City council approves $80 million RPU bond issue
March 6, 2007
By Bob Freund
The Post-Bulletin

Anti-pollution equipment will be added to Silver Lake Power Plant as part of a bond issue approved by the Rochester City Council.
Electricity users will help repay those bonds with an additional monthly charge on their bills that's still being calculated. However, on average the Silver Lake portion could increase an average customer's monthly bill by $1.32. They could see the increase as early as April, according to prior estimates from Rochester Public Utilities.
The Rochester City Council approved the issuance of bonds at its Monday night meeting, allowing RPU to raise $80.1 million. They will be repaid from revenue generated by RPU, not from property taxes or other city sources.
The revenue bond will raise money for two purposes:
Anti-pollution equipment at the Silver Lake power plant, which costs about $34 million itself, plus other future improvements to the city's electrical network of about $12 million, totaling $46.1 million.
Refinancing a 2000 bond issue currently scheduled to mature in 2011. The new bond would carry a lower interest rate, saving RPU and its customers about $2.9 million from the original schedule, according to RPU consultant David MacGillivray of advisory firm Springsted at St. Paul.
The refinancing adds about $34 million to the loan overall.
The exact monthly increase on on consumers' bills can't be figured until RPU officials know how much interest will have to be paid. That estimate could come later this week or next week after the bonds are sold. MacGillivray estimates the interest rate will be less than 4.9 percent.
The second portion most likely will save RPU some money, which could help to limit its rates.