S&P rates Aepco A

S&P said it assigned an A rating to Arizona Electric Power Cooperative Inc. (Aepco).

The outlook is stable.

Based on the company’s financial forecast, the agency said it calculates that the utility has the potential to achieve sound fixed charge coverage of at least 1.2x in 2016 through 2017 and nearly 1.3x in 2018 through 2020, S&P said.

Aepco is a generation and transmission cooperative serving six class A member distribution cooperatives primarily in Arizona, the agency explained.

Its class A members also serve small portions of California and New Mexico, S&P said.

The utility was created by the March 2016 merger of Aepco’s generation arm and Southwest Transmission Cooperative Inc., the agency said.

The stable outlook reflects the company’s track record of favorable rate decisions and its use of pass-through mechanisms that facilitated sound financial metrics at the generation and transmission utilities before they combined, S&P said.

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