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Standard & Poor's has affirmed its AA-/A-1+ credit ratings of Transpower, and has revised the rating outlook for the electricity grid operator from negative to stable.
The rating agency said the outlook revision reflected Transpower's deal with the Commerce Commission last year. The commission abandoned plans to place the company's transmission services under regulatory control in return for Transpower agreeing to suspend and rebate price increases.
The competition watchdog said at the time that the deal would provide incentives for Transpower to efficiently invest in the transmission grid while limiting its ability to extract excess profits.
S&P said the settlement provided greater certainty that the company would earn a commercial rate of return on its substantial medium term capital expenditure programme.
