----8/11/2009----

LINCOLN - Two Wall Street bond rating agencies have again affirmed high ratings of Lincoln Electric System (LES) revenue bonds, said Keith Brown, LES chief financial officer.

The 'AA' ratings from Fitch Ratings, Ltd. and Standard & Poor's Corp. (S&P) are held by only a few electric utilities in the nation, he said. The higher bond rating means LES pays a lower interest rate for debt, which can save customers millions of dollars.

Fitch and S&P also assigned their highest ratings to LES' short-term commercial paper program. Both agencies stated their outlook on LES' long-term rating continues to be stable, Brown said.

Fitch complimented LES for its history of implementing timely rate increases when necessary, its low cost of power, and rates that are among the lowest in the nation. Fitch also praised the financial operations of LES with good debt service coverage and liquidity levels to earn the rating.

In giving LES a stable outlook, S&P stated the utility has good financial management and "our expectation that management will continue to react to rising costs with rate changes and prudent use of rainy-day reserves."

In addition, Fitch said LES benefits from a strong management team and stable customer base, with little customer concentration. They noted LES has faced increased operating costs and reduced energy sales due to mild weather, but rate increases helped to improve financial performance. "The stable outlook reflects Fitch's expectation that going forward, the financial position will remain in line with other 'AA' rated systems, while maintaining competitive rates," stated a Fitch news release.

Pointing to LES' low rates, S&P said they are the result of energy from Laramie River Station, near Wheatland, Wyo., and Gerald Gentleman Station near Sutherland, Neb., which have consistently ranked among the five lowest-cost, coal-fired plants in the country, Brown said.

S&P also called LES' natural gas hedging program sound, which should mitigate some risk in that market.