Fitch stabilizes Midland Cogen view

Fitch Ratings said it revised the outlook for Midland Cogeneration Venture LP (MCV) to stable from positive and affirmed the BB+ rating on the $131 million remaining of secured notes due 2025.

“The change to stable outlook reflects a combination of factors that has led to less than expected improvement and stability in the project's financial profile, due primarily to an unexpected loss of reactive power revenues and the larger-than-expected but volatile revenue resulting from nitrogen oxide (NOx) emission allowance pricing,” the agency said in a press release.

Fitch noted the Federal Energy Regulatory Commission’s decision to eliminate reactive compensation payments from December 2022 will shave about $7 million from revenues annually from previous forecasts.

“Partially offsetting the loss of reactive power revenue will be the higher projected revenue resulting from the project's ability to recover emissions costs under MCV's power purchase agreement (PPA) variable cost pass-through provisions. However, the emissions pass-through revenue is highly volatile, which increases financial performance uncertainty,” Fitch said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.