Moody's may cut Edison Mission Energy

Moody's Investors Service said it placed the ratings of Edison Mission Energy and its subsidiary, Midwest Generation Co., LLC under review for possible downgrade. Moody's also said it lowered the speculative grade liquidity rating to SGL-3 from SGL-2.

The downgrade review reflects the recent disclosure by parent company, Edison International, that Edison Mission Energy's earnings for 2009 would be $240 million to $360 million lower than 2008 results of $504 million due to margin compression caused by lower regional power prices reflecting lower natural gas prices and higher environmental related expenses, Moody's said.

The review also considers the fact that Edison Mission is substantially unhedged for 2009 through 2011, thereby exposing the company's earnings and cash flow to ongoing volatility and potentially greater margin compression, the agency said.

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