On July 27, 2006, Standard&Poor's Ratings Services affirmed its 'A+' long-term corporate credit rating on Austria-based utility KELAG AG (KELAG). The outlook is stable. The ratings 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 new incentive-based regime for setting network tariffs. Current financial cover ratios are not in line with the rating, but we expect substantial improvement over the next few years. Carinthia controls 51% of Kärnten Energieholding Beteiligungs
