LUBBOCK, TX (KCBD) -
Southwestern Public Service Company, a division of Xcel Energy,
gets a less than stellar credit rating. According
to Fitch Ratings, it's nothing the company did wrong. Instead, the issue is the threat
of costly federal regulations in the energy industry.
Fitch rates the proposed sale of $100 million of SPS bonds as
an "A-" with a negative outlook. The money
will be used to refinance existing debt and make some capital
improvements.
Fitch said Thursday in a written statement, "The inclusion of
Texas in the final EPA Cross-State Air Pollution Rule (CSAPR) drives the
Negative Outlook." It is forecast that the
new regulations could cost the company $470 million. But, Fitch also says there is a "significant
degree of uncertainty" as to how much the federal regulations will cost SPS.
Fitch also warns that SPS's credit rating could get worse if
anything unexpected happens.
The less than perfect credit score means SPS will have to pay
higher interest rates. In turn that
affects Xcel customers in West Texas but it also affects customers of Lubbock
Power & Light – as LP&L buys wholesale power from Xcel.
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