...Small Scale of Operations: The ratings of Mountaineer Gas Company (MGC) are restricted by the utility's small scale of operations. MGC is one of the smallest investor-owned natural gas distribution utilities rated by Fitch Ratings. Due to MGC's modest size, small changes in revenue or expenses can have an outsized impact on credit metrics. Private Equity Ownership: MGC's ratings are also restricted by the utility's private equity ownership. MGC's holding company, Mountaineer Gas Holdings Limited Partnership (MGH), is owned by private equity funds ultimately owned by iCON Infrastructure LLP, Deutsche Bank AG, and IGS Utilities LLC (IGS LLC). Fitch believes private equity ownership presents an increased level of credit risk due to the typically more aggressive dividend payout policy, weaker financial flexibility, and less transparent corporate governance compared with a publicly traded company. Challenging Regulatory Environment: Fitch regards West Virginia's regulatory environment as challenging....
