Research Update: Invenergy Thermal Operating I LLC Ratings Placed On CreditWatch Negative Following Texas Winter Storm

We are placing our ratings on Invenergy Thermal Operating I LLC (ITOI) on CreditWatch with negative implications. The CreditWatch listing reflects that one of ITOI's power plant assets may have a sizable liability due to the catastrophic and unprecedented winter storm that hit Texas two weeks ago. As mentioned in our prior rating reports, ITOI's portfolio of seven power plants (2.68-gigwatts of net capacity) includes Ector County Energy Center LLC, a 330- megawatt (MW) combustion turbine (CT) peaking unit located in Texas. Ector hedges substantially all of its output through a heat rate call option (HRCO) that extends through 2022. In such a hedge, the key risk for the generator is that it is available to dispatch if called to

...- We are placing our ratings on Invenergy Thermal Operating I LLC (ITOI) on CreditWatch with negative implications. - The CreditWatch listing reflects that one of ITOI's power plant assets may have a sizable liability due to the catastrophic and unprecedented winter storm that hit Texas two weeks ago. - As mentioned in our prior rating reports, ITOI's portfolio of seven power plants (2.68-gigwatts of net capacity) includes Ector County Energy Center LLC, a 330- megawatt (MW) combustion turbine (CT) peaking unit located in Texas. - Ector hedges substantially all of its output through a heat rate call option (HRCO) that extends through 2022. In such a hedge, the key risk for the generator is that it is available to dispatch if called to generate. If it is not, it is forced to buy power in the ERCOT market to satisfy its hedge position. ERCOT prices peaked at nearly $9,000 per megawatt-hour, an incredible level. - We are unable to confirm whether Ector was able to perform under the terms of...

Research Update