DUFF & PHELPS: THE WASHINGTON WATER POWER COMPANY $250 MILLION FIRST MORTGAGE BONDS RATED 'A'
CHICAGO, Jan. 10 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `A' (Single-A) to The Washington Water Power Company's (WWP) $250 million shelf registration of first mortgage bonds. Proceeds will be used for construction, retirement of debt, and for other corporate purposes. WWP is a low-cost electric producer, largely a result of economical hydroelectric resources. However, the lack of a purchased power and fuel adjustment clause in Washington makes WWP subject to variable hydro and volatile purchased power conditions. WWP is also one of nations' lowest cost distributors of natural gas. Strong growth in WWP's gas business should continue as the company emphasizes conversion from electric space and water heating to natural gas through its demand side management programs. WWP is strategically located to obtain economic supplies of natural gas both in the U.S. and Canada. The stable service territory economy and positive growth in electric customers add strength to the company's underlying credit fundamentals. Other positives include a significant improvement in earnings quality and growth in wholesale electric sales which have enhanced financial performance. With its low rates, location, and growth potential, WWP is well-positioned for an increasingly competitive environment. Hydro unit upgrades, demand side management programs, and extension of purchased power contracts will be used to meet electric demand growth for at least the next decade. Capital expenditures will increase, with some external financing required. However, Duff & Phelps Credit Rating Co. expects new equity to stabilize the capital structure. WWP is primarily a combination electric and natural gas utility serving a 26,000 square mile area known as the Inland Northwest in eastern Washington state and northern Idaho with a population in excess of 700,000. Also, WP Natural Gas, an operating division, provides natural gas service in central and southwest Oregon and the South Lake Tahoe region in California. WWP's principal non-utility subsidiary, Pentzer Corporation, has diversified investments in real estate, energy services, financial services, manufacturing, telecommunications and electronic data gathering equipment for the utility industry. Operations are profitable. -0- 1/10/94 /CONTACT: William A. Abrams, CFA of Duff & Phelps Credit Rating Co., 312-368-3112/ (WWP)
CO: Washington Water Power Company ST: Washington IN: UTI SU: RTG
CK -- NY091 -- 0707 01/10/94 16:31 EST
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|Date:||Jan 10, 1994|
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