Eugene Water and Electric Board secures AA- rating on $168 million bond sale

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EWEB secures AA- bond rating

Highlights

Fitch assigns 'AA-' rating to $168 million EWEB electric utility system revenue and refunding bonds, series 2026, pricing June 9, Outlook Stable.
Bond proceeds will fund Carmen-Smith Hydroelectric Project relicensing, refinance series 2012 and 2016A bonds, and cover issuance costs.
EWEB's strong revenue base, 1.1% annual customer growth, and long-term BPA supply contract support affordability, with leverage expected to stay below 8.0x despite increased capital spending.

Bond financing plan and credit assessment

As reported by Fitch Ratings, the agency has assigned a 'AA-' rating to about $168.0 million of electric utility system revenue and refunding bonds, series 2026, being issued by the city of Eugene on behalf of Eugene Water and Electric Board, or EWEB. Bond proceeds fund part of the capital expenditure tied to relicensing the Carmen-Smith Hydroelectric Project, refinance the utility's series 2012 and 2016A bonds for savings if market conditions allow, and pay issuance costs. The bonds are expected to price on June 9.

Fitch has also affirmed its 'AA-' ratings on roughly $230 million of outstanding parity bonds and assessed EWEB's Standalone Credit Profile at 'aa-'. The agency says the standalone profile reflects the electric system's credit quality independent of the city of Eugene, while the overall Rating Outlook remains Stable.

The bonds are payable from, and secured by, a pledge of net revenue generated by the operation of EWEB's electric system. Fitch says the rating reflects a consistently strong financial profile that is expected to continue even as the utility undertakes higher capital spending over the next five years.

Rate flexibility and operating profile support outlook

Fitch says EWEB benefits from a strong revenue base anchored by essential retail electricity sales, with wholesale sales providing an additional, though more competitive, source of income. The service territory is centered on Eugene, home to the University of Oregon, and customer growth has averaged 1.1% over the past five years.

The agency describes EWEB's rate flexibility as very strong because the board has independent rate-setting authority and electricity remains highly affordable. Fitch says average annual electric bills historically account for about 2.1% of median household income in most years, and it expects only moderate rate increases as the utility funds capital spending and recovers higher power costs linked to poor hydrology conditions through 2024.

Operating risk is assessed as very low, supported by low operating costs and a long-term power supply arrangement with Bonneville Power Administration that provides about 80% of EWEB's total energy supply and now runs through 2044. Fitch says leverage edged down at year-end 2025 on stronger cash flow, and while planned borrowing is expected to push leverage modestly above historical levels, it should remain below 8.0x, with coverage and liquidity staying broadly in line with past performance and internal financial policies.

We previously reported on Fitch’s 'AAA' rating assignment to Virginia Beach’s roughly $111.7 million water and sewer system revenue and refunding bonds, alongside the affirmation of the city’s outstanding system debt at the same level with a Stable Outlook. That update highlighted the system’s manageable leverage expectations as borrowing rises in fiscal 2026, supported by a broad customer base and long-term supply and regional wastewater arrangements that underpin revenue stability.

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