Credit quality for FPL Group Inc. is characterized by the activities of its operating utility, Florida Power&Light Co. and its growing portfolio of higher-risk nonregulated investments, mainly in independent power projects. Current ratings for FPL Group and its affiliates incorporate increasing business risk for the consolidated enterprise attributable to the regulatory challenges in Florida, the growing nonregulated independent power producer portfolio, an aggressive financing plan, and declining credit-protection measures. The negative outlook for FPL Group and its affiliates reflects the uncertainty associated with the current regulatory proceedings at Florida Power&Light and the potential subsequent decreased revenues and cash flow. In addition, FPL Group's intention to expand its nonregulated generation business presents challenges in maintaining adequate capitalization
