The 'A-' rating on Austin, Texas' electric utility system revenue refunding bonds represents a pledge of the net revenues of the electric system and is based on: Progress in the utility's process of accumulating cash reserves to be used for future debt restructuring and preparing to operate in a competitive retail electric market; Diversified generation resource mix with owned assets providing 100% of system needs, limiting exposure to volatile market prices; Competitive electric utility rates for all three customer classes, including the 11 large industrial customers under long-term contract, and no rate increases projected until 2006; Solid debt service coverage (DSC) historically at, or above, 2 times (x) on both senior- and junior-lien combined revenue bonds; and An economic and
