Moody’s revises Duke Energy view to negative

Moody’s Investors Service said it revised the outlook for Duke Energy Carolinas, LLC, Duke Energy Progress, LLC and their parent company Duke Energy Corp. to negative from stable and affirmed their ratings.

This action does not affect the ratings or outlooks of Duke Energy’s other subsidiaries, Moody’s said.

“The negative outlook for Duke Energy’s largest subsidiary Duke Carolinas reflects a weakened financial profile that is not likely to return to prior levels,” said Laura Schumacher, a Moody’s vice president and senior credit officer in a press release.

Duke Carolinas is in a general rate case in North Carolina, its largest jurisdiction. Moody’s said it sees the capital program will likely cause its ratio of cash flow from operations excluding changes in working capital (CFO pre-WC) to debt to stay below the 25% financial metric threshold the agency established to maintain the utility’s current A1 rating.

The outlook further recognizes the potential for increased downward pressure on the company’s credit profile if the North Carolina Utilities Commission denies Duke Carolinas request to continue the timely recovery of its coal ash remediation spending and its ability to earn a return on these expenditures.

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