The 'A+' Standard&Poor's underlying rating (SPUR) on Southern California Public Power Authority's subordinate-lien revenue bonds, issued for the Palo Verde Project, has been affirmed. Debt service on the Palo Verde Project bonds is supported by payments made by the 10 California cities that participate in the project. The 10 cities must treat Palo Verde Project debt service and operating expenses as operating expenses of their own electric systems. The rating reflects: The credit quality of the California municipal electric systems that are severally obligated to pay the Palo Verde Project debt service; The unlimited step-up nature of the take-or-pay purchase-power contracts, which unconditionally require the cities to pay operations and debt service on the project; and The importance
