DUFF & PHELPS: BRAZOS RIVER AUTHORITY BONDS, SERIES 1993 RATED 'AAA'; GULF COAST WASTE DISPOSAL AUTHORITY BONDS, SERIES 1993 RATED 'AAA'
CHICAGO, Ill., Dec. 2 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned ratings of "AAA" (Triple-A) to the $83.565 million and the $16.6 million collateralized revenue refunding bond, Series 1993, offerings from Brazos River Authority (Texas) and Gulf Coast Waste Disposal Authority (Texas), respectively. Both are Houston Lighting & Power Company Projects. The ratings reflect the attachment of insurance provided by Municipal Bond Investors Assurance Corporation (MBIA). Houston Lighting & Power's credit protection measures have strengthened with completion and subsequent recovery of investment in the South Texas Nuclear Project (STP). Houston Lighting & Power is the project manager and a 30.8 percent owner of the two-unit, 2,500 mw STP. Cost containment programs, manageable construction outlays, and refundings should partially mitigate the negative effect on credit protection measures as a result of the unscheduled STP outage. The plant has been down since February 1993, due to equipment problems and a backlog of maintenance items. In June, the plant was added to the Nuclear Regulatory Commission's (NRC) "Watch List," as a Category II. The Category II designation deems that increased NRC attention is warranted, but allows for full plant operation. However, approval from the regional NRC office will be necessary to restart the units. Recovery of replacement power costs will be an issue in the uncertain Texas regulatory environment. Full recovery of large deferred costs associated with the STP also adds uncertainty and increases risk. No baseload capacity additions are planned until after the year 2000. However, additional peaking capacity may be needed in 1995; two gas turbines, providing about 160 mw of capacity, are planned. Reactivation of 440 mw of gas-fired capacity in 1996 and 1998 also is being considered. Houston Lighting & Power, the electric utility subsidiary of Houston Industries, provides electric service to approximately 3.7 million people in a 5,000 square mile area, including Houston. -0- 12/2/93 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co. 312-368-3161/ (HOU)
CO: Houston Lighting & Power Company ST: Texas IN: UTI SU: RTG
PS -- NY080 -- 9885 12/02/93 14:22 EST
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|Date:||Dec 2, 1993|
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