Moody's Investors Service revised its outlook on Wisconsin Public Power Inc.'s A1 rating to negative from stable because plans for additional debt may strain the system's balance sheet.
The action impacts the system's $370 million of outstanding power supply system revenue bonds.
The shift in outlook "reflects projected planned additional debt in 2013 mostly for environmental upgrades which may negatively pressure rates and competitiveness further, amid declining financial metrics over the past three years, and continued utilization of rate stabilization fund and lower liquidity," Moody's wrote.
The rating reflects WPPI's stable financial position; the completion of construction projects; a balanced resource portfolio featuring a mix of long-term contracts with staggered termination dates and owned generation sources, as well as fuel diversification and management's track record of resource management, Moody's said.
The rating also benefits from a diversified participant group totaling 51 members.