"We hope they [the rating agencies] will look at it that way." The department is no stranger to difficult circumstances. After the Jan. 17 Northridge earthquake, utility workers had to cope with an estimated $110 million in damages to water and power systems. Through it all, department officials estimate they lost only 1% in revenues. Most of that loss was the result of temporary service interruptions and the destruction of some customers' homes and businesses. These and other factors have contributed to Moody's confidence in the department's finances. Unlike Standard & Poor's, Moody's has maintained a stable reading on the utility's Aa bonds. "You have to look at their total budget, which is in the billions," said Barbara Flickinger, an assistant director and manager of Moody's public finance department in New York. "They've done some recent cost cutting ... and right now, we think the outlook is stable."