DUFF & PHELPS: COMMONWEALTH EDISON COMPANY $250 MILLION FIRST MORTGAGE BONDS RATED 'BBB'
CHICAGO, July 19 /PRNewswire/ -- Duff & Phelps Credit Rating Co. announced today that it has assigned a rating of "BBB" (Triple-B) to Commonwealth Edison Company's (NYSE: CWE) two-part issuance of first mortgage bonds. The rating applies to $100 million 6-5/8 percent bonds due July 15, 2003 and $150 million 7-3/4 percent bonds due July 15, 2023. Proceeds will be used for construction, refunding of outstanding debt and preferred stock, nuclear fuel expenditures, contributions to nuclear decommissioning funding and other corporate purposes. Commonwealth Edison's stringent renewed cost control measures continue as an attempt to somewhat mitigate the adverse regulatory orders. Total operating and maintenance savings are estimated at $130 million annually. Additionally, the company expects to save $50 million in 1993 from refunding and retirement of debt. In January 1993, the Illinois Commerce Commission (ICC) issued an order that deemed nearly two of the company's three newest nuclear units as "non-used and useful." The order, if upheld, will result in rate reductions in excess of $330 million and require refunds of about $770 million. Commonwealth Edison has filed for a second rehearing of this issue. A final ruling is not expected until early 1994. A new rate case filing is expected soon and should result in additional "used and useful plant," as demand grows. Separately, Commonwealth Edison's coal purchase contracts are being scrutinized. The ICC staff has alleged that during the 1985 through 1988 period, customers were overcharged due to high-priced coal contracts, and has recommended refunds of $280 million. Rate reductions, refunds and write-offs from adverse regulatory/legal decisions could potentially deplete retained earnings. A recently enacted state law allows Commonwealth Edison to form nonregulated subsidiaries. Commonwealth Edison is now able to set up units in various businesses, most importantly power generation. The new law limits Commonwealth Edison's investment in these nonregulated subsidiaries to $170 million. However, this should give the company the pricing flexibility to retain large industrial customers. Commonwealth Edison's service territory has an area of 11,540 square miles with a population of about 8.2 million. The company provides electric service to approximately 70 percent of the population including the city of Chicago. -0- 7/20/93 /CONTACT: James J. Stork, CFA of Duff & Phelps Credit Rating Co., 312-368-3125/ (CWE)
CO: Commonwealth Edison Company ST: Illinois IN: UTI SU: RTG
TS-MG -- NY050 -- 6779 07/20/93 11:49 EDT
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|Date:||Jul 20, 1993|
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