S&P Global Ratings on Dec. 15 revised its outlook on Ohio Valley Electric Corp. to negative from stable, citing market and operating challenges for coal-fired power companies and the possible loss of one of the utility's sponsors.
Ohio Valley Electric owns two coal-fired power plants in Indiana and Ohio with a combined generating capacity of 2,400 MW. While the company lacks diversity in its generating portfolio, S&P noted that Ohio Valley Electric has completed the installation of all current necessary environmental compliance equipment, affording the company some operating flexibility.
S&P said its decision to revise its outlook also reflects the possibility that one of Ohio Valley Electric's sponsors, FirstEnergy Solutions Corp., which owns a 5% share in the utility, may file for bankruptcy in advance of its 2018 debt maturities. The loss of a sponsor could make it difficult for Ohio Valley Electric to maintain its credit risk profile, the ratings agency said.
S&P, however, affirmed its BBB- issuer credit rating on Ohio Valley Electric.
FirstEnergy Solutions is a subsidiary of FirstEnergy Corp.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.