Standard&Poor's said today that Chile's Empresa Electrica del Norte Grande S.A. (Edelnor; 'CC'/Watch Neg) has been able to make its US$9.6 million interest payment due today as a result of better-than-expected cash flows, largely derived from a cost-reduction program implemented by new management and a higher revenue stream resulting from higher priced energy sales. Because ElectroAndina's and Edelnor's combined-cycle gas turbines suffered a prolonged gas cutoff earlier this year, generators in the northern interconnected system (SING) were forced to dispatch higher marginal cost coal plants, resulting in higher electricity prices. Edelnor was able to profit from this situation in that it dispatched plants fueled by pet coke, which have significantly lower marginal cost than coal units. Edelnor is
