The ratings on the Dutch energy distribution group, Eneco Holding N.V. and its subsidiary ENECO N.V. (collectively ENECO Energie), reflect its strong cash flows from its monopoly energy distribution businesses, prudent energy trading activities, and conservative financial policy. These strengths are offset by increasing competitive pressures and the potential exposure of cash flow to volatile wholesale electricity prices. ENECO Energie is the third-largest distribution company in the Netherlands (AAA/Stable/A-1+), with more than 1.3 million gas and electricity customers. The majority of the company's turnover derives from electricity and gas sales, but the bulk of its operating profit stems from its monopoly distribution network businesses. Despite the regulator's harsh efficiency targets, ENECO Energie's distribution operations should provide a reliable source of
