NEW YORK Jan. 25, 2005

Standard & Poor's Ratings Services anticipates another year of credit stability for U.S. public power firms, despite continuing turmoil generally in the overall power sector, according to a report published today titled "U.S. Public Power Outlook: Continued Credit Stability."

"Public power entities nationwide continue to adapt operationally and financially to new challenges," writes credit analyst Peter V. Murphy.

The public power sector includes municipally owned electric utilities, combined utilities that provide retail water, sewer or gas service along with electric service, as well as wholesalers such as joint action agencies consisting of two or more participating utilities that have joined together to achieve economies of scale in developing capital resources and other mutually beneficial services.

The report notes that public power utilities have more freedom to set rates than do investor-owned utilities. Given the sharp rise in fuel prices in the past year, this flexibility partly explains why public power enjoys a credit climate different from that of the investor-owned sector. The median rating in the investor-owned sector is in the mid-'BBB' category. For public power entities, it is 'A'.