...Elevated Capex Program: Indiana Michigan Power Co. (IMPCO) is in the midst of an elevated investment plan to expand its rate base by about 6% annually in 2015¡2019. The company plans to invest $1.6 billion in 2017¡2019, including $346 million for the life extension of the Cook nuclear plant and $863 million in transmission and distribution assets. About 70% of Cook-related expenditures are attributable to Indiana and recoverable near contemporaneously through a rider mechanism. Resilient Credit Metrics: Fitch Ratings forecasts IMPCO's credit metrics will remain modestly weaker through 2018, with adjusted debt/EBITDAR hovering around 4.3x to 4.6x. Positive outcomes in upcoming rate cases are expected to improve metrics beyond 2018. With the extension of bonus depreciation, internally generated cash flows are expected to fund the majority of the planned capex over the rating horizon. Supportive Regulation: IMPCO's ratings reflect favorable regulatory constructs in Indiana and Michigan that...
