...Carbon Compliance Remains a Challenge: Fitch Ratings believes preserving financial margins and credit quality, while complying with the EPA's final Clean Power Plan (CPP), remains most challenging for public power and cooperative utilities operating in states subject to sizable mandated carbon-reduction goals, high carbon-reduction costs and a relatively high cost of electricity. Final Rules Shift Burden: Significant changes to the CPP's reduction goals and estimated carbon- reduction costs have shifted the relative challenge facing each state compared with the findings in Fitch's report The Carbon Effect (Assessing the Challenges for Public Power) published on Jan. 30, 2015. States facing the greatest challenge now include Kansas, Missouri, Nebraska, Tennessee and West Virginia based on the Fitch-calculated carbon cost recovery index (CCRI). Effect on Credit Quality: Although the final rules appear less onerous than originally proposed and provide more time to comply, Fitch believes the...
