Moody's lifts PowerSouth view to stable

Moody's Investors Service said it revised the outlook on PowerSouth Energy Cooperative (PowerSouth) to stable from negative.

Moody's also said it affirmed Power South's long-term ratings, including the A3 rating for PowerSouth's Gulf Opportunity Zone Refunding Bonds, series 2010A, which were issued by the Industrial Development Board of the Town of Chatom on behalf of PowerSouth and are senior secured obligations under the cooperative's mortgage indenture.

The agency also affirmed PowerSouth's issuer rating at Baa1.

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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