Fitch affirms PPL Montana

Fitch Ratings said it affirmed the BBB rating on PPL Montana, LLC's pass-through trust certificates due 2020.

The outlook is stable.

The agency said the ratings are supported by PPL Montana's strong financial performance in which fixed coverage charge ratios averaged 2.95 times over the last eight years, Fitch's projection of average fixed coverage charge ratios of 2.76 times under low merchant power prices as hedges expire, solid operating performance from a diverse portfolio of coal and hydro assets and hydro assets that benefit from favorable dispatch.

Looking forward, PPL Montana faces the potential impact of material increases in merchant market exposure beginning in 2012 and the expiration of its fuel supply contract for the 154 megawatt Corette coal facility in 2011, Fitch said, and additional financial pressure is derived from its $479 million five-year capital plan.

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