Putting behind some negative results at times over the past two years, Bellevue, WA-based Puget Sound Energy (PSE) had its relatively high investment-grade credit rating affirmed by Standard & Poor’s Ratings Services at year-end Friday, sticking with a “BBB-” corporate rating for the PSE utility and its parent, Puget Energy. The outlook, S&P said, is stable for the combination utility serving the northwestern parts of the state of Washington.
S&P said it would consider raising the outlook to “positive” with more favorable rate relief from Washington state regulators and improved commodity cost recovery mechanisms.
“The ratings reflect the strong business profile of PSE, a regulated, vertically integrated electric and gas utility, and the consolidated financial risk profile of the parent company, Puget Energy,” said S&P, noting that as of Sept. 30, 2005, Puget had about $2.3 billion in total debt.
S&P Credit Analyst Leo Carrillo said Puget’s equity, cash flow coverage and debt levels are now “within benchmark levels” for a triple-B rating since the company’s recent $310 million equity offering.
“While the company’s projections indicate improved metrics beyond 2006, the outlook remains stable, pending the outcome to the forthcoming 2006 [PSE utility] general rate case, possible improvements to the company’s power cost-adjustment mechanism beginning in Jan. 1, 2007, and regulatory treatment of major acquisitions, such as the 220 MW Wild Horse project now under construction,” Carrillo said.
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