Wisconsin Public Service Corp.

The stable rating outlook over the next two years on WPS reflects that on ultimate parent WEC Energy Group Inc. (WEC), with our expectation that management will continue to focus on its core utility operations and reach constructive regulatory outcomes to avoid heightened business risk. The outlook also reflects our base-case forecast of adjusted funds from operations (FFO) to debt averaging roughly 16% per year, in line with WEC's current significant financial risk profile. We could lower the ratings if WEC's business risk profile, which we assess as excellent, weakens. We could also lower the ratings if core financial measures consistently underperform our base-case forecast and remain less than credit supportive, including annual adjusted FFO to total debt less than

...We anticipate the company will continue to execute on its long-term strategy to reduce carbon-based air emissions from its generation fleet. Wisconsin Public Service Corp. (WPS) continues to diversify its generation fleet with renewable sources, most recently with the purchase of the Badger Hollow solar farm. WPS' operations are mostly in Wisconsin, providing modest regulatory jurisdiction diversity. WPS has 330,000 natural gas customers and about 435,000 electricity customers, of which Wisconsin comprises 95% and Michigan the remainder. We expect discretionary cash flow (DCF) to remain negative. DCF, or cash flow from operations after dividends and capital spending, will remain negative, driven by elevated capital spending that we expect will be partly funded with debt....

Full Report