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Fitch expects FERC to fast track review of AEP, FirstEnergy Ohio PPAs

FitchRatings expects parties opposing AmericanElectric Power Co. Inc. and FirstEnergyCorp.'s income guarantees for "vital" power plants to seeka rehearing and ultimately a judicial review of the Public Utilities Commissionof Ohio order.

The movecould mean further scrutiny of the power purchase agreements which are also up forreview at FERC based on complaintsfrom the Electric Power Supply Association and merchant generators operating inthe PJM Interconnection LLCmarket, including Calpine Corp.and Dynegy Inc.

Fitchbelieves the complaints could be fast tracked and addressed prior to PJM's nextcapacity auction in May or scheduled for hearing which could take a year or more.So far the PPAs represent a constructive credit development for the companies thoughpending complaints with FERC "are a source of uncertainty regarding the viabilityof the affiliate PPAs," Fitch said April 4.

In aseparate release, Fitch said it does not expect FirstEnergy's ratings to changeas a result of the approval of the PPAs with the Public Utilities Commission ofOhio. The company is rated BB+ and has a positive outlook at Fitch Ratings.