Public Works Commission

PWC's A+ Bond Rating Affirmed by Standard & Poors
PWC's Residential Electric Rates Rank Lowest in the State

December 13, 2006

Standard & Poor's Rating Service has affirmed PWC's 'A+' revenue bond rating noting the utility has a stable financial outlook because of it's stable and diversifying service territory, competitive rates, good liquidity position and its power supply contract with Progress Energy.

The Report cited PWC's competitive position with the lowest residential electric rates in the state as a factor in the rating. Standard & Poor's said Fayetteville's average electric rate is slightly below average compared with state averages provide by the Energy Information Agency. Water and sewer rates were also listed as being competitive with rates in neighboring communities.

The report also notes that the terms of PWC's power supply contract with Progress Energy are more favorable than those of the prior contract, and has enabled more system flexibility in terms of using PWC's Butler-Warner Generation Plant.

"The Board is extremely pleased with the Standard & Poor's Report," said PWC Chairman Luis Olivera. "It is our responsibility to our rate payers to operate efficiently and insure they are getting the best value for their rate dollar. This report demonstrates that we are meeting our responsibility by achieving our goal to have the lowest responsible rates and to be the most financially sound utility in North Carolina."

PWC was assigned a "3" on the business profile. Business profiles are assigned on a 10-point scale with "1" being the strongest." Much of the debt issued by governmental entities, such as PWC, is rated by private, independent bond rating companies. The bond ratings reflect the degree of risk associated with the bonds and typically these bonds are issued at lower interest rates.