Fitch Rates Nebraska Power Dist Revs 2006 Series A 'A+'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. assigns an 'A+' to Nebraska Public Power District's (NPPD NPPD Nebraska Public Power District NPPD Nuclear Power Plant Division NPPD National Protection & Programs Directorate (DHS) ) $162 million general revenue bonds, 2006 series A. Fitch also affirms the 'A+' rating on NPPD's outstanding general revenue bonds. The Rating Outlook is Stable. Bond proceeds will fund NPPD's share of the costs of construction of a coal-fired generating unit, refund certain outstanding bonds, and fund capital additions to NPPD's facilities. The 2006 series A bonds are scheduled to price the week of Sept. 18, 2006, with Lehman Brothers as senior manager. NPPD's rating is supported by the utility's low-cost and well-diversified mix of generating resources, stable finances and long-term power sale contracts. In 2005, NPPD's energy sales derived primarily from a stable mix of coal- (60%) and nuclear- (24%) fueled generation. To meet future baseload needs, NPPD is taking a 23.67% (approximately 157 megawatt (mw)) interest in Nebraska City 2, a 663 mw coal-fired unit being constructed by Omaha Public Power District Omaha Public Power District, or OPPD, is a public electric utility in the State of Nebraska. It is one of the largest publicly owned electric utilities in the United States, serving more than 310,000 customers in 13 southeast Nebraska counties. that is expected to become operational in 2009. NPPD's financial performance has been historically strong and stable due to sound financial policies and its stable fuel mix. In 2005, NPPD had debt service coverage of 1.39 times (x). This ratio includes a $17.6 million lease payment, which is technically subordinate to debt service. Subordinating that payment increases NPPD's debt service coverage to a strong 1.5x. In addition, NPPD has approximately $140 million of cash (or three months of operating expenses). Fitch believes current and forecasted liquidity is sufficient for NPPD given its non-gas-based power supply portfolio. Credit concerns include the operational performance of NPPD's Cooper Nuclear Station Cooper Nuclear Station (CNS) is a boiling water reactor (BWR) type nuclear power plant located on a 1,251 acre (5.1 km²) site near Brownville, Nebraska. It is the largest single unit electrical generator in Nebraska. (CNS See Continuous net settlement. CNS See continuous net settlement (CNS). ). For much of its history, CNS has had operational and regulatory compliance issues. In its favor, Fitch recognizes that NPPD has achieved a consistent trend of improvements at CNS and completed the necessary compliance remediation steps in 2005 required by the Nuclear Regulatory Commission Nuclear Regulatory Commission (NRC), an independent U.S. government commission, created by the Energy Reorganization Act of 1974 and charged with licensing and regulating civilian use of nuclear energy to protect the public and the environment. . Given the unit's prominence in NPPD power supply and the tight cost structure of its associated off-system sale contracts, Fitch believes that CNS' continued cost containment, operational consistency, and regulatory compliance remains an essential component of NPPD's credit profile. Fitch recognizes certain developing factors such as potential environmental compliance costs for the corporation's coal-based generating units (estimated to cost over $600 million over the next five years). Fitch also continues to monitor the effects that water flow regulation priorities and a continued regional drought could have on NPPD's costs. Fitch believes this risk has not been meaningful, although it creates uncertainty for NPPD's power supply availability and costs each year. NPPD is a public corporation that serves most of rural Nebraska on a retail and wholesale basis. In 2005, NPPD's revenues consisted of 41% wholesale, 26% retail, and 31% off-system contracted sales. 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