Research Update: DPL Inc. Outlook Revised To Stable From Negative On Favorable Regulatory Order, Ratings Affirmed

The Public Utilities Commission of Ohio (PUCO) recently approved DPL Inc. subsidiary Dayton Power&Light Co.'s (d/b/a AES Ohio) Electric Security Plan (ESP) settlement. We view this as supportive of the company's credit quality because it will enable it to recover, and earn a return on, much of its distribution capital investments over the next three years while implementing its recently approved $75 million base-rate increase. Furthermore, we now expect AES Corp. will infuse more equity into the company given the approval of its ESP. Therefore, we revised our outlooks on DPL and AES Ohio to stable from negative and affirmed all of our ratings. The stable outlook reflects our expectation that DPL will manage its regulatory risk in

...- The Public Utilities Commission of Ohio (PUCO) recently approved DPL Inc. subsidiary Dayton Power & Light Co.'s (d/b/a AES Ohio) Electric Security Plan (ESP) settlement. - We view this as supportive of the company's credit quality because it will enable it to recover, and earn a return on, much of its distribution capital investments over the next three years while implementing its recently approved $75 million base-rate increase. Furthermore, we now expect AES Corp. will infuse more equity into the company given the approval of its ESP. - Therefore, we revised our outlooks on DPL and AES Ohio to stable from negative and affirmed all of our ratings. - The stable outlook reflects our expectation that DPL will manage its regulatory risk in a manner more consistent with that of its peers in Ohio, refinance or paydown its upcoming 2025 debt maturity, and maintain funds from operations (FFO) to debt of consistently between 5% and 7% while receiving ongoing support from its parent AES....

Research Update