Moodys.com

Please Note

We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""

The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.

Back to Previous Page

Email Research

Recipient email addresses will not be used in mailing lists or redistributed.

Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.

Enter the
characters you see

Can't read?
Try a new set

Send

Cancel

Email Research

Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.

Thank you!

You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.

Already a customer?

Don't want to see this again?

Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

By clicking “I AGREE”, you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s information that becomes accessible to you (the “Information”). References herein to “Moody’s” include Moody’s Corporation. and each of its subsidiaries and affiliates..

Terms of One-Time Website Use

1. Unless you have entered into an express written contract with www.moodys.com to the contrary and/or agreed to the Terms of Use at www.moodys.com or ratings.moodys.com, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.

2. CREDIT RATINGS AND MOODY’S MATERIALS FOUND ON WWW.MOODYS.COM OR SITES OTHER THAN RATINGS.MOODYS.COM MAY NOT BE DISPLAYED IN REAL TIME. FOR REAL-TIME DISPLAYS OF CREDIT RATINGS AND OTHER INFORMATION REQUIRED TO BE DISCLOSED BY MIS PURSUANT TO APPLICABLE LAW OR REGULATION, PLEASE USE RATINGS.MOODYS.COM.

3. You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities. Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision. No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.

4. To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

5. You agree to read and be bound by the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.

6. You agree that any disputes relating to this agreement or your use of the Information, whether in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.

I AGREE

Export PDF

Export CSV

Related Issuers

Related Research

Announcement:

Moody's says Japanese nuclear problems create contagion risk for US nuclear generation operators

14 Mar 2011

New York, March 14, 2011 -- Moody's Investors Service said the recent nuclear incidents in Japan, specifically with respect to the Fukushima-Daiichi and Fukushima-Daini nuclear power generating stations, will be viewed as a material credit negative for the US nuclear generation industry but are not sufficient enough to result in a change to individual issuer ratings or rating outlooks at this time.

For now, we assume near-term operating costs for US nuclear generation facilities are likely to rise, and the magnitude of the increase could be affected by the unfolding events in Japan.

"The nuclear generating sector operates within a global and national fraternity" said Jim Hempstead, Senior Vice President "so contagion risk factors, especially with respect to safety, are high."

Increased political and regulatory intervention can fuel uncertainties complicating long term investment decisions. US owners of un-regulated nuclear generation, typically un-regulated power companies operating in competitive markets, will be more negatively impacted than regulated utilities. Regulated utilities typically operate with a greater assurance of cost recovery whereas un-regulated power companies can only rely on market prices. Some un-regulated power companies that operate nuclear power plants are capitalized with higher levels of debt and with two being rated in the non-investment grade rating categories (NRG Energy: Ba3 Corporate Family Rating / negative outlook and Energy Future Holdings Corp: Caa2 Corporate family rating / negative outlook).

Exelon Generation (A3 senior unsecured / stable), a subsidiary of Exelon Corporation (Baa1 senior unsecured / stable), is the most exposed of all US issuers as more than 90% of its electricity production comes from 17 nuclear generating stations.

Many US nuclear operating plants are approximately the same age as the plants at Fukushima and their overall reactor and safety designs are similar. US-based reactors tend to have a higher overall capacity factor than their Japanese counter-parts, largely due to a regulatory operating difference. In Japan, regulations require more frequent and lengthy scheduled outages of nuclear plants. As a result, we estimate the Japanese nuclear generating fleet tends to exhibit a lower average capacity factor (roughly 70%) than the US (roughly 90%).

"Our concern is related to rising risks associated with potentially more stringent safety, evacuation and emergency response measures and the prospect for renewed public, political and environmental opposition" added Hempstead.

Despite these developments, Moody's continues to view the regulatory oversight empowered to the U.S. Nuclear Regulatory Commission (NRC) which exists across both regulated and un-regulated operators as a net credit positive. In addition to NRC oversight, we also note nuclear's competitive marginal cost characteristics, low carbon emission footprint and aggregate long-term safety record. Regulated utilities that own and operate nuclear generation in the U.S. also tend to be larger in size and often exhibit stronger financial credit metrics than their non-nuclear peers.

While no individual issuer rating actions are being contemplated at this time, the events in Japan serve as a reminder of several major credit weaknesses for the nuclear sector. These credit weaknesses include radioactive by-products, which are extremely dangerous to the environment, population safety and sovereign security.

Events in Japan will also likely add to existing opposition to the relicensing of some nuclear generating facilities. Moody's believes issuers that recently filed for a 20-year operating license extension with the NRC are likely to receive additional scrutiny during their license approval process. Plants with existing operating challenges or those that are located near metropolitan areas or near earthquake faults may find it more challenging and expensive to attain a license extension. See list of plants at the end of this report that have filed for a license renewal.

The NRC's combined construction and operating license (COL) process currently associated with new nuclear generating facilities could also be affected, in our opinion. It is conceivable the NRC may decide to more carefully evaluate next generation reactor designs and their safety and emergency response capabilities, especially in light of their passive safety designs or increased political influences.

We currently see only two new nuclear generating facilities as potentially being exposed, both of which reside in the regulated utility framework. These include the Vogtle station in Georgia, owned by: Southern Company (Baa1 senior unsecured / stable) and its subsidiary, Georgia Power Company (A3 senior unsecured / stable); Oglethorpe Power (Baa2 Long Term Issuer Rating / stable); and the Municipal Electric Authority of Georgia (MEAG: A1 Long Term Issuer Rating / stable). We note the Vogtle project is to date, the first, and only one, of the new nuclear projects to sign a conditional term sheet with the US Department of Energy for conditional loan guarantees.

The other new nuclear generating facility is the VC Summer station in South Carolina, owned by: SCANA Corporation (Baa2 senior unsecured / negative) and its subsidiary, South Carolina Electric and Gas (Baa1 Long Term Issuer Rating / negative) and the South Carolina Public Service Authority (Santee Cooper: Aa2 revenue backed / stable).

Both of these new plants are in the early stages of construction; both chose sites located at existing operating sites, and both expect to receive their NRC COL approval by mid-to-late year 2011. More importantly, both plants are pursuing construction of the AP 1000 (Westinghouse) reactor design, which uses passive safety systems, including the safety systems related to cooling water. Although a passive cooling water safety system might not have failed due to a power interruption, the potential duration of the emergency might raise concerns.

Additionally, Moody's believes that the events in Japan may add another layer of uncertainty for the development plans of NRG Energy's (NRG: Ba3 Corporate Family Rating / negative) South Texas Project 3 & 4 (STP 3&4). Specifically, the Toyko Electric Power Company (TEPCO: Aa2 Long Term Issuer Rating / on review for possible downgrade), the owner of Fukushima-Daiichi and Fukushima Daini nuclear power stations, has plans to make up to an 18% investment in STP 3&4. But in light of recent events and the capital needs now unfolding at TEPCO, we would not be surprised if TEPCO's efforts to invest internationally were scaled back materially. Abandoning the new project at STP would likely be viewed as a credit positive for NRG. San Antonio CPS (Aa1 senior secured / stable) is the other owner of the STP proposed expansion project.

From a credit perspective, we see a material increase in near-term uncertainties for the nuclear industry, a credit negative. Moreover, if the environment in Japan deteriorates further, or if other older nuclear facilities experience major operating problems, our financial metric thresholds to maintain a given rating could be revisited and increased.

"We have been ascribing a materially higher business and operating risk factor to issuers pursuing new nuclear generation since 2007" said Hempstead "and we assume these issuers will maintain enough financial strength to weather these kinds of event risks."

Moody's acknowledges the current level of uncertainty in Japan and the fact that the government, utilities and first responders remain in a high state of emergency. Nevertheless, in a separate action, we placed the ratings of Tokyo Electric Power Company (TEPCO) on review for a possible ratings downgrade.

In the list that follows, we note the operating reactor; whether it operates within a regulated or un-regulated market structure; the general location of the facility; the approximate date that the license renewal application was filed with the NRC; the parent company of the operator and its rating and rating outlook. The data was sourced by the Nuclear Energy Institute's (NEI) website. The NEI is a nuclear industry lobby group.

The reactors include:

• Pilgrim (un-regulated), Plymouth, MA, January 2006 (Entergy: Baa3 senior unsecured / stable);

• Vermont Yankee (un-regulated), Vernon, VT, January 2006 (Entergy);

• Indian Point 2 & 3 (un-regulated) , New York City, NY, April 2007 (Entergy);

• Prairie Island 1 & 2 (regulated), Welch, MN, April 2008 (Xcel Energy : Baa1 senior unsecured / stable);

• Palo Verde 1, 2 & 3 (regulated), Phoenix, AZ, December 2008 (Pinnacle West: Baa3 senior unsecured / stable);

• Crystal River 3 (regulated), Crystal River, FL, December 2008 (Progress Energy, currently involved in a merger with Duke Energy: Baa2 senior unsecured / stable);

• Salem 1 & 2 (un-regulated), Hancock's Bridge, NJ, August 2009 (Public Service Enterprise: Baa2 senior unsecured / stable);

• Hope Creek (un-regulated), Hancock's Bridge, NJ, August 2009 (PSEG);

• Diablo Canyon (regulated), Avila Beach, CA, November 2009 (PG&E: Baa1 senior unsecured / stable);

• Columbia Generating Station 2 (regulated), Richland, WA, January 2010 (Energy Northwest: Aaa Long Term Issuer Rating / negative);

• Seabrook (un-regulated), Seabrook, NH, June 2010 (NextEra);

• Davis-Besse (un-regulated), Oak Harbor, OH, August 2010 (FirstEnergy: Baa3 senior unsecured / stable);

• South Texas Project 1 & 2 (quasi-regulated), Bay City, TX, October 2010 (STP Nuclear Operating Company: San Antonio CPS Aa1 senior secured / stable; City of Austin, Texas electric: A1 senior secured / stable and NRG Energy: Ba3 Corporate Family Rating / negative).

The NEI website also notes several reactors that are expected to apply for a 20-year license renewal over the near-term horizon. These reactors are also likely to be exposed to more stringent operating regulations, potentially accompanied by higher costs.

The reactors include:

• Limerick 1 & 2 (un-regulated), June 2011 (Exelon);

• Grand Gulf (regulated), Port Gibson, MS, July 2011 (Entergy);

• Callaway (regulated), Fulton, MO, October-December 2011 (Ameren: Baa3 senior unsecured / stable);

• Waterford 3 (regulated), Taft, Louisiana, January 2013 (Entergy);

• Sequoyah 1 & 2 (regulated), April-June 2013 (Tennessee Valley Authority: Aaa Long Term Issuer Rating / stable);

• Byron 1 & 2 (un-regulated), April-June 2013 (Exelon);

• Braidwood 1 & 2 (un-regulated), April-June 2013 (Exelon);

• Perry (un-regulated), Perry, OH, December 2014 (FirstEnergy);

• River Bend (regulated), St. Francisville, LA, January 2015 (Entergy);

• And several other unidentified plants owned by Exelon and Strategic Teaming and Resource Sharing (un-rated).

New York
James Hempstead
Senior Vice President
Infrastructure Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
William L. Hess
MD - Utilities
Infrastructure Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's says Japanese nuclear problems create contagion risk for US nuclear generation operators

No Related Data.

© 2022 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $5,000,000. MCO and Moody’s Investors Service also maintain policies and procedures to address the independence of Moody’s Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY100,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

Back to Previous Page

Moodys.com