Moody's lowers Oglethorpe Power to stable

Moody's Investors Service said it changed the outlook on Oglethorpe Power Corp. to stable from negative and affirmed its senior secured first-mortgage bonds and senior secured tax-exempt revenue bonds at Baa1, issuer rating at Baa2 and short-term rating for commercial-paper at P-2.

The actions primarily reflect the September 26 unanimous vote by co-owners of the Vogtle 3&4 nuclear construction project to proceed under the revised Joint Owners Agreement (JOA) and binding term sheets executed by all the parties involved, Moody's explained.

OPC's budgeting for the project included about $490 million of contingency to absorb the cooperative's share of construction cost increases announced in August and its revised $7.5 billion budget approved on September 26 includes replenishing a portion of the contingency, the agency said.

The action also recognizes the existence of litigation between several companies concerning the project, which could have negative implications for the company's investment in Vogtle 3&4, Moody's said.

These risks are partly mitigated by the terms of the revised joint ownership agreement, the agency said.

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