Press Release|Public Finance
View PDF

KBRA Affirms AA Rating, Stable Outlook on the New York Power Authority (NYPA) Green Transmission Project Revenue Bonds

25 Sep 2025   |   New York

Contacts

KBRA affirms the long-term rating of AA on the New York Power Authority (NYPA) Green Transmission Project Revenue Bonds. The Outlook is Stable.

The rating reflects NYPA's successful completion of its initial separately financed transmission projects on-time and within budget, the broad, statewide ratepayer base, and the established and comprehensive cost recovery of the annual Separately Financed Project (SFP) Transmission Revenue Requirement pursuant to a Federal Energy Regulatory Commission (FERC) approved formula rate.

These credit positives are partially offset by the narrow pledge of SFP Transmission Revenues which, while collected on a broad geographic base, include only the regulated, recovered cost of designated SFP Transmission Projects, net of operating expenses, plus liquidity and reserves within the Transmission Bond Resolution. The SFP Transmission Projects are heavily debt financed, and leverage is high but should moderate over the longer term, as the SFP Transmission projects are placed into service.

Key Credit Considerations

The rating was affirmed because of the following key credit considerations:

Credit Positives

  • Eligible SFP Transmission Project costs must be rate regulated (or be expected to become rate regulated), allowing for full cost recoverability and revenue predictability.
  • SFP Transmission revenues are collected through NYISO, whose customers comprise a broad, statewide rate base of about 20 million ratepayers.
  • SFP Transmission Projects are essential to New York State’s ambitious decarbonization strategy.

Credit Challenges

  • SFP Transmission Projects are largely debt-financed and highly levered, although leverage should moderate longer-term, as the SFP projects are put into service.
  • Pledged revenues consist solely of the net revenues of the SFP Transmission Projects plus available liquidity and reserves under the Transmission Bond Resolution.

Rating Sensitivities

For Upgrade

  • A positive change in FERC’s methodology for transmission rates and cost recovery that brings financial coverage materially above budget and the rate covenant.
  • Moderation in leverage as SFP Transmission Projects are completed and placed into service.

For Downgrade

  • While not expected, an adverse change in FERC’s ATRR and Formula Rate methodology for SFP Transmission Projects that is not supportive of the 1.20x minimum DSCR.

To access ratings and relevant documents, click here.

Methodologies

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1011462