...Positive Rating Outlook: The Positive Rating Outlook recognizes the uptrend in financial performance in recent years, Fitch Ratings' expectation for ongoing improvement in 2015 and the regulatory predictability provided by Illinois' formula rate plan (FRP). Strong Credit Metrics: Higher rates effective Jan. 1, 2014, and an FRP that allows for annual rate adjustments should allow Commonwealth Edison Co. (Comed) to sustain its currently sound financial position over the next few years. Fitch estimates debt/EBITDAR and FFO leverage will approximate 3.60x and 3.75x, respectively, and FFO fixed-charge coverage will be 5.0x over the next two years, which is strong within the current rating level. Regulatory Predictability: The FRP implemented in October 2011 provides increased regulatory predictability in Illinois. The FRP, which is filed annually, recognizes forward-looking capital additions and includes a true-up mechanism reducing, albeit not eliminating, rate lag. The FRP was enacted into...
