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DETROIT EDISON $725 MILLION SHELF G&R BONDS RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, March 15 /PRNewswire/ -- Detroit Edison Co.'s (DTE) $725 million shelf registration is rated 'A-' for general and refunding mortgage bonds and secured medium term notes by Fitch. Proceeds from the sale will be used to replace or refund outstanding debt and preferred stock. The credit trend is improving.
 Financial protection measures have steadily improved since a December 1988 rate settlement order permitting a seven-year phase- in plan for recovery of approved Fermi 2 nuclear power plant costs. Also, the rate settlement through 1992 suspended the power supply cost recovery (PSCR) clause, established a five-year moratorium on base rate changes, and provided for an expense stabilization procedure allowing adjustments for inflation. Since the 1988 rate order, pretax interest coverage improved to 3.15 times(x) in 1992, from 2.01 times (x) in 1988. Total debt leverage declined to 57.6 percent from 67.6 percent over the same period.
 In July 1992, the company filed for a $82.5 million rate increase based on a 1994 test year and a 13 percent rate of return on common equity. The request was subsequently increased by $9.1 million to $91.6 million to reflect recovery of costs associated with an expanded demand side management program. On Feb. 17, 1993, the commission staff recommended a rate reduction of $14.9 million. Most of the recommended reduction in base rates reflect lower than requested O&M expenses and a lower common equity return on a reduced common equity component of the capital structure. A final commission decision is expected by the end of December 1993 for rates to become effective in January 1994. A settlement agreement reflecting the expiration of the expense stabilization procedure surcharge and the reinstatement of the PSCR clause reduced rates by $174 million in January 1993.
 Factors mitigating growing competitive rate concerns and the company's above average reliance on the automobile and steel industries include the January 1993 rate reduction of $174 million and internal cash generation well in excess of capital requirements over the next several years. Additional factors are the aggressive implementation of ongoing cost reduction programs, an improving economy in the company's service territory, and the continued superior operating performance of the Fermi 2 nuclear power plant. The 1.5 percent average annual increase in kwh sales over the next 15 years reflects the announced closing of several automobile plants.
 -0- 3/15/93
 /CONTACT: Stephen Fedun, 212-908-0568, of Fitch/
 (DTE)


CO: Detroit Edison Co. ST: Michigan IN: UTI SU: RTG

LR -- NY032 -- 5966 03/15/93 10:53 EST
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Publication:PR Newswire
Date:Mar 15, 1993
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