MARC 2009 WallStreet: Drop, Stock, & Barrel Ben Sung Luminus Management

Investor Base Equity Equity Generalist Generalist Sector focused Sector focused Retail Retail Debt Debt Investment grade Investment grade High yield High yield

Utilities and Power Subsector Public Public Regulated Utilities Regulated Utilities Integrated Utilities Integrated Utilities Unregulated Merchant Generators Unregulated Merchant Generators “Private” GenCos “Private” GenCos Private Private

Difficult Environment Competition for investment capital Competition for investment capital Alternatives – Capital structure and/or sectors Alternatives – Capital structure and/or sectors Cash – Investors’ need for liquidity Cash – Investors’ need for liquidity Regulatory framework Regulatory framework Political/legislative uncertainty Political/legislative uncertainty Potential pressure to artificially offset cost of CO2, renewables and general economic hardship for customers Potential pressure to artificially offset cost of CO2, renewables and general economic hardship for customers Environmental legislation Environmental legislation Ratings agency pressures Ratings agency pressures Potential for downgrade - debt Potential for downgrade - debt Potential for dilution – equity Potential for dilution – equity Perception that agencies are more sensitive to regulatory structure Perception that agencies are more sensitive to regulatory structure Economy Economy Lower load growth or load decline expectations Lower load growth or load decline expectations Customers’ inability to pay Customers’ inability to pay Partially offset by traditional characteristics of utilities Partially offset by traditional characteristics of utilities Stability/predictability Stability/predictability Securities backed by hard assets Securities backed by hard assets

Recent Utility Investments $54 billion debt during latest 12 months vs $29 billion 1H08 $54 billion debt during latest 12 months vs $29 billion 1H08 $5.4 billion equity during latest 12 months vs $2.5 billion 1H08 $5.4 billion equity during latest 12 months vs $2.5 billion 1H08

Baa Spreads (1/1/08-Today) 1H08Latest 12 Months

UTY Price (1/1/08-Today) 1H08Latest 12 Months

Future Concerns for Cost of Capital Inflation Inflation Increasing inflation is concern as opposed to absolute level of inflation Increasing inflation is concern as opposed to absolute level of inflation Increased risk from stimulus Increased risk from stimulus Dividend tax cut sunset Dividend tax cut sunset Uncertainty post sunset 2010 Uncertainty post sunset 2010 Impact on equity cost of capital likely earlier than actual sunset Impact on equity cost of capital likely earlier than actual sunset Partially offset by low treasury rates Partially offset by low treasury rates

Evaluation Criteria for a Regulatory Jurisdiction Stability Stability Earnings – trackers, decoupling, passthroughs Earnings – trackers, decoupling, passthroughs Regulation – commissioner and staff turnover, consistency Regulation – commissioner and staff turnover, consistency Communication Communication Staff and commission Staff and commission Investors and regulators Investors and regulators Interested parties Interested parties

Regulatory Rankings Source: RRA 1 = Most attractive for investors 9 = Least attractive for investors

Conclusion Capital is available for utility investments – key is determining cost Capital is available for utility investments – key is determining cost Utilities are attractive investments – but need to maintain predictability/stability Utilities are attractive investments – but need to maintain predictability/stability

Appendix

Recent Utility Debt Financings Source: SNL

Recent Utility Debt Financings Source: SNL

Recent Utility Debt Financings Source: SNL

Recent Utility Debt Financings Source: SNL

Recent Equity Issuances Source: SNL