Fitch to Lower PPS Credit Rating to Triple B
Paducah Power Systems interim general manager Mark Crisson told the Paducah city commission Tuesday night the credit rating company Fitch plans to announce a downgrade of PPS to triple B.
“Not the end of the world. It’s not a good development but it probably will impact the premium we have to pay for a surety bond,” Crisson said. So, we want to try to keep an eye on our credit rating and maintain that as strong as possible under the circumstances.”
Crisson says Moody’s and Standard and Poor’s are willing to wait to address credit ratings until PPS receives word on the surety bonds. He says an assets sale or transfer, which could include Prairie State, may be part of a long-term rate recovery plan.
Crisson also reported Prairie State operations have been up over the past three months, producing over ninety percent in November. A power plant that has been down due to a leak in a boiler tube went online recently.
Crisson told the commission the credit rating companies seem to be optimistic about Prairie State, adding they seemed more disturbed that PPS did not increase power rates.
“When our finances and our rate tariffs suggest we need to be raising rates and we don’t do that because we are trying to deal with concerns of our customers, the risk you run is you may get your credit downgraded,” Crisson said.
Crisson said the Triple B rating continues to be investment grade and allows implementation of the Rate Recovery Plan.
“The biggest issue I think, frankly, is the fact that the market power prices we are getting for our Prairie State output remain pretty depressed,” Crisson said. “If those rates we get for the power go up that would help a lot. As much or more than Prairie State operating at a high level.”