Press Release|Public Finance
KBRA Affirms AA+ Rating, Stable Outlook on Power Authority of the State of New York (NYPA) General Resolution Revenue Bonds
10 Sep 2025 | New York
KBRA affirms the long-term rating of AA+ on General Resolution Revenue Bonds of the Power Authority of the State of New York (NYPA). The Outlook is Stable.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- NYPA is New York State’s lowest cost power producer, with well-maintained, environmentally clean hydroelectric generating assets that account for over 70% of the State’s renewable energy.
- Financial strength and resiliency is demonstrated through sound operating margins, ample liquidity, strong debt service coverage, and favorably low debt ratios.
- Leverage is expected to remain manageable throughout the capital plan, as NYPA’s use of the SFP Transmission Bond Resolution is expected to limit borrowing under the General Resolution.
- Authority operations benefit from a sophisticated and proactive management team with industry-leading enterprise risk management capabilities.
Credit Challenges
- The Authority operates in a complex, capital-intensive environment, requiring management of exposures to energy, capacity, and fuel price variability, water flow volatility, enterprise level and operating risks, merchant sales exposure, decarbonization risks, and regulatory requirements.
- Financial and programmatic obligations, as well as restrictions to the Authority’s powers, rights, and exemptions from regulation under the Power Authority Act can be imposed on the Authority by action of the State Legislature.
- Net income is dependent on hydropower generation at NYPA’s Niagara and St. Lawrence-FDR projects. The potential for an increase in the relative cost of producing hydropower, whether due to competing renewable technologies or to generation levels at its large hydroelectric facilities, poses risk to NYPA’s competitive position and net income.
Rating Sensitivities
For Upgrade
- Further upward migration of the rating is unlikely at the current rating level.
For Downgrade
- A material erosion in the Authority’s hydropower cost advantage that negatively impacts its competitive position.
- Substantial delay in meeting the responsibilities of the State’s CLCPA, including maintaining its hydropower contribution, decarbonizing its small, natural gas-fired peaker plants by 2030, and ensuring sufficient reliability to meet demand.
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