Ratings

The transmission and generation parts of vertically integrated rural electric cooperatives are enjoying strong credit ratings in the midst of the more turbulent private-sector electricity industry with its political and financial crunch. And proposed farm legislation in Congress eventually could strengthen the rural utilities’ financial positions as they enter somewhat of a generation building boom era, according to Standard & Poor’s latest analysis out of its energy finance team in New York.

As an outgrowth of merchant power generation’s shrinking margins and spark spreads, Moody’s Investors Service last Wednesday changed the rating outlook from stable to negative on debt securities of PG&E Corp.’s National Energy Group (NEG). The move reflects “the growing reliance on less predictable cash flows coupled with the weak marketplace for merchant generation,” Moody’s said in announcing the change.

In the several documents filed with the U.S. Securities and Exchange Commission (SEC) on Tuesday, Enron Corp. spelled out specifically the terms of its $23 billion merger with Dynegy Corp., noting in one filing that until the merger closes as expected in the third quarter of 2002, “we will continue to deal with one another on a commercial level as competitors, just as we have done in the past,” including its operation of EnronOnline, the leading electronic trading platform in the world.