
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, March 13, 1992                   TAG: 9203130263
SECTION: BUSINESS                    PAGE: A-9   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Short

SOME APCO STOCK DOWNGRADED

One class of Appalachian Power Co.'s preferred stock has received a downgraded rating. The rating, by Duff & Phelps, affects the company's shelf registration for $50 million of cumulative preferred stock.

Shelf registration refers to regulatory approval given Apco to offer the shares at a future date without public notice.

Duff & Phelps, a Chicago credit rating firm, said that it had lowered from A+ to A- its rating on Apco's preferred stock, along with bonds and debentures, as a result of Apco's inability to get higher rates approved by the West Virginia Public Service Commission.

In November, Apco asked for $44 million in higher revenues but the net result of the West Virginia commission action was essentially no change in the base rate.

The downgrading of rates shows Apco's weakness in financial protection, and investors probably will take notice, said Linda Housa of Duff & Phelps. Apco will need greater reliance on cutting capital and operating costs to offset some of the impact of downgrading of rates and the utility's general construction program, significantly higher than in recent years, "may be scaled back," the rating agency said.

Duff & Phelps said Apco's projected acid rain compliance costs are manageable, but the utility could be affected by costs shared with its sister firms in the American Electric Power Co. The extent of these costs will depend on the compliance strategy of the AEP power pool members, the national company said.

by CNB