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DUFF & PHELPS DOWNGRADES CENTRAL MAINE POWER COMPANY

 CHICAGO, Oct. 27 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has lowered the fixed income ratings of Central Maine Power Company as follows: general and refunding mortgage bonds from `BBB+' (Triple-B-Plus) to `BBB-' (Triple-B-Minus); unsecured notes from `BBB' (Triple-B) to `BB+' (Double-B-Plus); and preferred stock from `BBB' (Triple-B) to `BB-' (Double-B-Minus). At the same time, the securities have been removed from Rating Watch -- Down, where they were placed in September. Approximately $650 million of securities are affected.
 The downgrade is reflective of Central Maine Power's limited flexibility and difficult competitive position. The company's credit protection measures are very significantly weakened by the burden of high-cost purchased power. Purchased power contracts that were viewed as moderately priced when initiated several years ago, are high priced in today's capacity-flooded power market in the Northeast. Additionally, Central Maine has considerable excess capacity.
 The Maine Public Utilities Commission (PUC) was particularly punitive in its recent review of two purchased power contracts. The uncertain outcome of expected further purchased power contract reviews by the PUC increases risk. The PUC has been slow to incorporate deferred purchased power and electric rate revenue adjustment mechanism (ERAM) costs into rates. The rate case now pending before the PUC offers an additional level of uncertainty concerning regulatory support for credit quality factors.
 Weakness in the Maine economy continues, with little expected near-term growth in demand. The company's high rates and relatively high proportion of large user customers aggravate its competitive situation. The right to supply a major wholesale customer's power requirements was recently lost to a competitor.
 Management is keenly aware of the competitive situation, and is instituting programs to reduce costs and capital expenditures. Efforts also are under way to retain sales volumes. Central Maine has successfully 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- 10/27/93
 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/


CO: Central Maine Power Company ST: Maine IN: UTI SU: RTG

PS -- NY055 -- 7249 10/27/93 11:41 EDT
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Publication:PR Newswire
Date:Oct 27, 1993
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