AES Eastern Energy's Bankruptcy Confirms Muted Outlook For US Power Sector

CFW View: News that AES Eastern Energy , a subsidiary of AES Corporation , filed for chapter 11 bankruptcy protection on January 3 2012 corroborates our view that macroeconomic headwinds are taking a toll on the US electricity sector, limiting consumption and weighing on power prices. We also note that AES Eastern Energy's difficulties were compounded by its failure to sell its coal-fired assets - a situation that reinforces our long-held view that coal has, and will remain, largely out of favour as a fuel source for US investments.

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