S&P Global Ratings affirmed its 'AA-' long-term rating on the Southern California Public Power Authority's (SCPPA) subordinate transmission project revenue bonds outstanding, issued for the Southern Transmission System (STS). The outlook is stable. Revenue from rates and charges collected by the project participants' electric systems in their respective service territories secures the SCPPA bonds. The payment obligations under the transmission service contracts are take-or-pay and constitute operating expenses of the respective project participants, payable solely from their respective electric systems' revenue. Failure by a participant to make payments when due under the contract would likely require the other participants to make larger payments (unlimited step-up payments), and, in some cases, larger debt service payments could deteriorate the credit of those
