DUFF & PHELPS: VIRGINIA ELECTRIC & POWER $400M FIRST AND REFUNDING MTGE. BONDS (SHELF) RATED 'A+'; $100M PREF. STOCK (SHELF) RATED 'A'
CHICAGO, May 5 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of "A+" (Single-A-Plus) to Virginia Electric & Power Company's shelf registration for $400 million first and refunding mortgage bonds. A rating of "A" (Single-A) has been assigned to the company's $100 million preferred stock shelf registration. Proceeds will be used to redeem outstanding mortgage bonds and preferred stock and for capital requirements. Virginia Electric & Power Company has strong underlying fundamentals. The service area is relatively healthy, and regulation has generally been supportive. Plant operations have been efficient and cost controls have been effective at holding rates down. Construction requirements are manageable. Continued financial stability is expected as a result of increased equity, rate increases, sales growth, and lower borrowing costs. Debt protection measures are weakened by the company's large purchased power obligations. The company's ability to fully collect deferred purchased power capacity payments is a concern. In December 1992, the Virginia State Corporation Commission authorized a $45 million rate increase with a 12.25 percent allowed return on equity, in response to the company's expedited 1991 filing. Virginia Electric & Power will refund the difference between the $184 million placed in rates on an interim basis and the $45 million authorized. A decision is expected by mid-1993 in the company's general rate filing for a $413.5 million increase in rates. The case will address Virginia Electric & Power's growing deferred capacity costs. Virginia Electric & Power Company, a wholly owned subsidiary of Dominion Resources, Inc., is Virginia's largest electric utility. It serves 1.7 million customers in a 30,000-square-mile area in Virginia and northeastern North Carolina. -0- 5/5/93 /CONTACT: John C. Dell of Duff & Phelps, 312-368-3161/ (D)
CO: Virginia Electric & Power Company ST: Virginia IN: UTI SU: RTG
GK -- NY068 -- 4928 05/05/93 14:06 EDT
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|Date:||May 5, 1993|
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