When it comes to credit worthiness, South San Joaquin Irrigation District has significantly more juice than PG&E.

Standard and Poor this week gave SSJID an “AA” rating. That comes on the heels of PG&E’s rating for long term debt credit worthiness being dropped from “A-“ to “BBB+”.

That means SSJID’s financial situation, cash flow, and money management makes it a much more creditworthy borrower than PG&E. That means PG&E is considered a lower median grade borrower by investors some seven rating notches below SSJID that is at the top of the high grade scale. There is only one rating level better than what SSJID is at - “AAA” or prime borrower status.

The letters may appear to some as mumbo jumbo. But the better the rating makes a borrower more attractive to investor which in turn means lower interest rates. The higher a risk that a borrower is considered then the higher the interest rate. Both SSJID and PG&E’s current situations are considered stable which means there is no concern on the immediate horizon that either rating wil deteriorate.

Essentially the rating means SSJID will be able to issue low risk debt and borrow with low interest rates. As such it re-enforces the independent PA Consulting report’s conclusion provided to the San Joaquin County Local Agency Formation Commission that the financial feasibility is sound for the district to move forward into retail power delivery.

“Our S&P rating shows that SSJID has a strong ability to repay any debt related to the retail electric plan, at lower interest rates, and that we will be attractive to lenders,” said SSJID General Manager Jeff Shields.  “We consider this great news, especially in the light of a recent credit downgrade for PG&E Corporation and Pacific Gas and Electric Company by Fitch to ‘BBB+’ from its previous ‘A-‘.  PG&E’s rating by Fitch is just above junk or speculative status, which is anything lower than ‘BBB’.  When community members ask what goes into our commitment to saving folks 15% on their electric bills, this is one of the important considerations that make it possible.”

This Friday the LAFCo board will have a workshop on the various SSJID applications made as part of its effort to enter retail power service. The LAFCo board meets at 9 a.m. in the Board of Supervisors Chambers in the sixth floor of the county administrative center at 44 North San Joaquin St. in downtown Stockton.

LAFCo is allowing up to four months reviewing any comments made to the environmental reports prepared in connection with the SSJID application. Based on that, a LAFCo vote on the actual application is expected to happen sometime by this summer.

“SSJID has always been a fiscally responsible, stable organization,” Shields added. “We are known for keeping water rates as low as possible, and our board takes sound financial management very seriously.  We consider our credit rating to be a reflection of our reputation.”