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Moody’s turns CenterPoint Energy view to negative
Moody’s Investors Service said it changed the outlook of CenterPoint Energy Resources Corp. (CERC) to negative from stable. Simultaneously, Moody’s affirmed all ratings of CERC, including its A3 senior unsecured rating.
The severe weather across Texas and other parts of CERC’s service territory resulted in a significant hike in the natural gas price and CERC’s purchased gas cost, the agency said.
“We see higher uncertainty around the recovery period of CERC’s higher fuel commodity costs, putting pressure on the company’s financial profile,” stated Jairo Chung, a Moody’s analyst, in a press release.
The extreme cold weather resulted in CERC incurring about $2.5 billion of gas purchase costs, more than doubling its 2020 cost amount.
“We expect CERC to increase its regulatory assets to recover the costs over time, and we see additional debt that will result in CERC’s cash flow from operations before changes in working capital (CFO pre-WC) to debt to fall below 19%,” the agency said.
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