Huntsville Utilities downtown headquarters
Huntsville Utilities' downtown headquarters on Church Street.
( Huntsville Times)
Huntsville Utilities has earned a high bond rating from Wall Street in advance of borrowing $105 million for a new water treatment plant and related water system improvements.
The utility's Series 2015 Water Revenue Warrants - which are being sold to pay for construction of the plant in rural Marshall County - were recently rated "Aa1" by Moody's Investors Service.
In a Thursday news release, Huntsville Utilities said the Moody's rating reflects its "healthy financial position, including strong debt service coverage and solid operating ratios."
This is the utility's second consecutive bond issue rated Aa1. That's just a notch below Moody's best-possible Aaa rating.
Huntsville Utilities CEO Jay Stowe. (File photo)
"We're excited to maintain this high rating," said Huntsville Utilities President and CEO Jay Stowe. "As we plan for our future to continue providing safe, reliable, and high-quality water to our customers, the system growth being funded by these warrants will help Huntsville continue to thrive and grow for years to come."
Scheduled to open in the summer of 2018, the new plant will initially treat 24 million gallons of water per day siphoned from the Tennessee River near Guntersville Dam. As Madison County's thirst for water grows, it can be expanded to churn out as much as 96 million gallons daily.
Stowe has estimated the total cost of the project at $115 million, including about eight miles of new underground pipes to get the clean water to utility customers in Madison County.
Huntsville Utilities raised water rates in January 2013 to help pay for the mammoth construction project. The rate increase is adding $9.71 to the average residential customer's monthly water bill over a period of about four years.
Utility spokesman Joe Gehrdes said construction on the new treatment plant has already started. The general contractor is Brasfield & Gorrie of Birmingham.