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S&P Ratings revises NY generator Astoria to stable on high demand expectations

S&P Global Ratings has revised its outlook on Astoria Energy LLC to stable from negative given that the company performed in line with the expectations over the past few quarters, with debt service coverage ratios in the 1.8x range.

Astoria Energy owns a combined-cycle, natural gas-fired power plant in Queens County, N.Y., with a 575-MW net capacity in summer and 655-MW net capacity in winter.

Capacity prices in the New York ISO's Zone J will improve as a result of upcoming the upcoming retirement of Entergy Corp.'s Indian Point nuclear plant and capacity constraints, S&P Global Ratings said. Zone J, the New York City zone, remains fully saturated with power supply from old generators, which makes it difficult for new power plants to enter the area. The Astoria plant began operating in 2006.

Furthermore, "Astoria's relatively low heat rate compared with the other local generators is advantageous on the dispatch curve," S&P Ratings said.
The rating agency also affirmed its BB- rating on Astoria with a recovery rating of 1, reflecting its expectation for "very high recovery" in the event of default.

Astoria is owned by a consortium of sponsors, including ENGIE SA, MyPower Corp., JEMB Family LP/Harbert Management Corp. and Energy Investors Fund.

The original S&P Global Ratings documents referred to in this news article can be found here.