CHICAGO — The ratings of joint power agencies with an ownership interest in the Illinois-based Prairie State coal-fired plant are expected to withstand the burden of incurring an additional $1 billion for cost overruns, but further problems could have a negative impact, Fitch Ratings writes in a report due out today on the project.

Additional construction costs are expected to be limited by a new engineering, procurement, and construction contract signed in July by the project’s participants — which collectively have issued $5 billion of mostly tax-exempt debt — and by construction manager Bechtel Power Corp. It locks in a fixed price of $4 billion. When the nine participating agencies first signed on to the project a few years ago, the project carried a “targeted” price of $2.9 billion.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.