Fitch Affirms Colver Power Project at 'BBB-'

CHICAGO--(Business Wire)--
Fitch Ratings has affirmed the Pennsylvania Economic Development
Financing Authority's (PEDFA) resource recovery revenue refunding
bonds issued on behalf of the Colver Power Project at 'BBB-'. The
rating applies to $169 million in senior bonds due 2018 (the 2005
series F bonds). The affirmation reflects the project's stable
operational and financial performance which Fitch expects to continue
through debt maturity. The Rating Outlook is Stable.

Colver Power Project is a 111-megawatt (MW) bituminous
waste-coal-fired generation facility operating on circulating
fluidized bed (CFB) technology located in Cambria County, PA. The
bonds are secured by, among other things, revenues resulting from a
long-term power sales agreement (PSA) with Pennsylvania Electric
Company (Penelec, rated 'BBB-', with a Stable Outlook by Fitch).
Ownership of the project is structured as a leveraged lease with
Inter-Power/AhlCon Partners (Constellation Energy Group and Northern
Star Generation; collectively, the partnership) as lessee.

Average debt service coverage ratios (DSCRs) in excess of 2 times
(x) since 2004 indicate strong financial results for the rating
category. Fitch expects increased debt service will reduce future
DSCRs to the 1.7x range. Operational results have been similarly
strong, as Colver's capacity factor has averaged 89.7% (in-line with
the Fitch base capacity factor of 90.8%) since 2004. Major maintenance
in 2006 reduced the capacity in that year to 83% but did not adversely
affect financial performance; Colver attained a DSCR of 2.44x in 2006
and 1.87x in 2007. Fitch views the 2006 capacity factor as an
historical outlier and continues to expect capacity factors in excess
of 90%; the 2007 capacity factor was 93.9%.

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, Chicago
Ben Cooper, 312-368-3173
Doug Harvin, 312-368-3120
or
Media Relations:
Brian Bertsch, 212-908-0549, New York

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