Moody's cuts Columbus Southern to negative

Moody's Investors Service said it changed the outlook for Columbus Southern Power Co. (A3 senior) to negative from stable. The ratings for parent American Electric Power Co. (Baa2 senior/stable) and its other principal Ohio subsidiary Ohio Power Co. (Baa1 senior/stable) were affirmed.

The negative outlook for Columbus Southern reflects the proposed merger combination with affiliate Ohio Power, Moody's said. The proposed merger to form AEP Ohio was filed with the Public Utilities Commission of Ohio in December 2010. The merger is expected to be approved by year-end 2011.

American Electric's Ohio utility businesses remain exposed to lingering uncertainty associated with potential legislative restructuring intervention, request for non-bypassable generation charges, other rate-making transition structures to market-based rates as compared to fully regulated rates and potential customer switching issues, the agency noted.

Nevertheless, the Ohio regulatory and political framework is a net credit positive for all of the utilities in Ohio, Moody's said.

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