S&P suggests that European Commission concern at the differences in unbundling transmission and distribution from competitive activities raises the possibility that further measures should be considered. Any attempts to dismantle the business model of vertical integration, which combines energy generation and supply operations, and distribution and transmission networks, could destabilise the sector’s credit quality and increase earnings risk, says the agency.
“If the energy review leads to measures that alter the industry structure, lower barriers to entry, or weaken the operating environment, the credit quality of rated utilities could weaken,” said Peter Kernan, managing director at Standard & Poor’s Infrastructure Finance Ratings.
Linkedin
