The 50th Annual Edison Electric Institute (EEI) financial conference was
a relatively subdued affair, primarily focusing on secular concerns
regarding renewables, climate change and their impact on the utility
business model, according to Fitch Ratings. These challenges contrast
with current constructive macroeconomic trends and a relatively
supportive U.S. regulatory compact.
The U.S. Environmental Protection Agency's (EPA's) clean power plan
(CPP), finalized August 2015, was a big topic at the convention and
Fitch's 27th Annual Global Power Breakfast held Nov. 9th. Industry
participants see opportunity and challenges across the supply chain
including transmission, distribution and generation. The grid, driven by
policy and economics, is widely expected include a significantly greater
proportion of intermittent and distributed resources at the expense of
coal-fired generation. These developments are likely to require
significant investment and meaningful change in the current utility
As discussed at Fitch's 2015 breakfast presentation, investor-owned
utilities (IOU) are working to formulate plans to meet CPP targets.
Fitch unveiled its initial methodology evaluating the magnitude of the
CPP impacts across state jurisdictions based on carbon intensity,
availability of renewables and state regulatory compacts, among other
Electric utilities continue to benefit from historically low interest
rates, subdued natural gas prices and a generally benign regulatory
environment. Fitch expects flat to modestly higher weather-normalized
kWh sales growth for the regulated utility segment, as DG along with
energy efficiency are likely to create significant headwinds for utility
Fitch expects the outlook for regulated utilities to be stable in 2016
and credit metrics consistent with current median ratings of 'BBB+' for
utility holding companies and 'A-' for operating utility subsidiaries.
The full 'EEI Wrap-Up Report' is available at 'www.fitchratings.com'
or by clicking on the link.
Additional information is available at 'www.fitchratings.com'.
EEI 2015 Wrap-Up: Clean Power and the Grid Evolving
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Copyright Business Wire 2015
Source: Business Wire
(November 17, 2015 - 12:54 PM EST)
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