We believe that Public Service Co. of Colorado (PSCo) will face increasing wildfire risks because of climate change, pressuring the company?s business risk and credit quality. Accordingly, we lowered our issuer credit rating on PSCo to ?BBB+? from ?A-? with a negative outlook. The negative outlook on PSCo reflects the potential weakening in its credit quality from increasing wildfire risks and the significant legal risks it faces in the wake of the Marshall fire. The one-notch downgrade reflects PSCo?s increasing exposure to catastrophic wildfires in a state that is becoming more susceptible to wildfires due to climate change. During 2024, PSCo proactively deenergized its power lines twice; although we assess the use of public safety power shut-off (PSPS) events as
