...Mountaineer Gas Company's (MGC) ratings reflect its small scale as a local gas distribution company (LDC) operating in a restrictive regulatory environment in West Virginia. The use of historical test years and the absence of a revenue decoupling mechanism or weather normalization continue to weigh on MGC's credit profile. MGCs Eastern Panhandle expansion project is the key driver of a relatively elevated capex over the forecast period. The infrastructure replacement and expansion program (IREP) rider partly alleviates regulatory lag, and is credit positive, in Fitch Ratings' view. We expect MGC's financial profile to remain in line with existing ratings over 2018¡2021, despite the large capex program....
