Fitch Publishes U.S. Transmission and Distribution Handbook (Second Edition)

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has published the second edition of U.S. Transmission and Distribution Handbook providing detailed information for utility distribution companies (UDCs) in Fitch's coverage universe. The UDC sector comprises electric transmission and distribution (T&D) utilities as well as natural gas local distribution companies (LDCs). Each company section includes rating rationales and rating drivers along with debt structures and financial summary information.

The UDC sector has typically enjoyed strong investment-grade ratings, due in large measure to lower operational risks than those faced by integrated utilities, ongoing regulatory support for investments in T&D infrastructure and pipeline replacement and safety programs at the LDCs, and a rising proportion of investments regulated by the Federal Energy Regulatory Commission (FERC), which Fitch typically deems more supportive than state regimes.

However, the sector is not without challenges, including stagnant sales growth prospects, elevated capex that is expected to lead to pressure to raise customers' bills, and declining returns on equity (ROE). State-authorized median ROEs declined to 9.55% in 2015, compared to 9.7% in 2014, and a flurry of challenges to FERC-authorized ROEs is clouding earnings visibility of UDCs with significant FERC-regulated transmission assets. While Fitch believes these headwinds are manageable, a significantly higher-than-expected increase in natural gas prices, interest rates and the general level of inflation could lead to noticeable shifts in the credit profile of UDCs.

The report "U.S. Transmission and Distribution Utilities Handbook - A Detailed Review of Electric and Gas T&D Utilities (Second Edition)" is available on the Fitch web site at 'www.fitchratings.com' or by clicking on the link.

Additional information is available at www.fitchratings.com

U.S. Transmission and Distribution Utilities Handbook (A Detailed Review of Electric and Gas T&D Utilities ￢ﾀﾔ Second Edition)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=881026

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160506005463/en/

Fitch Ratings
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Source: Fitch Ratings

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