Standard&Poor's Ratings Services affirmed its 'A+' underlying rating (SPUR) on Southern California Public Power Authority's (SCPPA) San Juan power project revenue bonds. The 'A+' rating reflects: The credit strengths of the participant cities and the "take-or-pay" power sales contracts, which unconditionally require the cities to pay operations and debt service on the project from operational expenses; The unlimited step-up nature of the take-or-pay contracts, although this obligation is discharged through a budgetary mechanism and not through a direct increase in participants costs; and Strong project performance, including a favorable overall cost of the project. Offsetting these strengths is a rate covenant that requires only 1.0x coverage of debt service charges, operational expenses, and any required deposits to the
