The ratings on FPL Group Inc. reflect the strength of the regulated cash flows from the integrated electric utility, FP&L. The utility contributes to about three-quarters of the consolidated credit profile and has better business fundamentals than most of its integrated electric peers, with a healthy and growing service territory, sound operations, and a supportive regulatory environment. However, the following factors detract from credit quality: the company's increasing exposure to wholesale energy activities, its willingness to expand through acquisitions and increase its risk profile, the fluctuating cash flows from FPL Energy Inc.'s portfolio of merchant generation, and the utility's significant exposure to natural gas. The short-term rating on FPL is 'A-1'. FPL's available cash flow is not sufficient to fund
