DUFF & PHELPS: CENTRAL MAINE POWER COMPANY $150 MILLION GENERAL AND REFUNDING MORTGAGE BONDS (SHELF) RATED 'BBB-'
CHICAGO, Jan. 3 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of `BBB-' (Triple-B-Minus) to Central Maine Power Company's shelf registration for $150 million of general and refunding mortgage bonds. Securities available for sale total $160 million. Proceeds will be used for debt repayment, security refundings, construction financing, and other general corporate purposes. Central Maine Power has limited flexibility and a difficult competitive position. The company's credit protection measures are significantly weakened by the burden of high-cost purchased power, continuance of the weak Maine economy, and considerable excess capacity in a capacity-flooded region. Central Maine's high rates and relatively high proportion of large user customers further aggravate its competitive situation. In November, the Maine Public Utilities Commission (MPUC) authorized a $26 million or 3 percent rate increase, 31 percent of the company's $83 million request. The rate increase differential resulted from a lower allowed return on equity (10.05 versus 12 percent requested), a lower equity ratio, and a $25.3 million efficiency penalty. The efficiency penalty came in response to a management audit requested by the MPUC which identified areas where operating and maintenance costs could be reduced. Included in the lower return on equity was a 50 basis point purchased power prudency penalty; the MPUC indicated that it will review further purchased power contracts for prudency. Cognizant of the company's competitive situation, management is implementing programs to reduce costs and capital expenditures. This month the board approved a 42 percent common dividend cut. Workforce reductions and the possibility of closing of certain facilities were also announced. Central Maine has bought out some purchased power arrangements on favorable terms; such efforts continue. Central Maine Power serves 497,000 customers in an 11,000 square mile area that includes 75 percent of Maine's population. -0- 1/3/94 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/ (CTP)
CO: Central Maine Power Company ST: Maine IN: UTI SU: RTG
LD -- NY059 -- 8634 01/03/94 16:52 EST
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|Date:||Jan 3, 1994|
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