S&P views Avangrid units negatively

S&P said it revised its outlook for Avangrid Inc.’s Connecticut-based subsidiaries United Illuminating Co. (UI), Connecticut Natural Gas Corp. (CNG) to negative from stable and the Southern Connecticut Gas Co. (SCG) to developing from positive.

“Recent regulatory and legislative developments in Connecticut have been inconsistent with our view of the state's regulatory framework for investor-owned utilities. These include the passing and signing of Senate Bill 7, which discontinued the use of the electric system improvement charge in future rate proceedings, as well as the allowance for Connecticut's Public Utilities Regulatory Authority (PURA) to have discretion regarding the consistent implementation of decoupling.

“We assess these developments as negative for credit quality. Furthermore, PURA's recent less-than-credit-supportive rate orders could indicate Connecticut's regulatory construct may be becoming less supportive for credit quality,” the agency said in a press release.

“The negative outlooks for UI and CNG reflect our view that we could downgrade the companies over the next 12 to 18 months if we revise downward our assessment of Connecticut's regulatory jurisdiction.

The developing outlook on SCG reflects the possibility that we could either affirm, raise, or lower our rating on SCG over the next 12 to 18 months. This will depend on SCG's financial measures and our assessment of Connecticut's regulatory jurisdiction,” S&P said.

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