Research Update: DPL Inc. And Subsidiary Dayton Power&Light Outlooks Revised To Negative On Elevated Regulatory Risk, Ratings Affirmed

The Supreme Court of Ohio (SCO) has remanded portions of the distribution modernization rider (DMR) for utilities owned by First Energy Corp. (FE). This included the SCO ordering the Public Utilities Commission of Ohio (PUCO) to remove the DMR revenue from the affected utilities owned by FE. The FE court ruling increases uncertainty around Dayton Power and Light Co.'s (DP&L) use of the DMR, including the risk that the future DMR used by DP&L could be changed, reinterpreted, or delayed, all of which would heighten the company's regulatory risk. We are revising our outlook on DPL Inc. (DPL) and its rated subsidiary DP&L to negative from stable and are affirming our ratings on the companies. The negative outlook reflects the

...- The Supreme Court of Ohio (SCO) has remanded portions of the distribution modernization rider (DMR) for utilities owned by First Energy Corp. (FE). This included the SCO ordering the Public Utilities Commission of Ohio (PUCO) to remove the DMR revenue from the affected utilities owned by FE. - The FE court ruling increases uncertainty around Dayton Power and Light Co.'s (DP&L) use of the DMR, including the risk that the future DMR used by DP&L could be changed, reinterpreted, or delayed, all of which would heighten the company's regulatory risk. - We are revising our outlook on DPL Inc. (DPL) and its rated subsidiary DP&L to negative from stable and are affirming our ratings on the companies. - The negative outlook reflects the heightened regulatory risk for DPL concerning its future use of the DMR, which the company materially relies on to sustain its credit quality....

Research Update