The Western Minnesota Municipal Power Agency will close Oct. 29 on more than $322 million in taxable power supply refunding bonds. This sale will be used to refinance existing tax-exempt bonds that WMMPA issued primarily to finance construction of the Red Rock Hydroelectric Project that is being built in Iowa along with other projects, according to a news release.
This issue of just over $322 million will have an all-in true interest cost of 3.13%, the lowest in WMMPA history, according to the release. The total savings to Missouri River Energy Services members will exceed $50 million over the term of the bonds. Net present-value savings will be $33 million, or 11.5 percent of the refunded bonds.
WMMPA is the financing agent for and owner of all power supply, transmission, and other projects that are used to serve members of Missouri River Energy Services. MRES is a joint-action agency made up of 61 member municipalities (including Detroit Lakes, Lake Park, Moorhead, Wadena, Henning and Staples) in Minnesota, North Dakota, Iowa and South Dakota.
MRES provides its members with wholesale electricity along with a host of energy-related services. WMMPA is an organization made up of most of the Minnesota members of MRES.
The two organizations have a power supply agreement that entitles MRES to all of the output of WMMPA-owned facilities as well as an administrative services agreement under which MRES provides administrative services on behalf of WMMPA.
MRES Finance Director and CFO Merlin Sawyer pointed to the financial strength of MRES members as a significant feature in why WMMPA bonds carry some of the highest ratings among the nation’s public power joint-action agencies, according to the release. He also noted that the rating agencies consistently point positively to the low-cost power supply, sound financial policies, debt service coverage and diversified generation mix of MRES.