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���������ֳ�’s Sector Outlook: Stable
���������ֳ�’ stable outlook for the public power and electric cooperative sector reflects strong sector characteristics and a conservative business model that provide issuers with stability and strength, even during periods of uncertainty. The fundamental strengths of the sector include: autonomous rate-making authority, the essential nature of electric service, mandates to serve well-defined areas with monopolistic characteristics, a relative cost-of-capital advantage over investor-owned utilities and reliable cash flow.

Rating Outlook: Stable
The rating outlook for the sector is stable, and we do not expect many rating changes in the sector next year. Approximately 89% of the public power and cooperative ratings ���������ֳ� assigned maintained a Stable Outlook. Approximately 4% of the ratings maintained a Positive Outlook or Watch and 7% a Negative Outlook or Watch.

Ratings trending negative are dominated by issuers facing risks related to recent or ongoing nuclear construction, including the Municipal Electric Authority of Georgia, Oglethorpe Power Corporation, PowerSouth Energy Cooperative and South Carolina Public Service Authority (Santee Cooper). Positive sentiment is largely driven by declining leverage.

Rating Distribution Weighting: Strong Sectoral Credit Quality
The median rating in the public power and cooperative sector is ‘A+’, reflecting high credit quality. Upgrades significantly outpaced downgrades since 2012, further reflecting the continued favorable operating environment for public power and cooperative utilities, and sectorwide declining leverage.