Distribution monopolies and very strong market position in electricity and gas supply; Flexible and low-cost generation portfolio; Strong financial profile; Moderate exposure to regulatory pressure; and Low customer churn rates at the retail level. Small utility by Austrian and European comparison; Operates in a 100% liberalized gas and electricity market; and Exposure to volatile hydro level. The ratings on Austria-based utility KELAG AG reflect the company's sound business profile, owing to its strong local position in electricity supply and its natural monopoly on regional electricity distribution in the Austrian State of Carinthia. KELAG also has advantageous pumped-storage hydro-generation assets. These strengths are offset by its small size, its operation in a fully liberalized energy market, and regulatory pressure from the
