Fitch Assigns 'AA-' Rating to Florida Power & Light $300MM FMBs.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 -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has assigned an 'AA-' rating to Florida Power & Light Company's (FP&L) new $300 million issue of first mortgage bonds, 6.20% series due June 1, 2036. Proceeds will be used to repay short-term borrowings and for other corporate purposes. The Rating Outlook is Stable. FP&L's ratings reflect its strong financial profile, growing customer base, and historically constructive regulatory environment. The ratings also consider the utility's significant off balance sheet purchased power obligations as well has the company's large exposure to natural gas prices. However, Fitch views these issues as relatively low risk due to the high probability of cost recovery through regulated tariffs. In addition, FP&L's moderate leverage and substantial equity component mitigate the financial exposure and credit impact of these obligations. The company is currently before the Florida Public Service Commission Florida Public Service Commission (FPSC) is an independent regulatory agency serving the public of Florida by managing its public utilities such as telecommunications, electricity, natural gas, water, and wastewater. (FPSC FPSC Florida Public Service Commission FPSC Financial Planners Standards Council (Canada) FPSC Field Programmable System Chip (Lucent Technologies) FPSC Fundación Promoción Social de la Cultura ) seeking an order to recover 2005 storm damage costs and pre-fund its storm damage reserve fund. Pursuant to the company's most recent rate agreement, the company was authorized to recover all prudently incurred storm damage costs either through a surcharge An overcharge or additional cost. A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. or securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. . The company has been collecting $890 million of such costs incurred during the 2004 hurricane season Hurricane season refers to a period in a year when hurricanes usually form. For more information see: Tropical cyclone#Times of formation. For a lists of past seasons, see:
The current proceeding proposes to combine the remaining balance of 2004 costs (estimated to be approximately $213 million by the end of July 2006) with approximately $827 million in 2005 storm costs. In addition, the company is seeking to pre-fund $650 million into its storm damage reserve fund. The company has proposed two options for the recovery of these storm costs: recovery of remaining 2004 costs as well as the 2005 costs through a twelve year securitization. Alternatively, recovery of the 2004 storm costs through the existing surcharge with a new three year surcharge to recover 2005 storm costs and storm reserve fund pre-funding. In the past, the regulatory environment in Florida has been among the most constructive regimes in the U.S. and has been a source of credit strength for the company. Fitch expects that this constructive environment will continue. However, it should be noted that two of the FPSC's five commissioners, joined the FPSC in January of 2006. Should a less constructive tone emerge in the current or future FPSC proceedings, this would be a source of credit concern. FP&L is an integrated electric utility serving 4.3 million predominantly residential and commercial customers along the eastern and lower western coasts of Florida. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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