Jun 01 - Business Wire In Fitch's view, the passage of Senate Bill (SB) 179 by both houses of the Missouri legislature is a sign of an improving regulatory and legal climate for utilities in the state. The law will allow electric, gas and water utilities in the state to make more timely adjustments to their tariffs to recover certain prudently incurred fuel and purchased power costs. Fitch expects that the bill will be signed by Governor Matt Blunt in the summer of 2005. Once signed, the law will take effect in January 2006. Fitch also believes the law will reduce credit risk in the longer term for gas and electric utilities, but the effects of the bill will be slow to develop due to provisions that require a full general rate case for each company as a condition to an order by the Missouri Public Service Commission (MPSC) adopting a new tariff mechanism conforming to the bill.
One of the more immediate beneficiaries is likely to be Aquila Inc. (ILA), as it is in the process of filing a general rate case. While all Missouri-based utilities will benefit, over the longer term, Fitch anticipates that the law will also have positive credit implications for The Empire District Electric Company (EDE), AmerenUE, Laclede Gas Co. (Laclede), and Southern Union Co. (SUG). Fitch does not contemplate any immediate credit rating changes due to the passage of the law, but the new utility law and the related regulations that the MPSC must develop will likely be important factors influencing the Missouri utilities' future risk profiles and ratings.
For a more detailed commentary on the Missouri Utility Bill as well as a discussion of its impact on select market participants, please see the report dated June 1, 2005 entitled "New Missouri Bill Supports Utility Credit" on the Fitch Ratings web site at www.fitchratings.com.