Fitch Rts JEA (FL) Electric Sys Revs, Series Three 2008A 'AA-/F1+'

NEW YORK--(Business Wire)--Fitch Ratings has assigned a rating of 'AA-/F1+' to the
$100,000,000 JEA variable-rate electric system revenue bonds, Series
Three 2008A. The 'AA-' rating is based on the long-term credit quality
of JEA's Electric System. The short-term 'F1+' rating is based on the
liquidity support provided by KBC Bank N.V., acting through its New
York Branch, in the form of a standby bond purchase agreement (SBPA).
In addition, Fitch affirms the 'AA-' rating on JEA's outstanding
senior and subordinate lien electric revenue bonds and outstanding St.
Johns River Power Park (SJRPP) bonds. The bonds are expected to price
the week of Jan. 28, 2008. The proceeds of the bonds will be used to
finance a portion of the costs of additions, extensions and
improvements to the Electric System.

JEA is an integrated utility providing electric and water service
within the city of Jacksonville, FL, and parts of three neighboring
counties. JEA maintains 3,300 megawatts (mw) net generating capacity,
and serves over 400,000 electric customers.

The 'AA-' ratings take into account management's proven commitment
and progress with their electric system pricing philosophy that is
expected to fully meet its financial targets over the next few years.
These targets include continued solid debt service coverage in the
2.50 range, over 60 days cash on hand, and for free cash flow to reach
a level sufficient to fully fund annual repair and replacement needs
of the utility. Additionally, JEA expects that by 2012 net debt will
decline due to scheduled principal repayments exceeding new issuance.
As part of the pricing philosophy, management implemented new fuel
rates that went into effect on Oct. 1, 2007. This rate is set to
recover any deferrals from 2007, as well as projected fuel costs for
fiscal 2008. The rating also reflects JEA's ongoing review of its
power supply needs and options based on its Integrated Resource Plan
(IRP), which include the construction of its new gas-fired combustion
turbine (CT), demand-side management programs, and other fuel
diversity efforts as well as capital spending associated with
environmental requirements.

The ratings further reflect key credit underpinnings including:

--Strengths;

--Strong management practices;

--JEA's efficient generating portfolio;

--Competitive retail electric rates;

--Diverse and economically sound customer base;

--Improving financial performance and liquidity.

Credit Drivers

--Currently high debt burden with a sizable five-year capital
improvement plan;

--Increasing attention to regulating carbon emissions and
uncertainties as to the ultimate costs;

--Expectations that JEA will meet its goal to cash fund 100% of
repair and replacement, and reduced capital additions by 2010.

The SBPA provides for the payment of the purchase price of
tendered bonds during the daily and weekly mode, and is sized to cover
the principal portion of the purchase price and 36 days of interest at
the maximum interest rate of 12%, based upon a year of 365 days. The
SBPA will also be available to pay the principal component of the
purchase price upon conversion to a term or flexible rate mode. The
SBPA will expire on the stated termination date of Jan. 29, 2009,
unless such date is extended, or upon the occurrence of certain events
of termination as specified in the SBPA. The short-term rating will
expire upon any expiration or termination of the SBPA. The remarketing
agent for the bonds is Lehman Brothers Inc. The bonds are expected to
be delivered on or about Jan. 31, 2008.

The bonds initially bear interest in the weekly rate mode, but may
be converted to a daily, auction, term, flexible or fixed rate mode.
While bonds bear interest in the daily or weekly rate mode, interest
is payable on the first business day of each month, commencing March
3, 2008. During the daily and weekly rate modes, holders have the
option to tender their bonds on any business day, following the
required prior notice to the tender agent. The bonds are subject to
mandatory tender: on the fifth business day prior to the SBPA
expiration date; on the date of any SBPA substitution if the rating
has not been confirmed by each rating agency then rating the bonds; on
any mode adjustment date; during the term or flexible rate mode, on
each rate adjustment date; during the term mode at the option of JEA
after bonds are eligible for optional redemption at a redemption price
of 100% of par; at least 20 days after JEA directs the tender agent to
call a mandatory tender in order to enable any resolution amendment
requiring the consent of bondholders to take effect; and on the 15th
day after the tender agent receives notice from the bank of its
intention to terminate the SBPA. Optional and mandatory redemption
provisions also apply to the bonds pursuant to the terms of the
authorizing documents.

(For more information on the credit quality of JEA's Electric
System, see the Fitch press release dated Jan. 15, 2008, available on
the Fitch Ratings web site at www.fitchratings.com.)

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from this
site, at all times. Fitch's code of conduct, confidentiality,
conflicts of interest, affiliate firewall, compliance and other
relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, New York
Ronald P. McGovern, 212-908-0513
(for information on the Series Three 2008 A bonds)
Karl Pfeil, 212-908-0516
(for information on JEA)
or
Media Relations:
Cindy Stoller, 212-908-0526

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