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The ‘AA’ rating and maintenance of the Stable Outlook reflect ���������ֳ�’ expectation that Lakeland Electric (Lakeland; the system) will maintain its historically stable financial performance amid an expanded capital plan and $154 million of debt issuance. The issuance is intended to fund transmission and distribution projects, as well as the installation of new generating assets slated to come online in late 2024. Lakeland also intends to fund a portion of its capital projects via a series of approved rate increases that will help maintain healthy operating margins in the face of increasing leverage. Based on ���������ֳ�’s scenario analysis, leverage could approach 7.0x in the near term as the system undertakes its capital cycle and completes its projects. However, leverage is likely to moderate thereafter to levels consistent with the rating. The rating further reflects the system’s strong and improving revenue defensibility underpinned by the monopolistic nature of its revenue sources; independent rate-setting authority; and a developing service area exhibiting improving economic indicators, such as median household income (MHI) and unemployment. Lakeland’s very strong operating risk profile is based on its access to a very low-cost energy supply through owned generation, participation in The Florida Municipal Power Pool (FMPP) and contractual arrangements with the Orlando Utilities Commission (OUC; AA).