...Low-Risk Business Profile: The ratings reflect Public Service Co. of Oklahoma's (PSO's) relatively predictable earnings and cash flows, very competitive retail rates, management's conservative strategy focused on integrated utility operations in Oklahoma, a constructive regulatory environment and a generation fleet generally compliant with environmental regulations. Rate Case Settlements: The Oklahoma Corporation Commission (OCC) adopted in April 2015 a revenue-neutral settlement to PSO's general rate case (GRC) filing. Concurrently, the OCC approved a rider to implement automated metering infrastructure (AMI). While the adjudication was slightly below our expectations, Fitch Ratings believes that the regulatory environment in Oklahoma remains supportive. In July 2015, PSO filed a GRC seeking a $172 million rate increase, mainly for environmental compliance costs. Pressure on Credit Metrics: PSO's capex program is higher than average in 2015¡2016 at about $350 million annually due to the...
