DUFF & PHELPS: CONNECTICUT LIGHT AND POWER COMPANY $125 MILLION FIRST AND REFUNDING MORTGAGE BONDS, RATED 'A-'
CHICAGO, Dec. 8 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `A-' (Single-A-Minus) to Connecticut Light and Power Company's $125 million issuance of Series ZZ 7-3/8 percent first and refunding mortgage bonds, due Dec. 1, 2025. Proceeds will be used to redeem outstanding securities. Connecticut Light and Power will benefit from cost controls, strong internal cash, and its three-year rate agreement reached earlier this year. However, with increasingly competitive market conditions, relatively high rates, and excess capacity in a power-long region, maintenance of financial fundamentals will be a challenge. In June, the Connecticut Department of Public Utility Control (DPUC) authorized a $141.3 million three-year rate increase: $46 million (2 percent) in 1993, $47.1 million (2 percent) in 1994, and $48.2 million (2.1 percent) in 1995, with authorized returns on equity (ROE) of 11.5, 11.6, and 11.7 percent, respectively. The plan provides for the additional components of the Seabrook 1 and Millstone 3 phase-in plans to be included in rates. The plan also provides for recovery over three years of the company's $155 million investment in replacement steam generators at the Millstone 2 nuclear unit. The DPUC order denied recovery of about $42 million of replacement power costs attributable to a nuclear capacity factor below 55 percent during 1991-92. Conservation and load management programs, power purchases, and lower expected sales growth should delay the need for major new generating capacity until after the year 2000. A prolonged slowdown in the regional economy and defense spending curtailments will slow financial improvement. Connecticut Light & Power is a wholly owned subsidiary of Northeast Utilities. The company is the largest electric utility in Connecticut and provides electric service to most of the state. -0- 12/8/93 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/ (NU)
CO: Connecticut Light and Power Company ST: Connecticut IN: UTI SU: RTG
CK -- NY105 -- 1955 12/08/93 17:26 EST