...Low-Risk Business Profile: The ratings on Indiana Michigan Power Co. (IMPCO) are supported by stable regulated earnings, a generally constructive regulatory environment, a diversified generation fleet, and close functional and financial ties to its parent. Supportive Regulation: IMPCO's ratings reflect favorable regulatory environments in Indiana and Michigan that provide recovery riders for environmental upgrades, fuel costs, energy- efficiency programs and other costs. The costs allocable to Indiana for the nuclear power plant life extension project are recoverable thought a rate rider, reducing regulatory lag, while the project has been preapproved in Michigan. Large Capex Program: A $1.5 billion capex plan over the next three years will pressure credit protection measures, in Fitch Ratings' opinion. The capex plan includes approximately $640 million for the life extension of the Cook nuclear plant. About 65% of Cook-related expenditures are attributable to Indiana and recoverable through...
