Primary subsidiary VEPCO, a vertically integrated and fully regulated utility, benefits from supportive regulation, a better-than-average service territory, and the focus of management. Decision to largely exit the exploration and production business removed considerable business risk from the organization and shows a commitment to credit quality. Future spending is concentrated on the lower-risk utility side of the enterprise. Good access to capital and bank markets. The higher-risk, unregulated generation portfolio remains sizable and harbors considerable market exposure if not hedged appropriately and consistently. Other unregulated activities contain even more risk, particularly upstream and mid-stream natural gas operations. Risk management around the retail gas and electric business spread over twelve U.S. states presents a challenge. The ratings on diversified energy company
