Good news for Lodi Electric Utility

National credit rating agency, Fitch Ratings, has boosted its rating of Lodi Electric Utility from BBB to BBB+.

Fitch announced the ratings change today and the city of Lodi was quick to issue its own statement saying the rating change was another sign of the improving financial condition of Lodi Electric Utility.

An improved credit rating helps the city purchase electricity at better rates and should lower the expenses of refinancing the utility's debt of more than $63 million, according to the statement released by the city.

"The City Council has worked hard to strengthen the utility, implementing the changes recommended by the financial community and city staff," Lodi City Manager Blair King said in the statement. "We'll continue taking the steps we need to ensure stability for ratepayers and the utility in the future.

Fitch's improved rating comes after the nation's other leading rating agency, Standard and Poor's, raised its rating from BBB+ to A-.

Fitch may also improve Lodi Electric Utility to an A level rating if the city continues to strengthen its financial position.

Key to the improved ratings are the utility's growing cash reserves. Fitch noted that the utility had a cash reserve of $11.2 million in March of this year. In 2006, the utility had a reserve of $1.7 million.

For more of this story, see Thursday's News-Sentinel.

First published: Wednesday, July 2, 2008