Fitch: U.S. Utilities ‘Sticking to Their Knitting’

New York, NY, Nov. 21, 2005 — Fitch Ratings believes the regulatory response to high and rising commodity and other cost pressures will be a key determinant of credit quality for U.S. utilities in 2006.

While industry challenges appear to be mounting, Fitch noted that the majority of the management teams appear to be ‘sticking to their knitting,’ and remain focused on the various threats to and opportunities for their core businesses, avoiding over-reaching strategies that provide unrealistic growth to equity investors.

Fitch’s Edison Electric Institute (EEI) 2005 Wrap-Up report ‘Sticking to Its Knitting,’ summarizes pertinent issues discussed by various presenters and other participants at EEI’s recently concluded 40th Financial Conference. The report summarizes Fitch’s view of the items that were of greatest importance to attendees at the conference and touches on topics discussed at Fitch Ratings’ 17th Annual Global Power Breakfast.

The report covered many topics including:

* The proliferation of rate cases for utilities.

* The Illinois power procurement dispute.

* The outlook for Entergy New Orleans.

* The challenges of new environmental and carbon regulations.

* The industry’s sustainable growth rate and infrastructure investment.

Companies mentioned in the report include: Allegheny Energy Inc., Ameren Corp., American Electric Power Co., CMS Energy (Consumers Energy Co.), DPL Inc., Edison International (Edison Mission Energy, Southern California Edison), Entergy Corp., FirstEnergy Corp., FPL Group (Florida Power & Light), Northeast Utilities, Pinnacle West Capital (Arizona Public Service Co., Progress Energy, Sierra Pacific Resources, Inc., TXU Corp., and Westar Energy.

Fitch’s full EEI wrap-up report ‘Sticking to Its Knitting,’ as well as a PDF copy of Fitch’s presentation at EEI, can be found at www.fitchratings.com under the header Corporate Finance then Global Power.

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