DUFF & PHELPS: APPALACHIAN POWER $175M FIRST MORTGAGE BONDS AND/OR FIRST MORTGAGE BONDS DESIGNATED SECURED MEDIUM-TERM NOTES (SHELF) RATED 'A'
CHICAGO, Sept. 21 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `A' (Single-A) to Appalachian Power Company's $175 million shelf registration for first mortgage bonds and/or first mortgage bonds designated secured medium-term notes. Separately, a rating of `A-' (Single-A-Minus) has been assigned to the company's $110 million shelf registration for cumulative preferred stock. Proceeds will be used to refund preferred stock, long-term debt, or to repay short-term obligations. External new money financing will be required to meet increased capital expenditures for generation, transmission, distribution, and general plant. Appalachian Power's debt protection measures are constrained as a result of poor regulatory treatment in West Virginia and increasing levels of capital spending. Appalachian Power's projected acid rain compliance costs for its generating units are manageable. However, the company will, through its purchases of power from the AEP power pool, share in the compliance costs for the AEP system. The company's application to increase rates $31 million in Virginia is pending. Interim rates went into effect in March, subject to refund. A final decision is expected in the first quarter of 1994. In July, the company filed its annual review of Expanded Net Energy Cost (ENEC) with the Public Service Commission of West Virginia (PSC). An increase in overall ENEC revenue was not requested, provided that ENEC mechanism continues in its present form. Should the PSC discontinue ENEC, Appalachian Power has requested that rates increase by $17.1 million, primarily to recover related deferred costs. Appalachian Power Company, AEP's second largest subsidiary, provides electric service in a 19,620 square mile area in the southwestern portion of Virginia and southern West Virginia. Approximately 40 percent of revenues are derived from Virginia and 36 percent from West Virginia. The remainder is wholesale and is regulated by the Federal Energy Regulatory Commission (FERC). -0- 9/21/93 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/
CO: Appalachian Power Company ST: West Virginia IN: UTI SU: RTG
TS -- NY084 -- 4322 09/21/93 16:11 EDT
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|Date:||Sep 21, 1993|
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