NEW YORK, Feb. 7 /PRNewswire/ -- Standard & Poor's today affirmed its
triple-'B' rating on Tenaska Georgia Partners L.P.'s (TGP) $275 million senior
secured bonds due 2030. The outlook is stable.
The rating affirmation follows the successful completion and start-up of
Units 1 and 3 of Phase I of the project in June 2001. The completion of Unit 2
was delayed due to damage to the compressor section of the combustion turbine,
but commercial operation was subsequently achieved in August 2001. The
remaining three units of Phase II are on schedule to come online in June 2002.
Exelon Generation Co. LLC (Exelon; single-'A'-minus/Stable), the offtaker, is
fulfilling its obligations under the terms of the power purchase agreement
(PPA), and is purchasing output from the units that are in operation.
The Unit 2 delay had minimal economic impact on TGP. The cost of delay
included approximately $654,000 of interest during construction and
$5.1 million of liquidated damages to Exelon. However, these costs will be
adequately covered by a claim for a minimum of $1.6 million of liquidated
damages to be received from the engineering, procurement, and construction
contractor, $3.8 million from the business interruption insurance, and a
$12 million construction contingency fund.
TGP is a special-purpose entity formed in 1998 to construct and operate a
936 MW gas-fired peaking facility located 40 miles southwest of Atlanta, Ga.
Pursuant to a 29-year tolling arrangement, Exelon will purchase all of the
capacity and electric power generated by TGP. At the time of the bond
issuance, PECO Energy Co. (PECO; A-/Stable) was the counterparty to the PPA.
However, Exelon has since assumed the rights and obligations of PECO under the
PPA, following the formation of Exelon Corp. through the merger of PECO and
Unicom Corp.
OUTLOOK: STABLE
Low construction and operational risks, and stable cash flow expected from
Exelon allow Standard & Poor's to conclude that the outlook for TGP is stable.
Limited potential for increased revenues and the intrinsic operational risk of
a single-asset facility will likely limit a rating upgrade.
SOURCE Standard & Poor's
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Related links:
http://www.standardandpoors.com/ratings
CONTACT:
Holly Harper, New York, +1-212-438-2017, or
Tobias Hsieh, New York, +1-212-438-2023, both for Standard &
Poor's
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