...Strong Credit Metrics: Ohio Power Co. (OPCO) plans $1.4 billion of capex through 2018, supporting a 6% compound annualized rate base growth. Supportive regulatory construct will minimize the impact of the capex plan on the balance sheet and Fitch Ratings expects OPCO's adjusted debt/EBITDAR ratio to remain around 3.25x through 2018, which is strong for the current ratings. Supportive Regulatory Construct: OPCO's electricity security plan (ESP), effective until May 2018, is a key supporting element of its credit profile. The main provisions of the ESP include a distribution investment rider (DIR), a deferred asset recovery rider, a 10.2% return on equity (ROE) and a debt/capital ratio of 52.5%. Inclusion of the DIR and a rider to recover storm expenses in the approved ESP reduces regulatory lag. Full revenue decoupling provides additional earnings stability. PPA with AEP Generation: On balance, Fitch believes the power purchase agreement (PPA) with AEP Generation Resources Inc. (AEP Generation)...
