesville.
The failed leaders past and present that are control freaks and money grabbers need to let go and accept their failures. Your fired but still in denial. Do GRU customers have any legal resources to hold them responsible? It is more than evident the Governor has GRU on the right track and the GCC has damaged this community enough.
It’s up to the owners of GRU – the citizens of Gainesville – to fire it’s managers if they wish. They cannot fire the current illegal, pirate board.
The city commissioners are determined to destroy GRU completely. GRU doesn’t just feed city customers, the outlying customers should have a voice also. Corrupt D government always destroys everything it touches.
Utility customers do not have a say in the governance of their provider unless they own them. The “outlying customers” do not own any utility company and will never have a say in ones governance until they do. Are you offering to buy in?
Many have bought in.
Problem is, they’ve been sold out.
The liquidity and financial outlook for GRU ratepayers is not as rosy. NO rate or billing relief of any kind has been delivered or even suggested. GRU ratepayers are sharecroppers beholden to out of town bondholders, bond counsel and the rating agencies. Credit for this lies with Ed, Craig and other such dignitaries.
Credit or blame?
There’s a difference – a BIG difference.
This is not true. The city commission would have raised electric rates by 3% and wastewater rates by 5% to follow the resolution they passed a few years ago. GRUA kept them flat.
True, but the new board has not done a thing to lower rates, which were what the whole issue was about in the first place.
Averting an increase is the first step in lowering the rates. If you’re driving, you can’t put your car in reverse without stopping forward movement.