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NORTHERN STATES POWER $350 MILLION SHELF DEBT RATED 'AA' BY FITCH --FITCH FINANCIAL WIRE (FFW)--

 NORTHERN STATES POWER $350 MILLION SHELF DEBT RATED 'AA' BY FITCH
 --FITCH FINANCIAL WIRE (FFW)--
 NEW YORK, June 30 /PRNewswire/ -- Northern States Power Co.'s (Minnesota) new $350 million first mortgage bond shelf registration is rated 'AA' by Fitch. Outstanding first mortgage bonds are affirmed at 'AA'. The company's outstanding secured pollution control bonds are assigned a rating of 'AA'. Unsecured pollution control revenue bonds and preferred stock are rated 'AA-'and commercial paper is rated 'F-1+'. There was $110.9 million in commercial paper outstanding at May 31. The credit trend is stable.
 Northern States' ratings reflect qualitative strengths such as low cost operations, a healthy service territory, good nuclear and coal plant performance, minimal acid rain exposure, and management's commitment to maintain a strong balance sheet despite construction financing stress. The company estimates that capital expenditures, primarily for transmission upgrades, the addition of two peaking units in 1994 and 1996, nuclear fuel, and replacements and improvements for its electric and gas system, will increase to an average of $460 million annually or 11 percent of net plant over the next five years and require regular rate support. Northern States has planned for new electric and gas rates to be effective in all jurisdictions by Jan. 1, 1993.
 Given the timing of rate relief and increased construction pressures, coverage ratios should fall to about 3.7 times (x) this year from 3.93x in 1991 before staging a recovery in 1993. Pretax interest coverage is expected to return to 4.0x within a few years. Internally generated funds will provide approximately 60 percent of construction expenditures this year (down from 90.3 percent in 1991), and assuming continuing constructive rate relief should average about 75 percent over the 1993 to 1996 period. Despite some external financing pressure, common equity sales and earnings retention should keep debt leverage in the 40-45 percent range over the next five years.
 Management has met near-term needs for new generating capacity by signing two long-term take-or-pay purchase power agreements for up to 650 megawatts (mw) of additional capacity. This off-balance sheet obligation is mitigated by the favorable cost of the purchases.
 In the future, a larger share of Northern States' earnings is likely to come from non-regulated activities, primarily from NRG Energy, Inc., Northern States' independent power subsidiary. While these operations increase risk, management's conservative approach, construction experience, and operating history, as well as the company's use of non- recourse financing, limit downside risk.
 -0- 6/30/92
 /CONTACT: Ed King of Fitch, 212-908-0574/
 (NSP) CO: Northern States Power Co. ST: Minnesota IN: UTI SU: RTG


TQ -- NY077 -- 5259 06/30/92 14:49 EDT
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Date:Jun 30, 1992
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