Business Profile Scale for Public Power Revised by S&P.NEW YORK--(BUSINESS WIRE)-- Standard & Poor's CreditWire 7/14/97 -- Standard & Poor's has revised its business profile scale for public power agencies to provide investors with more precision in determining each rated utility's ability to compete in a deregulated environment. By expanding the scale range to 1-10 points from the previous 5-point scale, with one being the most capable of competing, investors can better gauge an electric system's ability to meet competitive challenges and to incorporate recent market developments, such as the separation of generation and transmission operations, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Standard & Poor's Public Finance utility analysts. The conversion to a 10-point scale will not affect current ratings. Ratings are an indicator of relative credit risk. The conversion also makes the scale applied to public utilities consistent with the one already used by Standard & Poor's in its analysis of investor-owned utilities. "Since competition related to the deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. of domestic markets is expected to blur blur (blur) indistinctness, clouding, or fogging. spectacle blur the indistinct vision with spectacles occurring after removal of contact lenses, especially non–gas-permeable lenses; it is the lines between public power and investor-owned utilities, Standard & Poor's has applied the 10-point scale to both public power agencies and investor-owned utilities," according to an article explaining the scale in this edition of CreditWeek Municipal. Overall, Standard & Poor's rates 58 retail, and 36 wholesale public power agencies, as well as 122 investor-owned companies. The most favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. business profile scores run from one to four. "This group of utilities is expected to be led by the ones exclusively in the `wires' business," the CreditWeek Municipal article states, identifying Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. Transmission System, rated double-`A' as an example. The transmission companies will generally be regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. at state and federal levels, and the ones with limited fixed-costs will have the lowest levels of risk. Other strongly positioned entities include Tennessee Valley Authority Tennessee Valley Authority (TVA), independent U.S. government corporate agency, created in 1933 by act of Congress; it is responsible for the integrated development of the Tennessee River basin. distributors, such as the cities of Knoxville Knoxville, city (1990 pop. 165,121), seat of Knox co., E Tenn., on the Tennessee River; inc. 1876. A port of entry, it is a trade and shipping center for a farm, bituminous-coal, and marble area. , Nashville Nashville, city (1990 pop. 487,969), state capital, coextensive with Davidson co., central Tenn., on the Cumberland River, in a fertile farm area; inc. as a city 1806, merged with Davidson co. 1963. , and Memphis, all assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. profiles of two. The greatest concentration of risk for retail systems is at the `4' ranking, which would reflect the risks inherent in the ownership of generating facilities, but nevertheless indicates they have a relatively strong capacity to compete. Among public power's retail utilities, nine ranked profiles of 5, the highest level of business risk assigned to any of the retail utilities. Among the wholesale agencies, six had profiles as high as six, and one reached 7 on the 10-point scale. That is still below the 8 ranking assigned to a few investor owned utilities. "Standard & Poor's business profiles and credit ratings are tools for identifying the electric utilities that will be winners and losers in a competitive environment," the rating service said, identifying the utilities with scores between five and eight as the ones most likely to face formidable challenges in the rapidly evolving marketplace. "It is these utilities' cost structures and wholesale and retail rates that show the greatest disparities with expected market rates," according to Public Finance utility analysts David Bodek, Mark Glotfelty, and Marla Fox. When reviewing the public power agencies, Standard & Poor's examines their rate competitiveness; operations; markets served; regulatory environment -- including the scope of protection for their revenue streams provided by bond ordinances and contracts for power supply and sales; and management strengths. Finances are critical to the agency's ultimate rating, the analysts say, noting that a strong financial profile can offset a weak business profile. -- CreditWire CONTACT: David Bodek, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (1) 212-208-1813 Mark Glotfelty, New York (1) 212-208-1352 Marla Fox, New York (1) 212-208-1863. |
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