Income Statement Q FINANCIAL UPDATE QUARTERLY REPORT OF THE U.S. SHAREHOLDER-OWNED ELECTRIC UTILITY INDUSTRY

Transcription

1 Income Statement Q FINANCIAL UPDATE QUARTERLY REPORT OF THE U.S. SHAREHOLDER-OWNED ELECTRIC UTILITY INDUSTRY

2 About EEI The Edison Electric Institute is the association of U.S. shareholderowned electric companies. Our members serve 95% of the ultimate customers in the shareholder-owned segment of the industry, and represent approximately 70% of the U.S. electric power industry. We also have as Affiliate members more than 65 International electric companies, and as Associate members more than 170 industry suppliers and related organizations. About EEI s Quarterly Financial Updates EEI s quarterly financial updates present industry trend analyses and financial data covering 70 U.S. shareholder-owned electric utility companies. These 70 companies include 65 electric utility holding companies whose stocks are traded on major U.S. stock exchanges and 5 electric utilities who are subsidiaries of non-utility or foreign companies. Q financial updates will be published for the following topics. Additional topics are in development. Dividends Stock Performance Credit Ratings Construction Rate Case Summary Income Statement Balance Sheet Cash Flow Statement Business Segmentation For EEI Member Companies The EEI Finance and Accounting Division is developing current year and historical data sets that cover a wide range of industry financial and operating metrics. We look forward to serving as a resource for member companies who wish to produce customized industry financial data and trend analyses for use in: Investor relations studies and presentations Internal company presentations Performance benchmarking Peer group analyses Annual and quarterly reports to shareholders We Welcome Your Feedback EEI is interested in ensuring that our financial publications and industry data sets best address the needs of member companies and the financial community. We welcome your comments, suggestions and inquiries. Contacts: Mark Agnew Manager, Financial Analysis (202) , magnew@eei.org Future EEI Finance Meetings 42nd EEI Financial Conference November 4-7, 2007 Walt Disney World Dolphin Lake Buena Vista, Florida EEI International Financial Conference March 9-12, 2008 London Hilton on Park Lane London, United Kingdom EEI Annual Finance Committee Meeting May 21, 2008 Waldorf-Astoria New York, New York 43rd EEI Financial Conference November 2-5, 2008 Marriott Desert Ridge Phoenix, Arizona For more information about EEI Finance Meetings, please contact Debra Henry, (202) , dhenry@eei.org Edison Electric Institute 701 Pennsylvania Avenue, N.W. Washington, D.C

3 The 70 U.S. Shareholder-Owned Electric Utilities Allegheny Energy, Inc. (AYE) ALLETE, Inc. (ALE) Alliant Energy Corporation (LNT) Ameren Corporation (AEE) American Electric Power Company, Inc. (AEP) Aquila, Inc. (ILA) Avista Corporation (AVA) Black Hills Corporation (BKH) CenterPoint Energy, Inc. (CNP) Central Vermont Public Service Corporation (CV) CH Energy Group, Inc. (CHG) Cleco Corporation (CNL) CMS Energy Corporation (CMS) Consolidated Edison, Inc. (ED) Constellation Energy Group, Inc. (CEG) Dominion Resources, Inc. (D) DPL, Inc. (DPL) DTE Energy Company (DTE) Duke Energy Corporation (DUK) Duquesne Light Holdings, Inc. (DQE) Edison International (EIX) El Paso Electric Company (EE) Empire District Electric Company (EDE) Energy East Corporation (EAS) Entergy Corporation (ETR) Exelon Corporation (EXC) FirstEnergy Corp. (FE) FPL Group, Inc. (FPL) Great Plains Energy Incorporated (GXP) Green Mountain Power Corporation (GMP) Hawaiian Electric Industries, Inc. (HE) IDACORP, Inc. (IDA) Ipalco Enterprises, Inc. Integrys Energy Group, Inc. (TEG) Kentucky Utilities ** KeySpan Corporation (KSE) Louisville Gas and Electric ** Maine & Maritimes Corporation (MAM) MDU Resources Group, Inc. (MDU) MGE Energy, Inc. (MGEE) MidAmerican Energy Company Niagra Mohawk Power Corporation NiSource Inc. (NI) Northeast Utilities (NU) NorthWestern Corporation (NWEC) NSTAR (NST) OGE Energy Corp. (OGE) Otter Tail Corporation (OTTR) Pepco Holdings, Inc. (POM) PG&E Corporation (PCG) Pinnacle West Capital Corporation (PNW) PNM Resources, Inc. (PNM) Portland General Electric Company (POR)* PPL Corporation (PPL) Progress Energy (PGN) Public Service Enterprise Group Inc. (PEG) Puget Energy, Inc. (PSD) SCANA Corporation (SCG) Sempra Energy (SRE) Sierra Pacific Resources (SRP) Southern Company (SO) TECO Energy, Inc. (TE) TXU Corp. (TXU) UIL Holdings Corporation (UIL) UniSource Energy Corporation (UNS) Unitil Corporation (UTL) Vectren Corporation (VVC) Westar Energy, Inc. (WR) Wisconsin Energy Corporation (WEC) Xcel Energy, Inc. (XEL) Note: Includes the 65 shareholder-owned electric utility holding companies plus an additional 5 electric utilities (shown in italics) that are not listed on U.S. stock exchanges for one of the following reasons i. they are a subsidiary of an independent power producer, ii. they are a subsidiary of a foreign-owned company, or iii. they were acquired by an investment firm. Stock symbols are shown in parentheses. *Portland General transitioned from private ownership to become a publicly traded company on April 3, The EEI Index includes Portland General beginning on January 1, **Kentucky Utilities and Louisville Gas and Electric, both subsidiaries of E.ON AG, were added to the EEI coverage universe effective January 1, EEI s historical industry financial data now includes their results.

4 Companies Listed by Category (as of 12/31/06) iven the diversity of utility holding company corporate G strategies, no single company categorization approach will be useful for all EEI members and utility industry analysts. Never-theless, we believe the following classification provides an informative framework for tracking financial trends and the capital markets response to business strategies as companies depart from the traditional regulated utility model. Regulated Mostly Regulated Diversified 80%+ of total assets are regulated 50% to 80% of total assets are regulated Less than 50% of total assets are regulated Categorization of the 65 publicly traded utility holding companies is based on year-end business segmentation data presented in 10Ks, supplemented by discussions with company IR departments. Categorization of the 5 non-publicly traded companies (shown in italics) is based on estimates derived from FERC Form 1 data and information provided by parent company IR departments. The EEI Finance and Accounting Division continues to evaluate our approach to company categorization and business segmentation. In addition, we can produce customized categorization and peer group analyses in response to member company requests. We welcome comments, suggestions and feedback from EEI member companies and the financial community. Regulated (42 of 70) Alliant Energy Corporation Ameren Corporation American Electric Power Company, Inc. Aquila, Inc. Central Vermont Public Service Corporation CH Energy Group, Inc. Cleco Corporation CMS Energy Corporation Consolidated Edison, Inc. DPL, Inc. Duquesne Light Holdings, Inc. El Paso Electric Company Empire District Electric Company Energy East Corporation Entergy Corporation Great Plains Energy Incorporated Green Mountain Power Corporation IDACORP, Inc. IPALCO Enterprises, Inc. Kentucky Utilities KeySpan Corporation Louisville Gas and Electric Maine & Maritimes Corporation MGE Energy, Inc. Niagara Mohawk Power Corporation Northeast Utilities NorthWestern Corporation NSTAR PG&E Corporation Pinnacle West Capital Corporation Portland General Electric Company Progress Energy Puget Energy, Inc. Sierra Pacific Resources Southern Company UIL Holdings Corporation UniSource Energy Corporation Unitil Corporation Vectren Corporation Westar Energy, Inc. Wisconsin Energy Corporation Xcel Energy, Inc. Mostly Regulated (19 of 70) ALLETE, Inc. Avista Corporation CenterPoint Energy, Inc. DTE Energy Company Edison International Exelon Corporation First Energy Corp. FPL Group, Inc. MidAmerican Energy Holdings NiSource Inc. OGE Energy Corp. Otter Tail Corporation Pepco Holdings, Inc. PNM Resources, Inc. PPL Corporation Public Service Enterprise Group, Inc. SCANA Corporation TECO Energy, Inc. WPS Resources Corporation * Diversified (9 of 70) Allegheny Energy, Inc. Black Hills Corporation Constellation Energy Group, Inc. Dominion Resources, Inc. Duke Energy Corporation Hawaiian Electric Industries, Inc. MDU Resources Group, Inc. Sempra Energy TXU Corp. Note: Based on assets at 12/31/06 * Changed name to Integrys Energy Group, Inc. effective February 21, 2007

5 Q Income Statement COMMENTARY HIGHLIGHTS Total U.S. electric output rose by 45,764 gigawatthours (GWh), or 4.8%, in Q versus Q due primarily to significantly colder weather vs. last year. The industry s total revenue declined by $236 million, or 0.2%, in the first quarter of The drop was likely a partial result of the impact of somewhat lower spot gas prices in Q versus the year-ago period, rather than energy demand, which appears to have risen based on the colder weather and the rise in electric output. Although the industry s operations and maintenance (O&M) expenses fell by $33 million, or 0.2%, in Q1, 47 companies (72% of the industry) showed an increase. Of this group, 21 companies (32% of the industry) incurred a double-digit percentage increase. We now also compile consolidated financial statements for purely regulated electric utilities from FERC Form 1 and Form 3-Q filings. These can be downloaded in Excel file format at our website ( Electric Output Up 4.8% from Q As shown in Table I, total electric output in the U.S. rose by 45,764 gigawatt-hours (GWh), or 4.8%, in Q versus Q due primarily to significantly colder weather across most of the U.S. As shown in Table II, the number of heating degree days for the country as a whole rose by 9% versus last year, but was 3% lower than the historical average. All nine U.S. regions saw gains in electric output during Q1, led by the South Central (+9.0%), Pacific Northwest (+5.1%), and Central Industrial (+5.1%) regions. When compared to the regions with the largest increase in heating 1 I. U.S. Electric Output (GWh) 3-month period ending 3/31 Region Q Q % Change New England 34,296 33, % Mid-Atlantic 113, , % Central Industrial 183, , % West Central 86,184 83, % Southeast 267, , % South Central 137, , % Rocky Mountain 60,515 57, % Pacific Northwest 43,973 41, % Pacific Southwest 70,476 69, % Total United States 998, , % Note: Represents all power placed on grid for distribution to end customers; does not include Alaska or Hawaii. Source: EEI Business Information Group II. U.S. Weather 3-month period ending 3/31 Dev from % Total Norm Change Dev from Last Year % Change Cooling Degree Days New England Mid-Atlantic East North Central % 3 - West North Central % 4 - South Atlantic % 20 22% East South Central % % West South Central % -2-2% Mountain % % Pacific % 2 - United States % 7 23% Heating Degree Days New England 3, % % Mid-Atlantic 2, % % East North Central 3, % % West North Central 3, % % South Atlantic 1, % 64 5% East South Central 1, % 92 6% West South Central 1, % % Mountain 2, % 39 2% Pacific 1, % % United States 2, % 186 9% Source: National Oceanic and Atmospheric Administration

6 2 INCOME STATEMENT III. EEI U.S. Electric Output Regions Regions Associated with Chart I on page 1 IV. Quarterly Net Operating Income $ Billions Source: EEI Business Information Group 2003 Q Q Q Q Q Q Q Q Q1 Source: SNL Financial and EEI Finance Department degree days (West South Central, +27%; East North Central, +14%; Mid-Atlantic, +14%), a correlation is noticeable. The electric output data is compiled by the Edison Electric Institute (EEI) on a weekly basis and represents all electricity placed on the grid in the contiguous 48 states by shareholderowned electric utilities, rural electric cooperatives, government power projects and independent power producers. In addition to weather, there were several other drivers that affected electricity-related revenue. On the positive side: i) the impact of rate relief over the past year, ii) higher competitive generation margins as lower-priced hedges rolled off, iii) rate base growth for regulated companies expanding/ upgrading systems, and iv) continued underlying customer demand growth. Higher fuel and purchased power costs for some companies were offsetting forces on the expense side. Industry Revenue Falls 0.2% As shown in Table VII, the industry s total revenue declined by $236 million, or 0.2%, in the first quarter of Mid- American Energy, benefiting from a completed merger in 2006, led all companies in terms of increased revenues in dollar terms, followed by Exelon and Integrys. Mid- American s purchase of PacifiCorp in March 2006, a merger that was likely facilitated by the PUHCA repeal provision of EPACT 2005, resulted in a $1.2 billion or 56.9% increase in revenue, the industry s largest percentage increase. Exelon grew its revenues by $968 million, or 25.1%, over the past year, which was the industry s fourth highest in percentage terms. Approximately half of Exelon s revenue increase came from its Generation division. Exelon cited the following as reasons for the increase: higher average margins primarily due to the end of the below-market purchased power agreement (PPA) with ComEd at year-end 2006, higher nuclear output reflecting fewer outage days, the contractual increase in the prices associated with Generation s PPA with PECO, and a PJM billing settlement with PPL. Integrys Energy was formed on February 21, 2007 with the merger of WPS Resources and Peoples Energy. With the merger, Integrys (formerly WPS Resources) increased its revenues by $709 million, or 34.8%, the third highest in percentage terms (Empire District was 2 nd at 43.2%). The primary driver of this combination is the creation of a diversified regulated utility better positioned than each company alone to compete in a consolidating industry where size and scale matter. Greater Impact from Gas Delivery in Q1 The industry s overall drop in revenues must be put in context, especially during the first quarter. Natural gas delivery revenues are highest during Q1, and, for the consolidated income statement, are aggregated together with all other revenue sources. Gas cost, the cost associated with natural gas delivery, is broken out as a separate line item. Natural gas spot prices were somewhat lower in Q than in the year-ago period, and consolidated gas cost declined by 4.9% from last year, from $18.8 billion in Q to $17.9 billion in Q This suggests that the drop in industry revenue was likely a partial result of the impact of gas prices rather than energy demand, which appears to have risen based on the colder weather and the rise in electric output. Although gas distribution activities contribute a smaller portion of the industry s overall revenue and earnings than do electric operations, they help balance the annual earnings stream for combined gas/electric distribution companies due to the fact that residential gas demand peaks in the colder months. Natural gas distribution produces little impact on third quarter results, the industry s biggest income producer, due to the minimal heating needs during the summer.

7 INCOME STATEMENT 3 $ Billions Q Q3 6.1 V. Quarterly Interest Expense Q Q Q Q3 Source: SNL Financial and EEI Finance Department 2006 Q Q Q1 Generation Cost on Par with Revenue Rise Total electric generation cost rose by $53 million, or 0.2%, in 2007, to $34.1 billion, in line with the revenue decline. In 2006, total electric generation cost rose by $7.9 billion, or 6.3%, nearly three times the rate that revenue increased. Twenty-two out of the 30 (73%) Regulated companies posted a higher cost of generation in 2006 compared to 13 of the 19 (68%) Mostly Regulated companies and 7 of the 10 (70%) Diversified companies. Operations and Maintenance (O&M) Although the industry s operations and maintenance (O&M) expenses fell by 33 million, or 0.2%, in Q1, 47 companies (72% of the industry) showed an increase. Of this group, 21 companies (32% of the industry) incurred a double-digit percentage increase. It should be noted that the consolidated industry O&M figures include not only the electric but also the natural gas and other operating segments, and are influenced by plant and business divestitures. As a result, they do not give an entirely accurate picture of the cost pressures impacting O&M for electric generation, transmission and delivery subsidiaries. Because of this, we now also compile consolidated financial statements for purely regulated electric utilities from FERC Form 1 and Form 3-Q filings. These can be downloaded in Excel file format at our website ( Interest Expense Down 1.9% Interest expense decreased by 1.9%, to $5.2 billion in Q from $5.3 billion in Q1 2006, although 52% of companies showed an increase. This comes off a 3.6% increase in interest expense in 2006, following a relative decline the previous three years. This decline resulted from the substantial $ Millions VI. Non-Recurring and Extraordinary Items Q Q1 2006r Gain on Sale of Assets Other Nonrecurring Revenue 35 (55) Total Non-Recurring Revenue Asset Write-downs Other Non-Recurring Expenses Total Non-Recurring Expenses 1, Discontinued Operations (120) 76 Change in Accounting Principles - 5 Early Retirement of Debt - - Other Extraordinary Items - - Total Extraordinary Items (120) 81 Net Gain (Loss) from Non-Recurring and Extraordinary Items Source: SNL Financial and EEI Finance Department / r = revised (1,016) (67) debt reduction that companies implemented beginning in 2003, as well as the historically low short- and long-term interest rates during the period. As shown in Chart V, the industry s interest expense steadily declined from $6.1 billion in Q to $5.2 billion in Q4 2005, a 15.4% decrease. Going forward, the potential for rising interest rates and higher borrowing costs presents a challenge to the industry, given the current rising capital expenditures for environmental compliance and transmission and distribution upgrades, and the developing need to finance a new round of baseload generation in many power markets to ensure adequate reserve margins over the long term. Non-Recurring and Extraordinary Activity As shown in Table VI, the impact from non-recurring and extraordinary activity rose from a $67 million net loss in Q to a $1.0 billion net loss in Q TXU accounted for most this change, as its non-recurring expenses increased by $742 million in Q The charges relate to TXU s coal plant cancellations and the affect of unrealized mark-tomarket valuations associated with the company s long-term hedging program. Strong Earnings Growth from Regulated Businesses The industry s net income fell by $302 million, or 4.1%, in the first quarter of However, the Regulated group of companies increased net income by $820 million, or 38.5%, along with a $93 million, or 3.0%, increase by the Mostly Regulated companies. This was offset by a $1.2 billion decrease in net income from the Diversified companies, falling

8 4 INCOME STATEMENT VII. Consolidated Income Statement ($ Millions) Q Q1 2006r % change Energy Operating Revenue 105, , Energy Operating Expenses Total Electric Generation Cost 34,095 34, Gas Cost 17,923 18, Total Energy Operating Expenses 52,018 52, Revenue less energy operating expenses 53,836 53, Other Operating Expenses: Operations & maintenance 21,390 21, Depreciation & Amortization 8,314 8, Taxes (not income) - Total 4,076 4, Other Operating Expenses 4,337 4, Total Operating Expenses 90,135 90, Operating Income 15,720 15, Other Recurring Revenue: Partnership Income Allowance for Equity Funds Used for Construction Other Revenue Total Other Recurring Revenue 1,288 1, Non-Recurring Revenue: Gain on Sale of Assets Other Nonrecurring Revenue 35 (55) NM Total Non-Recurring Revenue Interest expense 5,174 5, Other expenses Asset Write-downs Other Non-Recurring Expenses Total Non-Recurring Expenses 1, Net Income Before Taxes 10,798 10, Provision for Taxes 3,508 3, Dividends on Preferred Stock of Subsidiary Other Minority Interest Expense (27) (102) Minority Interest Expense 38 (45) NM Trust Preferred Security Payments - - Other After-tax Items (2) (3) Total Minority Interest and Other After-tax Items 36 (48) NM Net Income Before Extraordinary Items 7,253 7, Discontinued Operations (120) 76 NM Change in Accounting Principles - 5 NM Early Retirement of Debt Other Extraordinary Items Total Extraordinary Items (120) 81 NM Preferred Dividends Declared Other Preferred Dividends after Net Income Other Changes to Net Income (8) (5) 60.0 Net Income 7,118 7, Common Dividends 4,249 4, VIII. Category: Regulated ($ Millions) Q Q1 2006r % change Energy Operating Revenue 45,346 35, Energy Operating Expenses Total Electric Generation Cost 15,067 11, Gas Cost 8,336 7, Total Energy Operating Expenses 23,433 18, Revenue less energy operating expenses 21,913 16, Other Operating Expenses: Operations & maintenance 8,847 6, Depreciation & Amortization 3,735 2, Taxes (not income) - Total 1,970 1, Other Operating Expenses Total Operating Expenses 38,773 30, Operating Income 6,574 4, Other Recurring Revenue: Partnership Income 70 (6) NM Allowance for Equity Funds Used for Construction Other Revenue Total Other Recurring Revenue Non-Recurring Revenue: Gain on Sale of Assets Other Nonrecurring Revenue Total Non-Recurring Revenue Interest expense 2,198 1, Other expenses Asset Write-downs Other Non-Recurring Expenses Total Non-Recurring Expenses Net Income Before Taxes 4,643 3, Provision for Taxes 1,518 1, Dividends on Preferred Stock of Subsidiary Other Minority Interest Expense Minority Interest Expense Trust Preferred Security Payments - - Other After-tax Items (2) (3) Total Minority Interest and Other After-tax Items Net Income Before Extraordinary Items 3,081 2, Discontinued Operations (118) 13 NM Change in Accounting Principles Early Retirement of Debt Other Extraordinary Items Total Extraordinary Items (118) 19 NM Preferred Dividends Declared Other Preferred Dividends after Net Income - 1 NM Other Changes to Net Income (8) (5) 60.0 Net Income 2,949 2, Common Dividends 1,823 1, Source: SNL Financial and EEI Finance Department / r = revised NM = Not meaningful / Dollar amounts and percentages may reflect rounding.

9 INCOME STATEMENT 5 IX. Category: Mostly Regulated ($ Millions) Q Q1 2006r % change Energy Operating Revenue 40,605 46, Energy Operating Expenses Total Electric Generation Cost 12,025 16, Gas Cost 6,654 7, Total Energy Operating Expenses 18,679 23, Revenue less energy operating expenses 21,926 22, Other Operating Expenses: Operations & maintenance 8,586 10, Depreciation & Amortization 3,045 3, Taxes (not income) - Total 1,366 1, Other Operating Expenses 2, Total Operating Expenses 34,180 39, Operating Income 6,425 6, Other Recurring Revenue: Partnership Income Allowance for Equity Funds Used for Construction Other Revenue Total Other Recurring Revenue Non-Recurring Revenue: Gain on Sale of Assets Other Nonrecurring Revenue 9 (59) NM Total Non-Recurring Revenue Interest expense 2,106 2, Other expenses Asset Write-downs Other Non-Recurring Expenses Total Non-Recurring Expenses Net Income Before Taxes 4,800 4, Provision for Taxes 1,601 1, Dividends on Preferred Stock of Subsidiary Other Minority Interest Expense (49) (129) Minority Interest Expense (25) (106) Trust Preferred Security Payments - Other After-tax Items - - Total Minority Interest and Other After-tax Items (25) (106) Net Income Before Extraordinary Items 3,225 3, Discontinued Operations Change in Accounting Principles - (1) - Early Retirement of Debt Other Extraordinary Items Total Extraordinary Items Preferred Dividends Declared Other Preferred Dividends after Net Income Other Changes to Net Income Net Income 3,237 3, Common Dividends 1,496 1, X. Category: Diversified ($ Millions) Q Q1 2006r % change Energy Operating Revenue 19,903 24, Energy Operating Expenses Total Electric Generation Cost 7,004 6, Gas Cost 2,902 3, Total Energy Operating Expenses 9,906 10, Revenue less energy operating expenses 9,997 13, Other Operating Expenses: Operations & maintenance 3,957 4, Depreciation & Amortization 1,533 1, Taxes (not income) - Total Other Operating Expenses 1,046 2, Total Operating Expenses 17,182 20, Operating Income 2,721 3, Other Recurring Revenue: Partnership Income Allowance for Equity Funds Used for Construction Other Revenue Total Other Recurring Revenue Non-Recurring Revenue: Gain on Sale of Assets Other Nonrecurring Revenue Total Non-Recurring Revenue Interest expense 870 1, Other expenses Asset Write-downs 30 2 NM Other Non-Recurring Expenses NM Total Non-Recurring Expenses NM Net Income Before Taxes 1,355 3, Provision for Taxes 389 1, Dividends on Preferred Stock of Subsidiary Other Minority Interest Expense Minority Interest Expense Trust Preferred Security Payments Other After-tax Items Total Minority Interest and Other After-tax Items Net Income Before Extraordinary Items 948 2, Discontinued Operations (15) (40) Change in Accounting Principles Early Retirement of Debt Other Extraordinary Items - (40) - Total Extraordinary Items (15) (40) Preferred Dividends Declared Other Preferred Dividends after Net Income Other Changes to Net Income Net Income 932 2, Common Dividends Source: SNL Financial and EEI Finance Department / r = revised NM = Not meaningful / Dollar amounts and percentages may reflect rounding.

10 6 INCOME STATEMENT from $2.2 billion in Q to $932 million in Q Much of these moves, however, related to company migration between categories, not to any comparable volatility in the performance of particular business models. Category Comparison Tables VIII, IX and X show the consolidated income statements for the Regulated, Mostly Regulated and Diversified company categories in order to present a more precise picture of industry financial performance. The page titled Companies Listed by Category at the front of this report gives category definitions and the list of companies by category at December 31, The Appendix pages show the lists at year-end 2004 and The Q category results are based on December 31, 2006 data, while the 2006 results are based on categorization at December 31, Category results are impacted both by individual company performance and by the shifting of companies between categories.

11 APPENDIX-1 Companies Listed by Category (as of 12/31/05) iven the diversity of utility holding company corporate G strategies, no single company categorization approach will be useful for all EEI members and utility industry analysts. Never-theless, we believe the following classification provides an informative framework for tracking financial trends and the capital markets response to business strategies as companies depart from the traditional regulated utility model. Regulated Mostly Regulated Diversified 80%+ of total assets are regulated 50% to 80% of total assets are regulated Less than 50% of total assets are regulated Categorization of the 65 publicly traded utility holding companies is based on year-end business segmentation data presented in 10Ks. Categorization of the 5 non-publicly traded companies (shown in italics) is based on estimates derived from FERC Form 1 data and information provided by parent company IR departments. The EEI Finance and Accounting Division continues to evaluate our approach to company categorization and business segmentation. In addition, we can produce customized categorization and peer group analyses in response to member company requests. We welcome comments, suggestions and feedback from EEI member companies and the financial community. Regulated (36 of 70) Alliant Energy Corporation Ameren Corporation Central Vermont Public Service Corporation CH Energy Group, Inc. Cleco Corporation Consolidated Edison, Inc. DPL, Inc. Duquesne Light Holdings, Inc. El Paso Electric Company Empire District Electric Company Energy East Corporation Great Plains Energy Incorporated Green Mountain Power Corporation IDACORP, Inc. IPALCO Enterprises, Inc. Kentucky Utilities KeySpan Corporation Louisville Gas and Electric Maine & Maritimes Corporation Niagara Mohawk Power Corporation NorthWestern Corporation NSTAR PG&E Corporation Pinnacle West Capital Corporation Portland General Electric Company Progress Energy Puget Energy, Inc. SCANA Corporation Sierra Pacific Resources Southern Company UIL Holdings Corporation UniSource Energy Corporation Unitil Corporation Westar Energy, Inc. Wisconsin Energy Corporation Xcel Energy, Inc. Mostly Regulated (23 of 70) ALLETE, Inc. American Electric Power Company, Inc. Aquila, Inc. Avista Corporation CenterPoint Energy, Inc. CMS Energy Corporation DTE Energy Company Edison International Entergy Corporation Exelon Corporation First Energy Corp. FPL Group, Inc. MGE Energy, Inc. MidAmerican Energy Holdings NiSource Inc. Northeast Utilities Otter Tail Corporation Pepco Holdings, Inc. PNM Resources, Inc. PPL Corporation Public Service Enterprise Group, Inc. TECO Energy, Inc. Vectren Corporation Diversified (11 of 70) Allegheny Energy, Inc. Black Hills Corporation Constellation Energy Group, Inc. Duke Energy Corporation Dominion Resources, Inc. Hawaiian Electric Industries, Inc. MDU Resources Group, Inc. OGE Energy Corp. Sempra Energy TXU Corp. WPS Resources Corporation Note: Based on assets at 12/31/05

12 APPENDIX-2 Companies Listed by Category (as of 12/31/04) iven the diversity of utility holding company corporate G strategies, no single company categorization approach will be useful for all EEI members and utility industry analysts. Never-theless, we believe the following classification provides an informative framework for tracking financial trends and the capital markets response to business strategies as companies depart from the traditional regulated utility model. Regulated Mostly Regulated Diversified 80%+ of total assets are regulated 50% to 80% of total assets are regulated Less than 50% of total assets are regulated Categorization of the 65 publicly traded utility holding companies is based on year-end business segmentation data presented in 10Ks. Categorization of the 8 non-publicly-traded companies (shown in italics) is based on estimates derived from FERC Form 1 data and information provided by parent company IR departments. The EEI Finance and Accounting Division continues to evaluate our approach to company categorization and business segmentation. In addition, we can produce customized categorization and peer group analyses in response to member company requests. We welcome comments, suggestions and feedback from EEI member companies and the financial community. Regulated (37 of 73) Ameren Corporation Central Vermont Public Service Corporation Consolidated Edison, Inc. DPL, Inc. Duquesne Light Holdings, Inc. El Paso Electric Company Empire District Electric Company Energy East Corporation FirstEnergy Corp. Great Plains Energy Incorporated Green Mountain Power Corporation IDACORP, Inc. IPALCO Enterprises, Inc. Kentucky Utilities KeySpan Corporation Louisville Gas and Electric Maine & Maritimes Corporation New England Power Company Niagara Mohawk Power Corporation NorthWestern Corporation NSTAR PacifiCorp PG&E Corporation Pinnacle West Capital Corporation Portland General Electric Company Progress Energy Puget Energy, Inc. SCANA Corporation Sierra Pacific Resources Southern Company UIL Holdings Corporation UniSource Energy Corporation Unitil Corporation Vectren Corporation Westar Energy, Inc. Wisconsin Energy Corporation Xcel Energy, Inc. Mostly Regulated (26 of 73) Alliant Energy Corporation ALLETE, Inc. American Electric Power Company, Inc. Aquila, Inc. Avista Corporation CenterPoint Energy, Inc. CH Energy Group, Inc. Cinergy Corp. Cleco Corporation CMS Energy Corporation DTE Energy Company Edison International Entergy Corporation Exelon Corporation FPL Group, Inc. MGE Energy, Inc. MidAmerican Energy Holdings NiSource Inc. Northeast Utilities Otter Tail Corporation Pepco Holdings, Inc. PNM Resources, Inc. PPL Corporation Public Service Enterprise Group, Inc. TECO Energy, Inc. WPS Resources Corporation Diversified (10 of 73) Allegheny Energy, Inc. Black Hills Corporation Constellation Energy Group, Inc. Dominion Resources, Inc. Duke Energy Corporation Hawaiian Electric Industries, Inc. MDU Resources Group, Inc. OGE Energy Corp. Sempra Energy TXU Corp. Note: Based on assets at 12/31/04