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TEXAS UTILITIES ELECTRIC $175 MILLION OF CUMULATIVE PREFERRED STOCK RATED 'BBB-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Oct. 8 /PRNewswire/ -- Texas Utilities Electric Co.'s (TUEC) new issue of $175 million of 7.22 percent cumulative preferred stock, non-callable for eight years, is rated `BBB-' by Fitch. The preferred stock is a takedown from a previously rated shelf registration. The credit trend is stable.
 Proceeds are expected to be used for the redemption of all outstanding shares of several different series of preferred stock and may also be used for other corporate purposes. The rating reflects Fitch's expectation that key financial measurements will improve significantly once the Comanche Peak nuclear plant is substantially reflected in base rates.
 In January, the company filed a $760 million, or 15.3 percent, rate increase based on a 12.5 percent rate of return on common equity (ROE). The increase reflects, among other items, recovery of the remaining investments associated with both Comanche Peak nuclear units. The company placed the requested increase into effect under bond and subject to refund at the beginning of August. Unit 1 began commercial operation in 1990; unit 2 commenced full commercial operation on Aug. 3. On Aug. 27, the staff of the Public Utility Commission (PUC) filed revised testimony recommending an annual increase of 8.5 percent or $425 million based on a 11.5 percent ROE. The recommendation excludes about $119 million for school district property taxes which if adopted would be inconsistent with previous regulatory treatment. A final PUC decision is possible by the end of 1993.
 On July 12, the company announced a stipulated settlement agreement with the Office of Public Utility Counsel, the General Counsel of the PUC, and the Executive Committee of the Coalition of Cities served by the company which if approved by the PUC, would settle all Comanche Peak prudence issues through commercial operation of unit 2 and would allow the recovery of about $4.6 billion of fuel costs incurred for three years prior to June 30, 1992.
 The settlement would result in a disallowance of $250 million of Comanche Peak capital expenditures plus $83 million of associated allowance for funds used during construction and a $5 million fuel refund. Additionally, the company would be permitted to recover $197 million of expenses incurred with respect to its cost reduction program to be amortized over eight years. A final separate decision by the PUC on the proposed settlement part of the pending rate case is possible by the end of October.
 -0- 10/8/93
 /CONTACT: Stephen Fedun of Fitch, 212-908-0568/
 (TXU)


CO: Texas Utilities Electric Co. ST: Texas IN: UTI SU: RTG

CK -- NY065 -- 0339 10/08/93 17:16 EDT
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Publication:PR Newswire
Date:Oct 8, 1993
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