Fitch Ratings affirmed SPP’s long-term debt rating at A (third-highest) and its short-term grade at a top-ranked F1. Fitch said approximately $267 million of SPP debt was affected by the rating action, which came with a stable rating outlook.

Fitch said the ratings reflect SPP’s predictable cash flows as a result of its FERC-approved Tariff, which provides for the full recovery of all costs. It also cited the low business risk of its transmission operations, the investment-grade credit worthiness of its members and FERC’s “supportive federal regulatory environment.”

Fitch found SPP’s current liquidity position to be “sufficient,” with a $30 million unsecured revolving line of credit and approximately $43 million of unrestricted cash and cash equivalents.

Fitch said SPP’s voluntary membership remains “a modest credit concern,” which is mitigated by exit fees “equal to its share of SPP’s outstanding debt and other committed expenses.” Fitch also noted SPP’s exposure to a market participant’s payment default “is minimized by the collateral requirements as well as bylaws that allow for costs of the default to be spread among the remaining market participants.”

— Tom Kleckner