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DUFF & PHELPS: MATAGORDA COUNTY NAVIGATION DISTRICT NUMBER ONE $120.265 MILLION POLLUTION CONTROL REVENUE REFUNDING BONDS SERIES 1993 RATED 'A-'

 CHICAGO, July 21 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `A-' (Single-A-Minus) to Matagorda County Navigation District Number One's (Central Power and Light Company project) proposed offering of $120.265 million of pollution control revenue refunding bonds, series 1993. Proceeds will be loaned to Central Power & Light under an installment payment agreement and used to refund outstanding pollution control revenue bonds. The bonds are indirect obligations of Central Power and Light and payable solely from revenues under the payment agreement.
 Central Power and Light's financial fundamentals have improved and continued progress is expected now that the company's investment in the South Texas Project (STP) is fully reflected in rate base. With the major construction program now completed, projected expenditures are lower and should be completely financed by internal cash. The company has maintained a conservative capital structure.
 Operations at the two-unit 2,500 mw STP plant, of which Central Power and Light is a 25 percent owner, are a current concern. The plant has been down since February of 1993, due to equipment problems and a backlog of maintenance items. In June, the plant was added to the Nuclear Regulatory Commission's (NRC) "Watch List," as a Category II. The Category II designation deems that increased NRC attention is warranted, but allows for full plant operation. However, approval from the regional NRC office will be necessary to restart the units. Recovery of replacement power costs will be an issue in the uncertain Texas regulatory environment. Full recovery of large deferred costs associated with the STP also adds uncertainty and increases risk.
 Parent Central and South West's recent merger agreement with El Paso Electric Company is not expected to have a material impact on Central
Power and Light's credit quality. Central Power and Light Company is the largest of Central and South West Corporation's four electric utility subsidiaries. The company supplies electric service to approximately 566,000 customers in South Texas.
 -0- 7/21/93
 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/


CO: Matagorda County Navigation District Number One ST: Texas IN: UTI SU: RTG

LD -- NY095 -- 4142 07/21/93 16:37 EDT
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Publication:PR Newswire
Date:Jul 21, 1993
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