NEW YORK - (Business Wire) On Friday, Nov. 6, 2009, Fitch Ratings issued a special report summarizing the major themes that emerged from the assembly of investor-owned electric utilities, power generators, and investors in the global power sector at the 44th Edison Electric Institute's Financial Conference on Nov 1 - 4, 2009. According to Fitch's report, the sense of doom that permeated last year's EEI's Financial Conference was notably absent at this year's event, but declining kilowatt hour sales and the uncertain economic outlook were front and center in the minds of industry executives and investors. Even more important though was planning for the future impacts of an evolving congressional energy bill, carbon controls, and growth in renewable energy resources.
'The timing of carbon legislation is uncertain. Passage in this legislative session seems problematic, and an election in November 2010 will limit the time to get such legislation completed in 2010,' said Phil Smyth, Senior Director at Fitch Ratings. 'Nonetheless, there appeared to be consensus among conference attendees that coming carbon restrictions will result in significantly higher costs. The inability of the utilities to fully recover future investment in emissions reductions with a reasonable return is a potential secular threat to the industry's creditworthiness.'
Headline grabbing events were rare at this year's conference. However, several industry themes emerged that Fitch considers worthy of note:
--Industry acceptance of greenhouse gas restrictions;
--A growing commitment to renewable generation;
--Alignment of industry infrastructure strategy with federal and state policy initiatives;
--The need for rate increases to recover rising unit costs;
--Sales declines appear to be slowing, and the turning point has already occurred in some regions or is likely to occur in 2010.
Fitch's Utilities, Power and Gas team hosted its 21st annual Global Power Breakfast at the EEI Financial Conference on Nov. 2, 2009. Slides from the presentation including a transcript of the speeches have been posted to Fitch's web site at 'www.fitchratings.com'.
The full report 'EEI 2009 Wrap-Up Report: The New Normal - Blocking, Tackling and Climate Change' as well as Fitch's presentation transcript '21st Annual Global Power Breakfast: The Outlook... 2010 and Beyond' are also available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
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Fitch Ratings, New York
Philip Smyth, CFA, 212-908-0531
Ellen Lapson, CFA, 212-908-0504
or
Media Relations:
Cindy Stoller, 212-908-0526
Email: cindy.stoller@fitchratings.com
