...Solid Credit Metrics: Appalachian Power Co.'s (APCO) earned ROE has increased by 200 bps to 9.4% since 2014 as the result of satisfactory outcomes to general rate cases (GRC) in West Virginia, effective rate adjustment mechanisms in Virginia and cost-reduction programs. Fitch Ratings expects earned ROE to improve slightly in 2017 as the effect of the GRC in West Virginia is realized on a full year basis and rate adjustments are implemented in Virginia. Fitch forecasts the improved financial performance to result in adjusted debt/EBITDAR remaining in the 3.5x¡3.7x range until 2019. Restrictive Regulatory Environment: Fitch considers the regulatory environment in West Virginia to be somewhat restrictive and the settlement to the expanded net energy cost (ENEC) proceedings adopted in July 2016 was below Fitch's expectations. The regulatory environment in Virginia is generally more constructive, with various riders compensating for the freezing of base retail rates until 2020. Increased Renewables...
