... believes that the regulatory environment in Oklahoma remains supportive despite the below-expectation revenue-neutral settlement to Public Service Co. of Oklahoma's (PSO) general rate case (GRC) in April 2015. PSO filed a new GRC with the Oklahoma Corporation Commission (OCC) in July 2015 seeking an $89 million base rate increase, as well as recovery of $83 million through environmental compliance and fuel cost riders. Fitch's base case scenario assumes approval of a rate increase of $75 million. Pressure on Credit Metrics: PSO's capex program is expected to be higher than average in 2016 due to the replacement of aging power plants, environmental upgrades and installation of automated metering infrastructure (AMI). Fitch expects this will pressure the company's credit metrics in 2016, but it will be followed by gradual deleveraging with adjusted debt/EBITDAR returning closer to 4.1x by 2018. Favorable Operating Environment: The ratings...
