Moody's ups Pinnacle West outlook to stable

Moody's Investors Service said it changed the outlooks of Pinnacle West Capital Corp. (Baa3 senior unsecured) and its subsidiaries, Arizona Public Service Co. (Baa2 senior unsecured) and PVNGS II Funding Corp. Inc. (Baa2, senior secured lease obligation bonds) to stable from negative.

The agency said that the stable outlook considers the companies' improving regulatory environment and operating performance with financial results that are expected to remain consistently within the range expected for integrated utilities rated Baa.

Moody's added that Arizona Public has begun to receive more supportive regulatory decisions, including "new connection" fees allowing faster recovery for new hookups plus a transmission cost adjustor and power supply adjustor, which has limited the company's exposure to fuel and purchased power fluctuations.

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