Distribution monopolies and strong market position Flexible and low-cost generation portfolio Modest financial risk profile Moderate exposure to regulatory pressure Increasing electricity supply competition Exposure to volatile hydro-levels Short in generation Increasing exposure to energy trading Likely pressure on financial risk profile due to large-scale investment plan The ratings on Austria-based utility KELAG AG reflect the company's satisfactory business risk profile, owing to its favorable low-cost hydro-based generation facilities; natural monopoly on regulated regional electricity, heat and gas distribution; dominant position in electricity supply in the Austrian State of Carinthia; and modest financial risk profile. These strengths are offset by the fully liberalized energy market, the company's relatively small size, short-term maturity profile, exposure to volatile electricity prices, and its
