Standard & Poor's has revised its business profile scale for public power agencies to give investors more details to figure out each rated utility's ability to compete in a deregulated market.
It expanded its five-point scale to a 10-point scale, similar to the rating system used for investor-owned utilities. A "1" rating is the "most capable of competing," so that investors can better gauge a public power's ability to meet competitive challenges and market developments, such as separation of generation and transmission facilities.
Utilities that score between 5 and 8 are likely to face formidable challenges. "It is these utilities' costs structures and wholesale and retail rates that show the greatest disparities with expected market rates," according to S&P.
The most favorable business profile scores run from 1 to 4. The wires business is expected to lead these companies.