Electric Revenue Refunding Bonds

Electric Bonds Saving Ratepayers Millions

On May 9, 2018, Energy Northwest priced $633 million of electric revenue refunding bonds for the Columbia Generating Station and Project 3, the largest deal in the week’s approximately $7.2 billion of U.S. municipal bond and note sales. The Bonds were rated Aa1 by Moody’s Investor Service, AA- by S&P Global Ratings and AA by Fitch Ratings.

The Columbia Generating Station is a nuclear generator that is the third largest electricity generator in the state behind Grand Coulee and Chief Joseph dams. The Columbia Generating Station is equivalent to approximately 10% of the electricity generated in the state and is the only commercial energy facility in the region and provides output through the Bonneville Power Administration (“Bonneville”). Project 3 is a partially complete nuclear facility approximately 70 miles southwest of Seattle. All bonds are secured by revenues from Bonneville.

The bonds were the latest in what is known as “Regional Cooperation Debt.” Since 2001, Energy Northwest and Bonneville have worked together to refinance certain maturities of outstanding bonds of the Columbia Generating Station, Project 3 and Project 1 (known as the “Net Billed Bonds”) to allow Bonneville to pay back higher interest federal debt earlier than planned for savings purposes. In 2014 through 2017, Energy Northwest issued approximately $1.4 billion of bonds under the Regional Cooperation Debt approach. These refinancings made available to Bonneville additional funds near the end of Fiscal Years 2014 through 2017, which enabled Bonneville to advance the repayment of an additional $2.2 billion of its Federal Appropriations Repayment Obligations over the amounts Bonneville was scheduled to repay for the related rate period. The amounts prepaid bore interest at a rate higher than the rates of interest on the refunding Net Billed Bonds issued by Energy Northwest in Fiscal Years 2014 through 2017.

Energy Northwest 

Formed in 1957 by the Washington state legislature, Energy Northwest is a public power joint operating agency of 27 public utility districts and municipalities across Washington state, including Seattle and Tacoma. The agency takes advantage of economies of scale and shared services to help create efficiencies and operate at a lower cost. 

With four electricity generating facilities, including White Bluffs Solar Station, Packwood Lake Hydroelectric Power, Nine Canyon Wine Project and Columbia Generating Station, Energy Northwest serves more than 1.5 million customers through the generation of nuclear, wind, hydro and solar power. 

Foster Pepper was pleased to represent long-time client Energy Northwest as bond and disclosure counsel on this deal.