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Public utilities

Vermont Public Utility Commission Approves Green Mountain Power Corporation's Petition for Mortgage Bond Issuance

Strategic Insights

— 2 min read

Green Mountain Power Corporation (GMP) has received approval from the Vermont Public Utility Commission (PUC) to issue up to $60 million in first mortgage bonds. This decision was made pursuant to 30 V.S.A. § 108, which requires the PUC's consent for GMP to mortgage its corporate property or issue bonds with a term of more than one year.

As part of the approval process, GMP submitted a petition to the PUC on June 15, 2022, which was supported by the prefiled testimony and exhibits of Mathieu Lepage. The Vermont Department of Public Service (Department) filed a letter recommending approval of the financing request without a hearing or investigation on July 13, 2022.

The PUC's order, dated August 22, 2022, states that the proposed debt issuance in the form of first mortgage bonds is consistent with the general good of the State and that no hearing or further investigation is needed. The order also consents to the proposed issuance of mortgage bonds and sets out the terms and conditions of the financing transaction.

Key Takeaways:

  • GMP has received approval from the PUC to issue up to $60 million in first mortgage bonds.
  • The bonds will be secured by a first mortgage on GMP's property and will be used to maintain adequate liquidity levels, make additional investments in Transco, and respond to major storm events.
  • The Department recommends that the PUC approve the petition without a hearing, and the PUC's order states that the proposed debt issuance is consistent with the general good of the State.
  • The order does not constitute approval of GMP's capital structure or any particular capital or operating expenditure that GMP may make with the proceeds from any borrowings.
  • GMP shall inform the PUC and the Department of any material change in the terms and conditions of the financing transaction before closing.
  • GMP shall notify the PUC and the Department within 10 days after the financing transaction is complete and within 10 days after the delay draw transaction.

Statistics:

  • GMP proposes to issue up to $60 million in first mortgage bonds.
  • The bonds will be secured by a first mortgage on GMP's property.
  • The projected capitalization of GMP as of October 31, 2022, reflecting the anticipated impact of the proposed issuance is: $843,500,000 in long-term debt, $86,183,864 in short-term debt, and $940,861,137 in common equity.
  • The estimated debt/equity ratio for GMP as of October 31, 2022, is 49.70% / 50.30%.
  • S&P confirmed GMP's unsecured credit rating as A Stable in August 2021, and GMP's secured debt rating from S&P is A Plus.

Sources:

  • Vermont Public Utility Commission. (2022, August 22). Order No. 22-2262-PET. Case No. 22-2262-PET.
  • Green Mountain Power Corporation. (2022, June 15). Petition of Green Mountain Power Corporation for approval to issue first mortgage bonds in an amount of up to $60,000,000, pursuant to 30 V.S.A. § 108.
  • Vermont Department of Public Service. (2022, July 13). Letter recommending approval of the financing request without a hearing or investigation.

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