US electric cooperatives' spending on T&D likely to rise: S&P

Washington (Platts)--21May2004

US electric cooperatives are poised to make significant capital investment in
their transmission and distribution networks over the next five years,
Standard & Poor's said in a new report. The study released Thursday said
demand is growing in the territories of many electric cooperatives after 10
years of only modest investment in T&D. Cooperatives are expected to make
wider use of private capital and public debt markets for system improvement
funding, said S&P credit analyst Anne Selting. "More widespread use of public
debt and private lending could require cooperatives to more tightly manage
their financial performance, which could include budgeting to achieve greater
margins to meet stronger credit metrics," Selting said. Public debt and
private lending use assumes amortizing long-term debt, and the extensive use
of alternate debt structures, which could lead to the establishment of
cooperative credit metrics that are closer to those used for corporate credit
analysis, she added. S&P, like Platts, is a unit of the McGraw-Hill Companies.

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