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AES Ironwood LLC Feb 10
Standard & Poors, Feb 2010
Abstract
AES Ironwood is compensated through three main payments--a facility capacity rate, fuel conversion services, and ancillary services--pursuant to its power purchase agreement with offtaker PPL EnergyPlus LLC. Because AES Ironwood's toll agreement preceded deregulation, the facility is locked out from market opportunities created by rule changes since, making it highly dependent on the capacity payments. Moreover, since the start of operations, dispatch has been lower compared to the project's base-case expectation and the fixed capacity rate has accounted for the major proportion of net revenues. The Feb. 18, 2010, downgrade reflects a significant decline in the project's fixed capacity rate without commensurate cost reductions during 2010. All else equal, we estimate that this reduction will result in a decline of...
Companies mentioned in this report are: AES Ironwood LLC,Indianapolis Power & Light Co.,IPALCO Enterprises Inc.,AES Corp. (The),AES Gener S.A.,AES China Generating Co. Ltd.,C.A. La Electricidad De Caracas ,AES Eastern Energy L.P.,AES Red Oak LLC,AES Sul Distribuidora Gaucha de Energia S.A.,AES CHIVOR & CIA S.C.A. E.S.P.
Action: Review
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Full Analysis
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