On July 21, 2005, 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 KELAG's low business risk, owing to its strong position in electricity supply and its monopoly on regional electricity distribution in the Austrian State of Carinthia (AA/Stable/A-1+). KELAG also has advantageous pumped-storage hydro-generation assets and a robust and further improving financial profile. These strengths are offset by KELAG's small size, its operation in a fully liberalized energy market, and further regulatory pressure from the recently announced new incentive-based regime for setting network tariffs. The State of Carinthia controls 51% of Kärnten Energieholding Beteiligungs GmbH (KEH), which in turn holds a 63.85% interest
