The ratings on the Dutch energy distribution group, Eneco Holding N.V. and its subsidiary ENECO N.V. (collectively ENECO Energie), reflect its stable operating cash flows from its monopoly energy distribution businesses and conservative financial policy. These strengths are offset, however, 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 1.8 million energy 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. Recent regulatory resets should continue to support ENECO Energie's distribution business through to 2007 and provide a reliable source of
