Report: Federal electric regulations costly to Lubbock - KCBD NewsChannel 11 Lubbock

Report: Federal electric regulations costly to Lubbock

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.

Copyright 2012 KCBD. All rights reserved.

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