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PENNSYLVANIA POWER & LIGHT $85 MILLION 6.75 PERCENT PREFERRED STOCK 'A-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 29 /PRNewswire/ -- Pennsylvania Power & Light Co.'s (PP&L) $85 million 6.75 percent perpetual preferred stock issue is rated `A-' by Fitch. The credit trend is stable.
 Due to strong cash flow, moderate capital requirements, and aggressive refinancing of high-cost securities, bondholder protection measures have improved steadily since 1985 and are solidly in the `A' range. Earnings have also benefited from the sale of capacity credits and trans?ion entitlements to other members of the PJM power pool as well as agreements with other utilities for the reservation of output from certain generating units. About $33 million of revenue is expected from these transactions in 1993.
 Fitch anticipates credit quality measures to be relatively stable over the next several years. The ability to control costs, however, will be critical in meeting the company's corporate goal of not raising rates before 1995. Other challenges include retaining the revenue from capacity and transmission agreements and recovering SFAS 106 costs. The Pennsylvania Office of Consumer Advocate contends that revenue from the sale of capacity and transmission-related transactions should be passed on to ratepayers.
 Capital requirements over the next several years are rising, partially due to Clean Air Act related expenditures, but remain manageable since PP&L has no need for additional generating capacity. Cash flow is estimated to provide about 80 percent of expenditures over the next three years compared to an average of well over 100 percent the past three years. Moderate sales growth, cost-control measures, including a reduction in employees through attrition, and additional refinancings are expected to keep earnings protection measures and capital ratios relatively constant.
 Pennsylvania Power & Light Co. provides electric service to 1.2 million customers in central eastern Pennsylvania. Its headquarters are in Allentown, Pa.
 -0- 9/29/93
 /CONTACT: Robert Hornick of Fitch, 212-908-0564/
 (PPL)


CO: Pennsylvania Power & Light Co. ST: Pennsylvania IN: UTI SU: RTG

CK -- NY059 -- 6894 09/29/93 14:32 EDT
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Publication:PR Newswire
Date:Sep 29, 1993
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