South Texas Electric Cooperative Rating Remains On CreditWatch Based On ERCOT Uncertainty

SAN FRANCISCO (S&P Global Ratings) April 30, 2021--S&P Global Ratings' 'A' issuer credit rating (ICR) on South Texas Electric Cooperative (STEC) remains on CreditWatch, where it had been placed with negative implications on March 3, 2021. "The rating remains on CreditWatch with negative implications despite a slightly net unfavorable outcome from the storm, because of the continued uncertainty associated with several factors facing the cooperative and many other Electric Reliability Council of Texas (ERCOT)-based utilities," said S&P Global Ratings credit analyst Paul Dyson. Areas of uncertainty include billing disputes among participants in the ERCOT market; risk of customer and/or counterparty payment default; ERCOT short-pays and potential uplift charges, which reflect socialization of costs; and an uncertain legislative environment. The severe

...April 30, 2021 SAN FRANCISCO (S&P Global Ratings) April 30, 2021--S&P Global Ratings' 'A' issuer credit rating (ICR) on South Texas Electric Cooperative (STEC) remains on CreditWatch, where it had been placed with negative implications on March 3, 2021. "The rating remains on CreditWatch with negative implications despite a slightly net unfavorable outcome from the storm, because of the continued uncertainty associated with several factors facing the cooperative and many other Electric Reliability Council of Texas (ERCOT)-based utilities," said S&P Global Ratings credit analyst Paul Dyson. Areas of uncertainty include billing disputes among participants in the ERCOT market; risk of customer and/or counterparty payment default; ERCOT short-pays and potential uplift charges, which reflect socialization of costs; and an uncertain legislative environment. The severe winter event in February 2021 has brought into sharper focus a spectrum of ESG-related risks that may inform our credit analyses...

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