Fitch Rates Florida Municipal Power Agency's $61MM Various Project Revs

NEW YORK--(Business Wire)--
Fitch Ratings has assigned the following ratings to the Florida Municipal Power
Agency's (FMPA) project revenue bonds listed below (total of $61 million):

--$10,170,000 Stanton Project, series 2009A 'A+';

--$6,770,000 Stanton II Project, series 2009A 'A+';

--$2,855,000 Tri-City Project, series 2009A 'A+';

--$40,785,000 St. Lucie Project, series 2009A 'A'.

In addition, Fitch affirms the outstanding All-Requirements Project (ARP),
Stanton I, Stanton II and Tri-City revenue bonds at 'A+' and St. Lucie Project
revenue bonds at 'A'. The Outlook is Stable.

The bonds are secured by revenues of the respective projects- the take-or-pay
contracts of Stanton, Stanton II, Tri-City and St. Lucie and the take-and-pay,
full requirements contracts of the ARP.

Fitch notes that positive developments have eased the near-term financial
pressures on the ARP, which is the largest FMPA project. Specifically, the
expiration of some of the agency's hedging contracts have reduced collateral
posting requirements and alleviated immediate liquidity concerns. Of FMPA's $125
million line of credit with Wachovia Bank (rated 'AA-' by Fitch), $78 million
remains available, which Fitch believes is sufficient to support potential
collateral postings requirements over the next year. Favorably, FMPA has renewed
its line of credit with Wachovia, which expires in December 2010. As another
indication of reduced financial pressure, Fitch notes that construction funds
from 2009A bond proceeds are no longer being used to meet collateral posting
requirements. For FMPA's ARP participants, the expiration of uneconomic natural
gas hedges are expected to result in a noticeable decline in wholesale costs by
early 2010, although prices are projected to remain above market price.

Longer term, FMPA's amended hedging strategy will be to enter into forward
contracts that are shorter term in nature. The new strategy should limit the
agency's divergence from market prices and therefore the size of collateral
posting requirements, but will increase the utility's exposure to market
fluctuations. Fitch will continue to monitor the willingness and ability of the
FMPA and underlying participants to recover costs in a timely manner.

Fitch will also monitor the longer-term implications of FMPA's relationship with
its members. Tensions between FMPA and some of its members have resulted in
three members (Ft. Meade, Lake Worth and Vero Beach) capping their load
requirement and three members (Ft. Meade Green Cove Springs, Starke) exercising
the option not to renew their contracts, which expire in 2035, 2037 and 2039
respectively. Fitch believes that the current credit impact on ARP is limited
and notes the strength of ARP's take-and-pay all requirements contracts, in
which all member energy and capacity needs must be met by the ARP (net of
non-dedicated resources). In addition, Fitch expects some of the member tension
to abate as FMPA's cost of power begins to decline and more closely resembles
regional prices.

The ARP's 'A+' rating reflects the diverse membership and long-term take-and-pay
full requirements contract. In addition, the rating reflects the project's
current liquidity position (over 60 days cash plus $78 million or 42 days in
available lines of credit) as well as debt service coverage (DSC) of 1.71 times
(x), which is in-line with the rating category.

The 'A+' ratings for Stanton I (DSC of 1.8x), Stanton II (1.4x), and Tri-City
(1.28x) reflect the strong cross-over of project participants and the close
operating and financial relationship between the projects and the ARP.

The 'A' rating for the St. Lucie project (DSC of 1.35x) is supported by its
solid operating performance including a license extension to 2043 and
court-validated, take-or-pay contracts with a diverse group of 15 participants
(11 of which participate in the ARP). The one-notch distinction between St.
Lucie and the other projects reflects the risk of a single-site nuclear project
and aggressive debt structure.

In addition to the discussion above, Fitch will monitor the following credit
drivers:

--Stability in the members' financial profiles given fuel price and economic
pressures;

--Impact of debt restructuring on all of FMPA's projects as well as the
appropriateness of the level of variable-rate debt within the total debt
structure;

--Maintenance of sufficient liquidity to meet working capital, construction, and
collateral posting needs.

FMPA is a non-profit, joint-action agency with five separate power supply
projects and one pooled financing project. Each project is independent from the
others, and revenues from one project may not be used to pay the costs of
another. In aggregate FMPA serves 30 municipal utility systems throughout
Florida. Proceeds from the various 2009A fixed-rate bonds will be used to
refinance the loans from the respective Pooled Loan Programs, finance any
capital improvements related to the respective project, and pay the cost of
issuance.

A full rating report will soon follow and will be available at
'www.fitchratings.com'.

Additional information is available at 'www.fitchratings.com'.

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Fitch Ratings, New York
Drake Richey, 212-908-0325
Christopher Jumper, 212-908-0594
or
Media Relations:
Cindy Stoller, 212-908-0526
Email: cindy.stoller@fitchratings.com

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