Fitch Rates Great River Energy $350MM First Mtge Bonds 2008A 'A-'

Business Wire, April 21, 2008

NEW YORK -- Fitch assigns an 'A-' rating to Great River Energy's (GRE) $350 million first mortgage bonds, series 2008A. The Outlook is Stable. Proceeds from the 30-year fixed-rate bonds will be used to refund revolving credit lines as well as support GRE's capital additions and improvements to its generation and transmission assets. The bonds are expected to price between April 22 and April 24.

Supporting the 'A-' rating and Stable Outlook are GRE's competitive rates, an experienced management team, and long-term wholesale power contracts with its 28 members. The members show solid credit strength and diversity. Furthermore, GRE demonstrates adequate financial metrics for the rating category.

Looking forward, key rating drivers include:

--GRE's ability to meet its goals to strengthen financial metrics (debt service coverage target of 1.2 times (x) by 2008 and equity-to-capitalization target of 20% by 2020) while implementing a $2.1 billion capital improvement plan;

--Cost and ultimate impact of potential requirements to reduce CO2 emissions.

GRE has over 3,300 megawatts (mw) of owned and purchased power. GRE conservatively projects annual growth of 2% (2008-2013) although its members experienced over 5% annual growth in previous years. Over the next ten years, GRE expects to increase capacity to over 4500mw. As such, GRE will add over 1400 mw of owned generation to its largely coal generating portfolio. GRE will primarily meet members' needs with the addition of peaking gas and wind resources and a relatively small amount of coal-fired generation. Member rates are project to increase to 66 mills by 2013 from 49 mills in 2007. GRE projects funding 42% of its capital plan through cash from operations generated from 4.4% annual rate increases through 2013.

GRE is a generation and transmission (G&T) cooperative providing wholesale electric energy to 28 member distribution cooperatives, serving more than 631,000 primarily residential and small-commercial customers. GRE is the fourth-largest G&T cooperative in the United States and the second-largest wholesale power provider in Minnesota.

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