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METROPOLITAN EDISON 'A' SENIOR DEBT, 'A-' PREFERRED AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Aug. 11 /PRNewswire/ -- Metropolitan Edison Co.'s (MetEd) $491 million 'A' first mortgage bonds and $140 million 'A-' preferred stock are affirmed. The credit trend is stable. The company is a wholly owned subsidiary of General Public Utilities Corp. (GPU), a registered utility holding company.
 The ratings are based on supportive financials complemented by a healthy service territory, regionally low-cost operations, and good nuclear and coal plant performance. While the company expects capital outlays to increase significantly from the level of the previous five years, internal funds should provide over 70 percent of expenditures and debt leverage, excluding off balance sheet obligations, is expected to remain at about 45 percent of total capital. Pretax interest coverage should stay comfortably over three times.
 Significant and growing off balance sheet purchased power obligations are somewhat mitigated by the maintenance of strong equity ratios, constructive regulatory support, including recovery of capacity and energy costs through the fuel adjustment clause, take-and-pay provisions of the contracts, the reliability provided by the GPU system power supply, and the ability to purchase power on the Pennsylvania-New Jersey-Maryland interchange. Purchased power, which currently accounts for about 20 percent of MetEd's 1992 generation, is expected to increase to about 38 percent by 1997.
 In 1992 and the first quarter of 1993, performance of TMI-1, MetEd's sole operating nuclear power plant, was exceptional. The plant operated at capacity factors of 100.5 percent and 98.8 percent respectively, during these periods. MetEd owns 50 percent of the Three Mile Island nuclear power plant. The two other GPU subsidiaries, Pennsylvania Electric Co. and Jersey Central Power and Light Co. each own 25 percent. Unit 2, which was disabled in 1979 due to a nuclear accident, is being placed into permanent storage.
 Recovery of MetEd's sizeable non-accident related TMI-2 decommissioning costs was permitted in March 1993 following reconsideration by the PUC. Recovery of these costs allowed MetEd to reverse a pretax writeoff of about $112 million taken in 1992. The company's accident related portion of TMI decommissioning was expensed in 1991. The March rate order also authorized the company to increase electric rates by $14.0 million (11.25 percent return on average common equity). The company had requested a $68.0 million electric rate increase based upon a 13.0 percent return on average common equity. Management believes the rate increase was sufficient to keep it out of the rate arena for the next two years.
 -0- 8/11/93
 /CONTACT: Edward King of Fitch, 212-908-0574/
 (GPU)


CO: Metropolitan Edison Co. ST: Pennsylvania IN: UTI SU: RTG

WB -- NY103 -- 1884 08/11/93 17:27 EDT
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Publication:PR Newswire
Date:Aug 11, 1993
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