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NEVADA POWER AUTHORITY (CALIF.) HYDRO REVENUE BONDS LOWERED TO 'B' BY FITCH -- FITCH FINANCIAL WIRE --

NEVADA POWER AUTHORITY (CALIF.) HYDRO REVENUE BONDS LOWERED TO 'B' BY
 FITCH -- FITCH FINANCIAL WIRE --
 NEW YORK, March 31 /PRNewswire/ -- Nevada Power Authority, California's $8.8 million Bowman Project Hydroelectric Revenue Bonds are downgraded to "B" from "A-" by Fitch. The credit trend is uncertain. The downgrade reflects the expiration of a water insurance policy with Birmingham Fire Insurance Co., a wholly-owned subsidiary of American International Group. The insurance policy was in effect for the five years following commercial operation of the project to protect the authority against revenue losses due to poor water conditions during that time. The policy would only take effect if the debt service reserve fund was drawn down completely, an event that never occurred.
 The bonds are secured by the authority's long-term, take-and-pay contract with Pacific Gas & Electric Co. (PG&E) which has PG&E paying a fixed price for the project's as-delivered capacity and available energy. Due to the ongoing drought in California, hydroelectric generation and the resulting revenues have been below average for the past several years. Since May 1987, the authority has dipped into the reserve fund on four separate occasions, most recently in May 1991, to satisfy interest payments due bondholders. Sufficient revenues were available for the authority to make the November 1991 interest payment of $462,000 without drawing further from the reserve fund. The reserve fund balance of $779,814, as of Dec. 31, 1991, is still well below the required amount of $1.9 million. In 1991, net revenues covered interest payments 0.99 times.
 While 1991 generation revenues were 11% higher than 1990 levels, the uncertainty of continued drought conditions in California poses a major risk for the future viability of the project. A normal water year should produce generation revenues of approximately $1.2 million. Generation revenues totaled $960,012 in 1991 versus $866,538 in 1990.
 -0- 3/31/92
 /CONTACT: Susan M. Courtney of Fitch, 212-908-0503/ CO: Nevada Power Authority ST: Nevada, California IN: UTI SU: RTG


SH -- NY079 -- 3511 03/31/92 15:08 EST
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Date:Mar 31, 1992
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