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SALT RIVER PROJECT ELECTRIC REVENUE BONDS RATED 'AA' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Oct. 5 /PRNewswire/ -- Salt River Project Agricultural Improvement and Power District (SRP), Arizona's $600 million electric system refunding revenue bonds, 1993 series C are rated 'AA' by Fitch. The district's $3.3 billion outstanding electric system revenue bonds are also rated 'AA'. The district's $375 million 'F-1+' commercial paper program is affirmed. The credit trend is stable. The bonds are scheduled to sell through negotiation the week of Oct. 11 by a Bear, Stearns & Co. Inc. led syndicate.
 SRP's rating reflects its strong financial position, competitive electric rates, and diverse generating resources. The service area is stable with continued growth expected. The district has consistently achieved debt service coverage approximating 2.00x and should continue to produce high levels, in-line with its financial goals. Electric rates are competitive with the investor owned utilities in the state, and only moderate increases are forecast. SRP's focus on solidifying its position as a low cost supplier of energy is key in the increasingly competitive utility environment in which it operates. A well-balanced power supply program and a flexible long-range resource option plan ensures that SRP will not be required to build additional capacity until after 2010. The depth and experience of SRP management is a positive.
 Credit concerns are moderate and include environmental issues associated with certain coal-fired units and recent outages at the Palo Verde Nuclear Generating Station (PVNGS). Pursuant to an agreement with the U.S. Environmental Protection Agency, scrubbers will be installed at the Navajo project, beginning in 1995 and completed by 1999. In addition, studies currently under way may result in the need to install pollution control equipment at other coal-fired units in which SRP participates. Estimated costs for these projects have been included in the district's six year $1.86 billion capital program. The recent extended outage at PVNGS unit 2 to replace steam generator tubes and the need to inspect units 1 and 3 for similar problems adds an element of risk since the project accounts for about 20 percent of net production.
 -0- 10/5/93
 /CONTACT: Susan M. Courtney, 212-908-0503, or Alan Spen, 212-908-0594, both of Fitch/


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SM -- NY062 -- 8946 10/05/93 14:36 EDT
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Publication:PR Newswire
Date:Oct 5, 1993
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