Printer Friendly

MICHIGAN COMMISSION DECISION A SETBACK FOR CONSUMERS POWER, FITCH SAYS -- FITCH FINANCIAL WIRE --

 MICHIGAN COMMISSION DECISION A SETBACK
 FOR CONSUMERS POWER, FITCH SAYS -- FITCH FINANCIAL WIRE --
 NEW YORK, April 3 /PRNewswire/ -- The Michigan Public Service Commission's decision to deny approval of an agreement between Consumers Power Co., the commission staff, and a major intervenor is a setback for the utility, Fitch says.
 Consumers Power's senior debt is rated 'BBB+' while its debentures and preferred stock are rated 'BBB'. In light of yesterday's decision, the credit trend is changed to uncertain from improving.
 The agreement reached last month included the utility, the commission staff, and the Association of Businesses Advocating Tariff Equity (ABATE), but excluded the Attorney General and 21 other intervenors. It would have ended litigation in 21 outstanding commission and court cases and had the potential to establish a more cooperative regulatory environment.
 If adopted in substance, the agreement would have allowed Consumers to recover from its customers payments for power purchases of 1,053 megawatts from the Midland Cogeneration Venture (MCV), at a 3.77 cents per Kwh rate, based on plant availability rather than energy delivered. Consumers is contractually obligated to purchase up to 1,240 megawatts starting in 1995 from MCV based on availability regardless of how much the commission allows to be recovered through rates. The agreement also included a shortened 10 year backload period of the power purchase agreement with MCV that would eliminate a potential $100 million reduction of 1992 net income. The denial throws the amount and timing of recovery of all related issues into doubt.
 In denying approval, the commission said that many of the issues raised by the participants must be resolved with finality. In its rate order, the commission left open the possibility that some issues could be resolved by future rate cases, litigation, or through a new agreement "that encompasses portions of the joint stipulation that are reasonable and in the public interest." The commission added that it denied approval because it was "faced with an integrated agreement that may not be resolved or altered in any way." The company's announcement today that it intends to continue to work with the parties and the commission to resolve the major issues that may result in an acceptable settlement is encouraging.
 In January, the Michigan Supreme Court refused to review a Court of Appeals decision that rejected the commission's authority to allocate MCV capacity. Due to the Supreme Court action, which remanded the case back to the commission, the company could still request expedited consideration of the MCV capacity issue. If negotiations are not successful, the company could also file a new electric rate case that would reflect its improved capital structure, higher rate base, and projected higher operating and maintenance expenses.
 -0- 4/3/92
 /CONTACT: Stephen Fedun of Fitch, 212-908-0568/ CO: Consumers Power ST: Michigan IN: UTI SU: RTG


SB -- NY054 -- 4913 04/03/92 14:57 EST
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 3, 1992
Words:477
Previous Article:USS-POSCO RECEIVES PERMIT TO OPERATE
Next Article:HISPANIC GROUP HONORS IBM FOR PROVIDING JOB TRAINING WHEN IT'S NEEDED MOST -- NOW


Related Articles
MIDLAND FUNDING CORP. II $367 MILLION SUBORDINATED DEBT RATED
MICHIGAN REGULATORY AGREEMENT HELPS CONSUMERS POWER, FITCH SAYS -- FITCH FINANCIAL WIRE --
CONSUMERS POWER, MIDLAND COGENERATION ON FITCHALERT NEGATIVE -- FITCH FINANCIAL WIRE --
CMS ENERGY DEBT FILING RATED 'BB+/BB-' BY FITCH -- FITCH FINANCIAL WIRE --
CMS ENERGY $440 MILLION SENIOR NOTES RATED 'BB+' BY FITCH -- FITCH FINANCIAL WIRE --
CONSUMERS POWER $300 MILLION SENIOR DEBT SHELF RATED 'BBB+' BY FITCH -- FITCH FINANCIAL WIRE --
NEW FITCH GLOBAL POWER GROUP TO COVER CORPORATE, MUNI UTILITIES -- FITCH FINANCIAL WIRE --
NEW FITCH GLOBAL POWER GUIDELINES FOCUS ON ELECTRIC UTILITY CHANGE -- FITCH FINANCIAL WIRE --
CMS ENERGY DEBT REVISED TO 'BB' BY FITCH -- FITCH FINANCIAL WIRE --
GOVERNOR'S DEREG PLAN WON'T HURT MICHIGAN ELECTRICS, FITCH SAYS -- FITCH FINANCIAL WIRE --

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters