Thai power companies unaffected by floods

Standard & Poor's Ratings Services said today that its ratings on Thailand-based power

companies Electricity Generating Authority of Thailand (EGAT; BBB+/Stable/--, axA+/axA-1)

and Ratchaburi Electricity Generating Holding Public Co. Ltd. (RATCH; BBB+/Stable/--;

axA+/--) are unaffected by large-scale flooding in the country.

We understand that the flooding has not significantly affected EGAT's power generation

plants and transmission networks. Nevertheless, we expect the company's sales will decline

in the last quarter of 2011. The flood-related shutdown of several factories and warehouses

will lower electricity demand from the industrial segment in the last quarter.

RATCH's power generation plants are primarily located in Ratchaburi province, which has not

been affected by the floods. In addition, the company's cash flows are protected from any

demand-side risk because its power purchase agreements with EGAT ensure steady capacity

payments against agreed levels of electricity availability and heat rate.

Reuters

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