NEW YORK, Jun 02, 2006 -- BUSINESS WIRE

 

Volatile and higher energy and fuel commodity prices represent a challenge to electric utilities, including public power utilities, according to Fitch Ratings. In a newly released report, Fitch said this issue affects all public power credits and if not addressed effectively, could result in negative rating actions.

The report highlights the increasing importance of cost recovery for public power utilities, explains the extent that selected utilities have been able to recover costs over the past year, and outlines the characteristics of utilities most vulnerable to negative rating pressure in a higher cost environment.

Fitch believes timely recovery of fuel costs is essential to an electric utility's creditworthiness and that its response to high and volatile cost pressures will be a key determinant to a utility's credit quality and rating in 2006 and beyond.

The full report 'Cost Recovery and Public Power,' dated June 1, 2006, can be found at 'www.fitchratings.com' under the 'U.S. Public Finance' tab and 'Special Reports'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

SOURCE: Fitch Ratings

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