The New York Public Service Commission (PSC) has proposed accelerated restructuring of the electric industry in Phase II of its "competitive opportunities" proceeding (Case No. 94-E-0952). The proposal calls for wholesale competition by 1997, retail competition by 1998, separating generation from transmission and distribution, and forcing utilities to absorb a portion of their stranded investment.
Moody's Investors Service believes the proposal has generally negative credit implications for New York's investor-owned utilities. Moody's has revised its ratings outlooks from stable to negative for New York State Electric & Gas and Rochester Gas & Electric. Consolidated Edison maintains its current negative rating outlook. Long Island Lighting Co. and Niagara Mohawk are being reviewed for possible downgrade. Central Hudson Gas & Electric Corp. and Orange & Rockland Utilities, Inc. maintain stable ratings. Standard & Poor's will not place their ratings on CreditWatch because the final PSC decision may be modified substantially, or the retail wheeling timetable extended.
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