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volatile variable |
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While PNW and APS's credit metrics are consistent with slightly higher rated peers, the ratings also reflect the potential negative financial impact and liquidity challenges resulting from high and volatile variable costs due to the utility's growing reliance on natural gas and purchased power, and provisions that limit recovery of power supply costs under APS's commission-approved Power Supply Adjustor (PSA). Offsetting these positive rating factors is the company's need to rely on Prudential for financial support in the competitive and volatile variable annuity market. |
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