Wall Street Bullish on LIPA’s Finances

LIPA Secures Bond Rating Upgrade In the Midst of Difficult Financial Times

First Bond Upgrade from Fitch in LIPA’s History

Rating Agency Recognizes Kevin Law and the Board of Trustees’ Prudent Fiscal Management, Mature Business Model, Cost Cutting Initiatives and Transparency of its Operations and Financial Position

Uniondale, NY - Today, the Long Island Power Authority received a bond ratings upgrade to ‘A’ with Stable Outlook from Fitch Ratings Service. Fitch cited LIPA’s solid financial performance, mature and stable T&D system, and improved cash flow, liquidity and debt service coverage as key factors contributing to the historic upgrade.

“This is outstanding news for LIPA and its customers, said President and CEO Kevin S. Law. “Particularly in today’s fiscal climate, for LIPA to receive a bond rating upgrade is a testimony to the prudent fiscal oversight of my management team and our Board of Trustees. It always serves as a vote of confidence when the financial markets recognize our fiscal priority of improved liquidity, stable rates and our well developed risk management program.”

“As Chairman of the Board of Trustees, I am extremely pleased with the bond rating upgrade issued by Fitch Rating Service,” said Howard E. Steinberg, Chairman of the Board of Trustees for the Long Island Power Authority. “The upgrade reflects the Board and LIPA’s commitment to solid fiscal management of LIPA’s financial position.”

Fitch’s bond rating upgrade acknowledges LIPA’s sound fiscal polices in the midst of difficult economic times. Highlights from the news release issued by Fitch Ratings Agency includes:

“The upgrade reflects LIPA’s solid financial performance for the past five years and through current economic recession, with improved cash flow, liquidity and debt service coverage-in-line with ‘A’ rated retail electric systems.”
“Since its inception in 1998, LIPA has evolved into a mature, stable, transmission and distribution system. The timely use of the fuel and purchased power cost adjustment mechanism, along with fuel hedging practices, has helped diminish cash flow volatility related to substantial fuel commodity exposure.”
“Over the past five years, LIPA has demonstrated its growth and maturation as a business, implementing strategies including cost cutting initiatives, introduction of efficiency programs, and focus on customer and legislative outreach efforts to increase transparency of its operations and financial position. LIPA’s financial performance has improved and stabilized, with more consistent financial metrics.”

LIPA, a non-profit municipal electric provider, owns the retail electric Transmission and Distribution System on Long Island and provides electric service to more than 1.1 million customers in Nassau and Suffolk counties and the Rockaway Peninsula in Queens. LIPA is the 2nd largest municipal electric utility in the nation in terms of electric revenues, 3rd largest in terms of customers served and the 7th largest in terms of electricity delivered. In 2010, LIPA outperformed all other overhead electric utilities in New York State for frequency of service interruptions, and ranked second for duration of service interruptions. LIPA does not provide natural gas service or own any on-island generating assets. More information about LIPA can be found online at: http://www.lipower.org.

Media Contact Information
Mark Gross
Phone - (516) 719-9892
Media Pager - (516) 229-7248
media.relations@lipower.org

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