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Australian Energy Regulator's Proposed Rule Changes Could Raise Credit Risks Oct 11
Standard & Poors, Oct 2011
Abstract
MELBOURNE (Standard & Poor's) Oct. 7, 2011-Standard & Poor's Ratings Services today said that the Australian Energy Regulator's (AER) proposed rule changes could increase regulatory uncertainty and heighten adverse credit transition risks for the country's energy network companies. The rule changes are regarding capital-expenditure determinations for electricity networks and the methodology for determining returns for both electricity and gas networks. The potentially higher regulatory risks, in our view, could make it more challenging for the network sector to attract capital on favorable terms, making it tougher for companies to maintain their financial profiles. This is especially so because of the sector's current and future large capital-expenditure requirement to replace aging network assets, cater for new customer growth, and improve system...
Companies mentioned in this report are: United Energy Distribution Pty Ltd.,Powercor Australia LLC,The CitiPower Trust,Envestra Ltd.,Energy Partnership (Gas) Pty Ltd.,ETSA Utilities Finance Pty Ltd.,SPI Australia Finance Pty Ltd.,Ergon Energy Corp. Ltd.,ElectraNet Pty Ltd.,DUET Group,SP AusNet Group,APT Pipelines Ltd.
Action: General Comment
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research type: News
This product is a is a brief one-page announcement of no more than 500 words with a quote from the analyst. It is media and investor focused with no accompanying commentary article.
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