Moody's cuts long-term ratings of Orange and Rockland Utilities

Moody's on Jan. 26 downgraded the senior unsecured and long-term issuer ratings of Orange and Rockland Utilities Inc. to Baa2 from Baa1, citing its weakening financial profile and rising political and regulatory risks in New York.

The Consolidated Edison Inc. utility saw declining cash flow from operations due to lower deferred taxes and cash outflows in regulatory accounts over the past two years. Moody's expects this to continue over the next two years, compounded by heightened political pressure in its primary service territory of New York.

"With a less predictable business environment and projected cash flow to debt ratios expected to be around 15% for a sustained period of time, O&R's credit profile is better aligned with Baa2-rated peers" Ryan Wobbrock, vice president and senior credit officer at Moody's, said in a news release.

Moody's affirmed the utility's commercial paper rating at P2. The ratings outlook is stable.