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Outlooks On Four U.S. Muni Retail Electric, Gas Utilities And Electric Coop Utilities Revised To Stable From Positive

Outlooks On Four U.S. Muni Retail Electric, Gas Utilities And Electric Coop Utilities Revised To Stable From Positive

NEW YORK (S&P Global Ratings) April 16, 2020--S&P Global Ratings today revised the outlooks on certain long-term debt ratings in the U.S. Public Utilities sector to stable from positive. S&P Global Ratings has affirmed the ratings and revised the outlooks to stable from positive on the following public utilities: Bryan Texas Utilities (BTU) electric system, Garland Power & Light (GP&L) electric system (both in Texas), Georgia Transmission Corp. (GTC), and Southern Illinois Power Cooperative (SIPC).

The outlook revisions to stable from positive of each issuer follows our updated overall view of the Public Utilities sector due to the COVID-19 pandemic. We believe credit quality among U.S. municipal retail electric and gas utilities and electric cooperative utilities will be pressured, as these utilities are increasingly vulnerable to the potential economic effects of the pandemic. In our view, widespread efforts to stem the spread of COVID-19 and protect the population's health and safety, which we view as a social risk under our environmental, social, and governance (ESG) factors, could lead to budgetary challenges and pressure cash flows and liquidity.

The stable outlooks reflect our view that each utility will be able maintain its current rating despite the challenges presented by COVID-19. Specifically, we believe that each utility's revenue stream is primarily residential and provides a more predictable revenue stream compared to utilities with significant commercial and industrial revenue concentration. Other factors that support the stable outlook include each utility's robust liquidity position that can help cushion the effects of budget variances. In addition, the cooperative utilities benefit from serving extremely diverse revenue streams across numerous counties.

We do not anticipate raising the rating over the next two years as a result of the challenges and uncertainties presented by COVID-19. As the pandemic spreads and the recession deepens, operating stress may grow, demand may decline, delinquencies may increase, and the general government (in some cases) may look to the utility to provide greater assistance in support of its operations--plugging revenue shortfalls or funding increased operating expenses. At this time and in our view, these risks serve to constrain credit improvement.

BTU is a vertically integrated electric system serving 38,760 retail customers. GP&L provides retail electric distribution service to 70,960 customers. GTC is a cooperatively owned transmission system that serves the transmission needs of Oglethorpe Power and GTC's 38 electricity cooperative distribution system members throughout 152 counties of the 159 in Georgia. SIPC is a generation and transmission cooperative serving seven-member distribution cooperatives across portions of 35 counties.

S&P Global Ratings recently revised the outlook for the U.S. Public Utilities sector to negative from stable due to the COVID-19 pandemic (see "All U.S. Public Finance Sector Outlooks Are Now Negative," published April 1, 2020, on RatingsDirect).

Four U.S. Municipal Retail Electric And Gas Utilities And Electric Cooperative Utilities
U.S. Municipal Retail Electric and Gas Utilities
Credit State Current Rating Current Outlook Previous Outlook
Bryan TX A+ Stable Positive
Garland TX A+ Stable Positive
Electric Cooperative Utilities
Credit State Current Rating Current Outlook Previous Outlook
Georgia Transmission Corp. GA AA- Stable Positive
Southern Illinois Power Cooperative IL BBB Stable Positive

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at for further information. Complete ratings information is available to subscribers of RatingsDirect at All ratings affected by this rating action can be found on S&P Global Ratings' public website at Use the Ratings search box located in the left column.

Primary Credit Analyst:Scott W Sagen, New York (1) 212-438-0272;
Secondary Contact:Jeffrey M Panger, New York (1) 212-438-2076;

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