Credit standing of electric utilities

Journal Article · Thu Mar 03 04:00:00 EST 1977 · Public Util. Fortn.; (United States)

OSTI ID:7224954

Hyman, L S; Grigoli, C J

Analysis of 73 representative utility company bond profiles is made to examine downward trends in bond ratings and ascertain the implications this has for future capital raising efforts. The downgrading by bond rating agencies began in 1971 as AAA and Aaa ratings were reduced to BBB and Baa at Moody's and Standard and Poor. Tables illustrate the parallel shift of pretax interest coverage. As inflation increased from 1965 on, the industry faced a reversal of the previously rising sales and operating revenues and the stable interest rates and plant costs. The result was a fall in return on equity and pretax interest coverage. As inflation increased, the cost of replacing facilities outpaced the devalued dollar and forced more external financing. Utilities, as regulated industries, suffered from rate decisions and accounting procedures that were insensitive to economic changes until some utilities were no longer able to sell bonds. A current stabilization is allowing utilities to begin selling bonds again, but this is partially offset by rising capital expenditures. (DCK)

• OSTI ID: 7224954
• Journal Information: Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 99:5; ISSN PUFNA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
296000* -- Energy Planning & Policy-- Electric Power
ACCOUNTING
CAPITAL
CHARGES
DATA
ECONOMIC IMPACT
ECONOMICS
ELECTRIC POWER
ENERGY POLICY
FINANCIAL DATA
FINANCING
GOVERNMENT POLICIES
INFORMATION
INVESTMENT
MANAGEMENT
MATHEMATICS
POWER
PUBLIC UTILITIES
REGULATIONS
STATISTICS