credit implications for t&d utility activities

Credit Implications for T&D Utility Activities

GRIDSCHOOL 2010MARCH 12, 2010 RICHMOND, VIRGINIA

INSTITUTE OF PUBLIC UTILITIESARGONNE NATIONAL LABORATORY

Jim HempsteadSenior Vice President

Moody’s Investors [email protected] ■ 212.553.4318

Do not cite or distribute without permission

MICHIGAN STATE UNIVERSITY

Hempstead - 02GridSchool 2010

Introduction Moody’s Rating Methodology

Sector Mapping Factor 1 – Regulatory Framework Factor 2 – Returns and Cost Recovery Factor 3 – Diversification Factor 4 – Financial Strength

Financial profile Current trends and developments Financial projections


Sector Mapping

Moody’s Rating Methodology

Many corporate / industrial sectors have a much higher percentage of Quantitative factors in Rating Methodologies: Oil & Gas - 92% Chemicals - 91% Coal – 83%

Regulated Electric & Gas Utilities Rating Factors

Cumulative Sub-Factor Weighting Assessment

Regulatory Framework 25% QualitativeAbility to Recover Costs and Earn Returns 25% Qualitative

Diversification

100%

10%

Financial Strength, Liquidity and Key Financial Metrics

40%

Qualitative

Quantitative


Sector Mapping


SectorEstimated

Rating

Municipals Aa2Cooperatives A3Parent HoldCo's Baa2Integrated Baa1T&D's Baa1LDC's A3Merchant GenCo's B1Affiliated GenCo's Baa2Industrials A2Technology A1Refining Ba2


Moody’s Rating Methodology Factor 1 – Regulatory Supportiveness

Draft – as of 2/18/10 – subject to change

B a a B

B aA


Factor 1 – Regulatory Framework (T&D’s)


Factor 1: Regulatory Framework

Sub-Factor Weights 25.00%

Current Rating

Indicated Rating

Regulatory Supportiveness

Atlantic City Electric Company Baa2 Baa3 BaaBaltimore Gas and Electric Company Baa2 Ba1 BaCentral Illinois Public Service Company Baa3 Ba1 BaCleveland Electric Illuminating Company (The) Baa3 Baa3 BaaCommonwealth Edison Company Baa3 Baa3 BaDelmarva Power & Light Company Baa2 Ba1 BaDuquesne Light Company Baa2 Baa2 BaIllinois Power Company Baa3 Ba1 BaJersey Central Power & Light Company Baa2 Baa1 BaaMetropolitan Edison Company Baa2 Baa2 BaaOhio Edison Company Baa2 Baa2 BaaPECO Energy Company A3 Baa1 BaaPennsylvania Electric Company Baa2 Baa2 BaaPennsylvania Power Co. Baa2 A3 BaaPotomac Edison Company (The) Baa3 Ba1 BaPotomac Electric Power Company Baa2 Ba1 BaPPL Electric Utilities Corporation Baa1 Baa1 BaaPublic Service Electric and Gas Company Baa1 Baa2 BaaToledo Edison Company Baa3 Baa1 BaaWest Penn Power Company Baa3 Baa2 Baa


Factor 1 – Regulatory Framework (Integrated)


Factor 1: Regulatory Framework


Current Rating

Indicated Rating

Regulatory Supportiveness

Alabama Power Company A2 A3 AALLETE, Inc. Baa1 Baa1 BaaAppalachian Power Company Baa2 Baa2 BaaCentral Illinois Light Company Baa3 Baa3 BaColumbus Southern Power Company A3 Baa1 BaaConsumers Energy Company Baa2 Baa2 BaaDayton Power & Light Company A2 A3 BaaDetroit Edison Company (The) Baa1 Baa2 BaaDuke Energy Kentucky, Inc. Baa1 Baa1 BaaDuke Energy Ohio, Inc. Baa1 Baa1 BaaEntergy Arkansas, Inc. Baa2 Baa3 BaFlorida Power & Light Company A1 A1 AGulf Power Company A2 A3 AKansas City Power & Light Company Baa1 Baa1 BaaKansas Gas & Electric Co. Baa3 Baa2 BaaKentucky Power Company Baa2 Baa1 BaaKentucky Utilities Co. A2 A3 BaaLouisville Gas & Electric Company A2 A3 BaaNevada Power Company Ba3 Baa2 BaaNorthern States Power Company (Minnesota) A3 A2 AOhio Power Company Baa1 Baa1 BaaOklahoma Gas & Electric Company A2 A3 BaaProgress Energy Florida, Inc. A3 A3 APublic Service Company of New Hampshire Baa2 Baa2 BaaPublic Service Company of Oklahoma Baa1 Baa1 BaaSierra Pacific Power Company Ba3 Baa2 BaaTampa Electric Company Baa1 Baa1 AVirginia Electric and Power Company Baa1 Baa1 A


Moody’s Rating Methodology Factor 2 – Cost Recovery

Draft – as of 2/18/10 – subject to change

Forward Test Intermin Fuel & DSM /

State Year Rates Transmission Renewables Environmental Pur. Pwr. Capacity Other

Alabama No Yes No No Yes Yes No NoArkansas Partial Yes No No Yes Yes No YesDelaware No After 7 months No No No No No NoDistrict of Columbia No Yes No No No Yes No NoFlorida No Yes No Yes Yes Yes Yes YesIllinois Yes Yes No Yes Yes No No NoKansas No Yes Yes No Yes Yes No YesKentucky Yes Yes No No Yes Yes No YesMaryland Yes Yes Yes YesMichigan Yes Yes Yes Yes No Yes Yes YesMinnesota Yes Yes Yes Yes Yes Yes No YesNevada Partial Yes Yes YesNew Hampshire No No Yes No No No YesNew Jersey No Yes Yes Yes No Yes YesOhio Partially No Yes Yes Yes Yes Yes YesOklahoma Partially Yes Yes Yes Yes Yes Yes YesPennsylvania No Yes Yes Yes No No No YesUtah Yes Yes No No No Yes No NoVirginia No Yes Yes Yes Yes Yes Yes YesWyoming No Yes No No No Yes No Yes

Riders Automatic Recovery


Moody’s Rating Methodology Factor 2 – Cost Recovery (T&D’s)

Factor 2: Returns and Cost Recovery


Current Rating

Indicated Rating

Rate Adjustment and Cost Recovery

Mechanisms

Atlantic City Electric Company Baa2 Baa3 BaaBaltimore Gas and Electric Company Baa2 Ba1 BaCentral Illinois Public Service Company Baa3 Ba1 BaCleveland Electric Illuminating Company (The) Baa3 Baa3 BaaCommonwealth Edison Company Baa3 Baa3 BaaDelmarva Power & Light Company Baa2 Ba1 BaDuquesne Light Company Baa2 Baa2 BaaIllinois Power Company Baa3 Ba1 BaJersey Central Power & Light Company Baa2 Baa1 BaaMetropolitan Edison Company Baa2 Baa2 BaaOhio Edison Company Baa2 Baa2 BaaPECO Energy Company A3 Baa1 BaaPennsylvania Electric Company Baa2 Baa2 BaaPennsylvania Power Co. Baa2 A3 BaaPotomac Edison Company (The) Baa3 Ba1 BaPotomac Electric Power Company Baa2 Ba1 BaPPL Electric Utilities Corporation Baa1 Baa1 BaaPublic Service Electric and Gas Company Baa1 Baa2 BaaToledo Edison Company Baa3 Baa1 BaaWest Penn Power Company Baa3 Baa2 Baa


Moody’s Rating Methodology Factor 2 – Cost Recovery (Integrated)

Factor 2: Returns and

Cost RecoverySub-Factor Weights 25.00%

Current Rating

Indicated Rating

Rate Adjustment and Cost Recovery Mechanisms

Alabama Power Company A2 A3 AALLETE, Inc. Baa1 Baa1 AAppalachian Power Company Baa2 Baa2 BaaCentral Illinois Light Company Baa3 Baa3 BaColumbus Southern Power Company A3 Baa1 BaaConsumers Energy Company Baa2 Baa2 BaaDayton Power & Light Company A2 A3 BaaDetroit Edison Company (The) Baa1 Baa2 BaaDuke Energy Kentucky, Inc. Baa1 Baa1 ADuke Energy Ohio, Inc. Baa1 Baa1 BaaEntergy Arkansas, Inc. Baa2 Baa3 BaFlorida Power & Light Company A1 A1 AGulf Power Company A2 A3 AKansas City Power & Light Company Baa1 Baa1 BaaKansas Gas & Electric Co. Baa3 Baa2 BaKentucky Power Company Baa2 Baa1 AKentucky Utilities Co. A2 A3 ALouisville Gas & Electric Company A2 A3 ANevada Power Company Ba3 Baa2 BaaNorthern States Power Company (Minnesota) A3 A2 AOhio Power Company Baa1 Baa1 BaaOklahoma Gas & Electric Company A2 A3 AProgress Energy Florida, Inc. A3 A3 APublic Service Company of New Hampshire Baa2 Baa2 BaaPublic Service Company of Oklahoma Baa1 Baa1 ASierra Pacific Power Company Ba3 Baa2 BaaTampa Electric Company Baa1 Baa1 AVirginia Electric and Power Company Baa1 Baa1 Baa


Moody’s Rating Methodology Factor 3 – Diversification (T&D’s)

For T&D’s, all 10% of Factor 3 is allocated to T&D Market Position due to the lack of owned generation

Factor 3: Diversification

Factor 4: Financial Strength

Sub-Factor Weights 10.00% 0.00%

Current Rating

Indicated Rating

Market PositionFuel or

Generation Diversification

Atlantic City Electric Company Baa2 Baa3 Ba naBaltimore Gas and Electric Company Baa2 Ba1 Baa naCentral Illinois Public Service Company Baa3 Ba1 Ba naCleveland Electric Illuminating Company (The) Baa3 Baa3 Ba naCommonwealth Edison Company Baa3 Baa3 Baa naDelmarva Power & Light Company Baa2 Ba1 Baa naDuquesne Light Company Baa2 Baa2 Ba naIllinois Power Company Baa3 Ba1 Ba naJersey Central Power & Light Company Baa2 Baa1 Baa naMetropolitan Edison Company Baa2 Baa2 Baa naOhio Edison Company Baa2 Baa2 Baa naPECO Energy Company A3 Baa1 Baa naPennsylvania Electric Company Baa2 Baa2 Baa naPennsylvania Power Co. Baa2 A3 Baa naPotomac Edison Company (The) Baa3 Ba1 Baa naPotomac Electric Power Company Baa2 Ba1 Baa naPPL Electric Utilities Corporation Baa1 Baa1 Baa naPublic Service Electric and Gas Company Baa1 Baa2 Baa naToledo Edison Company Baa3 Baa1 Ba naWest Penn Power Company Baa3 Baa2 Ba na


Moody’s Rating Methodology Factor 3 – Diversification (Integrated)

Sub-Factor Weights 5.00% 5.00%

Current Rating

Indicated Rating Market Position

Fuel or Generation

DiversificationAlabama Power Company A2 A3 Baa BaaALLETE, Inc. Baa1 Baa1 Baa BaAppalachian Power Company Baa2 Baa2 Baa BaaCentral Illinois Light Company Baa3 Baa3 Ba BaColumbus Southern Power Company A3 Baa1 Baa BaaConsumers Energy Company Baa2 Baa2 Baa BaaDayton Power & Light Company A2 A3 Ba BDetroit Edison Company (The) Baa1 Baa2 Ba BaDuke Energy Kentucky, Inc. Baa1 Baa1 Baa BaaDuke Energy Ohio, Inc. Baa1 Baa1 Baa BaaEntergy Arkansas, Inc. Baa2 Baa3 Ba BaFlorida Power & Light Company A1 A1 Baa BaaGulf Power Company A2 A3 Ba BaKansas City Power & Light Company Baa1 Baa1 Baa BaaKansas Gas & Electric Co. Baa3 Baa2 Baa BaaKentucky Power Company Baa2 Baa1 Baa BaaKentucky Utilities Co. A2 A3 Baa BaaLouisville Gas & Electric Company A2 A3 Baa BaaNevada Power Company Ba3 Baa2 Baa BaaNorthern States Power Company (Minnesota) A3 A2 Baa BaaOhio Power Company Baa1 Baa1 Baa BaaOklahoma Gas & Electric Company A2 A3 Baa BaaProgress Energy Florida, Inc. A3 A3 Baa BaaPublic Service Company of New Hampshire Baa2 Baa2 Baa BaaPublic Service Company of Oklahoma Baa1 Baa1 Baa BaaSierra Pacific Power Company Ba3 Baa2 Baa BaaTampa Electric Company Baa1 Baa1 Ba BaVirginia Electric and Power Company Baa1 Baa1 Baa Baa

Factor 3: Diversification


Moody’s Rating Methodology Factor 4 – Financial Strength (T&D’s)

Subfactor Aa A Baa BaCFO pre-WC + Interest/Interest 6.0x - 7.0x 4.5x - 6.0x 2.7x - 4.5x 1.5x - 2.7xCFO pre-WC/Adj Debt 30% - 35% 22% - 30% 13% - 22% 5% - 13%RCF/Adj Debt 25% - 30% 17% - 25% 9% - 17% 0% - 9%Adj Debt/Capitalization 25% - 35% 35% - 45% 45% - 55% 55% - 65%

Sub-Factor Weights 10.00% 7.50% 7.50% 7.50% 7.50%

Current Rating

Indicated Rating

Liquidity

3 Year Average CFO pre-WC +

Interest/ Interest

3 Year Average CFO pre-

WC/Adj Debt

3 Year Average CFO pre-WC - Dividends/Adj

Debt

3 Year Average Adj. Debt/Cap or Debt/RAV

Atlantic City Electric Company Baa2 Baa3 Baa Baa Baa Ba BaaBaltimore Gas and Electric Company Baa2 Ba1 Baa Baa Ba Baa BaaCentral Illinois Public Service Company Baa3 Ba1 Ba Baa Baa Ba ACleveland Electric Illuminating Company (The) Baa3 Baa3 Baa Ba Ba Ba BaCommonwealth Edison Company Baa3 Baa3 Ba Baa Baa Baa ADelmarva Power & Light Company Baa2 Ba1 Baa Baa Ba Baa BaaDuquesne Light Company Baa2 Baa2 A Baa Baa A AIllinois Power Company Baa3 Ba1 Ba Baa Baa Baa BaaJersey Central Power & Light Company Baa2 Baa1 Baa Aa A A AaMetropolitan Edison Company Baa2 Baa2 Baa Baa Baa Baa AOhio Edison Company Baa2 Baa2 Baa A A Baa BaaPECO Energy Company A3 Baa1 A A A Baa BaaPennsylvania Electric Company Baa2 Baa2 Baa Baa Ba Ba APennsylvania Power Co. Baa2 A3 Baa Aaa Aa Aaa AaPotomac Edison Company (The) Baa3 Ba1 Ba Baa Baa Ba BaaPotomac Electric Power Company Baa2 Ba1 Baa Baa Baa Baa BaaPPL Electric Utilities Corporation Baa1 Baa1 Baa A A A BaaPublic Service Electric and Gas Company Baa1 Baa2 Baa Baa Baa Baa BaaToledo Edison Company Baa3 Baa1 Baa A Aa A BaWest Penn Power Company Baa3 Baa2 Ba Aa A Ba A



Moody’s Rating Methodology Factor 4 – Financial Strength (Integrated)

Subfactor Aa A Baa BaCFO pre-WC + Interest/Interest 6.0x - 7.0x 4.5x - 6.0x 2.7x - 4.5x 1.5x - 2.7xCFO pre-WC/Adj Debt 30% - 35% 22% - 30% 13% - 22% 5% - 13%RCF/Adj Debt 25% - 30% 17% - 25% 9% - 17% 0% - 9%Adj Debt/Capitalization 25% - 35% 35% - 45% 45% - 55% 55% - 65%

Sub-Factor Weights 10.00% 7.50% 7.50% 7.50% 7.50%

Current Rating

Indicated Rating Liquidity

3 Year Average CFO pre-WC +

Interest/ Interest

3 Year Average CFO pre-

WC/Adj Debt

3 Year Average CFO pre-WC - Dividends/Adj

Debt

3 Year Average Adj. Debt/Cap or Debt/RAV

Alabama Power Company A2 A3 A A Baa Baa AALLETE, Inc. Baa1 Baa1 A A A Baa AAppalachian Power Company Baa2 Baa2 A Baa Ba Baa BaaCentral Illinois Light Company Baa3 Baa3 Ba Aa A A AColumbus Southern Power Company A3 Baa1 A A A Baa BaaConsumers Energy Company Baa2 Baa2 Baa Baa Baa Baa BaDayton Power & Light Company A2 A3 A Aaa Aaa Aa AaDetroit Edison Company (The) Baa1 Baa2 Baa A Baa Baa BaDuke Energy Kentucky, Inc. Baa1 Baa1 Baa A Baa A ADuke Energy Ohio, Inc. Baa1 Baa1 Baa A A A AaEntergy Arkansas, Inc. Baa2 Baa3 Baa A A A AFlorida Power & Light Company A1 A1 A Aa Aa Aa AaGulf Power Company A2 A3 A A A Baa BaaKansas City Power & Light Company Baa1 Baa1 A A A Baa AKansas Gas & Electric Co. Baa3 Baa2 Baa A Baa A AaKentucky Power Company Baa2 Baa1 A Baa Baa Baa BaaKentucky Utilities Co. A2 A3 A Aa A A ALouisville Gas & Electric Company A2 A3 A Aa A A ANevada Power Company Ba3 Baa2 Baa Baa Baa Baa BaaNorthern States Power Company (Minnesota) A3 A2 A A A A AOhio Power Company Baa1 Baa1 A Baa Baa A BaaOklahoma Gas & Electric Company A2 A3 A A A A AProgress Energy Florida, Inc. A3 A3 Baa A A A BaaPublic Service Company of New Hampshire Baa2 Baa2 Baa Baa Baa Baa BaPublic Service Company of Oklahoma Baa1 Baa1 A Baa Baa Baa BaaSierra Pacific Power Company Ba3 Baa2 Baa Baa Baa Baa BaaTampa Electric Company Baa1 Baa1 Baa Baa A Baa BaaVirginia Electric and Power Company Baa1 Baa1 Baa Baa Baa Baa A



Financial Profile Income Statement (3 year average, 2006-2008)

($MMs) Revenue EBITDA Interest Net IncomeMunicipals 1,407 351 143 97 Cooperatives 671 162 66 30 Parent HoldCo's 7,506 1,875 456 492 Integrated 2,567 690 136 197 T&D's 2,042 471 105 109 LDC's 1,102 182 44 38 Merchant GenCo's 4,368 905 517 122 Affiliated GenCo's 3,615 1,248 161 544 Industrials 44,166 6,600 778 2,103 Technology 47,184 11,587 267 6,607 Refining 23,351 11,170 137 758


Financial Profile Balance Sheet (3 year average, 2006-2008)

($MMs) Cash Net PP&E Tot. Assets Debt EquityMunicipals 563 3,682 4,107 2,625 1,635 Cooperatives 71 1,231 1,729 1,238 779 Parent HoldCo's 309 12,021 19,982 8,014 4,999 Integrated 34 4,833 6,741 2,292 2,013 T&D's 36 2,733 4,811 1,758 1,455 LDC's 12 1,414 2,200 738 630 Merchant GenCo's 751 6,941 12,598 6,229 2,313 Affiliated GenCo's 120 4,592 7,742 2,671 2,317 Industrials 2,966 7,841 50,021 10,370 15,658 Technology 7,489 7,907 62,648 5,588 27,271 Refining 379 5,360 9,304 2,381 3,630


Financial Profile Cash Flow Statement (3 year average, 2006-2008)

($MMs) CFO CapX Dividends FCFNet Inc +

D&AAs a % of

CFOMunicipals 373 334 66 (27) 274 74%Cooperatives 76 124 - (49) 79 104%Parent HoldCo's 1,250 1,423 308 (481) 1,079 86%Integrated 469 572 108 (211) 432 92%T&D's 272 265 95 (88) 231 85%LDC's 109 108 39 (38) 98 90%Merchant GenCo's 761 440 130 191 555 73%Affiliated GenCo's 916 609 401 (94) 771 84%Industrials 6,410 1,495 2,237 2,678 3,368 53%Technology 9,887 2,411 1,101 6,375 8,852 90%Refining 1,070 723 93 254 1,093 102%


Credit Trends and Developments Numerous considerations with credit implications over the long-term horizon; few risks evident over near-term

Does NOT absolve sector from proactively strengthening balance sheet and bolstering liquidity reserves on front-end of cycle

ConsiderationPotential

Credit ImpactEnvironmental HighCapital investing MediumAging workforce LowRegulatory relationship HighEconomic turmoil MediumTechnological risks High


Financial Projections


T&D Cash Flows / Debt


15. 0%

17. 0%

19. 0%

21. 0%

23. 0%

2006 2007 2008 LTM 3Q09

CFO/ Debt ( CFO pre- W/ C) / Debt FFO/ Debt


Integrated Cash Flows / Debt


15. 0%

17. 0%

19. 0%

21. 0%

23. 0%

25. 0%

2006 2007 2008 LTM 3Q09

CFO/ Debt ( CFO pre- W/ C) / Debt FFO/ Debt


A C E ( B a a 1 )

B G & E ( B a a 2 )

C I P S C o ( B a a 2 )

C l e v e l a n d E l e c . ( B a a 3 )

C o m m E d

( B a 1 )

D e l m a r v a P & L ( B a a 2 )

D u q u e s n e L i g h t ( B a a 2 )

I l l i n o i s P o w e r ( B a a 3 )

M e t E d

( B a a 2 )

P P L E l e c ( B a a 1 )

P S E G

( B a a 1 )

J e r s e y C P & L ( B a a 2 )T o l e d o E d

( B a a 3 )

W e s t P e n n

( B a a 3 )

P o t o m a c E l e c ( B a a 2 )

O h i o E d ( B a a 2 )

5 %

1 0 %

1 5 %

2 0 %

2 5 %

3 0 %

3 5 %

2 . 0 x 2 . 5 x 3 . 0 x 3 . 5 x 4 . 0 x 4 . 5 x 5 . 0 x 5 . 5 x 6 . 0 x 6 . 5 x

B a R a n g e

A R a n g e

B a a R a n g e

Financial ProjectionsC

FO

pre

-WC

/ D

eb

t

CFO pre-WC / Interest

2006-2008 AverageT&D Metrics


Appendix

Rating Issuer Name Rating Issuer Name(P)A2 FPL Group, Inc. Baa2 SCANA Corporation A2 NSTAR Baa3 Ameren Corporation A3 Southern Company (The) Baa3 Black Hills Corporation A3 Wisconsin Energy Corporation (P)Baa3 Cleco Corporation Baa1 Alliant Energy Corporation Baa3 Constellation Energy Group, Inc.(P)Baa1 Consolidated Edison, Inc. Baa3 Energy East Corporation Baa1 DPL Inc. Baa3 Entergy Corporation Baa1 Exelon Corporation Baa3 FirstEnergy Corp. Baa1 Integrys Energy Group, Inc. Baa3 Great Plains Energy IncorporatedBaa1 MidAmerican Energy Holdings Co. Baa3 Pepco Holdings, Inc. Baa1 OGE Energy Corp. (P)Baa3 Pinnacle West Capital CorporatioBaa1 PG&E Corporation Baa3 TECO Energy, Inc. Baa1 Sempra Energy Baa3 UIL Holdings Corporation Baa1 Vectren Utility Holdings, Inc. (P)Baa3 Westar Energy, Inc. Baa1 Xcel Energy Inc. (P)Ba1 Allegheny Energy, Inc. Baa2 American Electric Power Company, Ba1 CenterPoint Energy, Inc. Baa2 Dominion Resources Inc. Ba1 CMS Energy Corporation Baa2 DTE Energy Company Ba1 Duquesne Light Holdings, Inc. Baa2 Duke Energy Corporation Ba1 NV Energy Inc. Baa2 Edison International Ba1 UniSource Energy Corporation Baa2 Hawaiin Electric Industries (P)Ba2 NiSource Inc. (P)Baa2 IDACORP, Inc. Ba2 PNM Resources, Inc. Baa2 Northeast Utilities Ba2 Puget Energy, Inc.Baa2 PPL Corporation B1 AEI Baa2 Progress Energy, Inc. B1 AES Corporation, (The) (P)Baa2 Public Service Enterprise Group Caa1 Energy Future Holdings Corp.

Parents

Rating Issuer Name Rating Issuer NameBa2 Covanta Holding Corporation A3 Exelon Generation Company, LLC Ba3 NRG Energy, Inc. Baa1 KeySpan Generation LLC B1 Edison Mission Energy Baa1 PSEG Power LLC B1 Mirant Corporation Baa1 Southern Power Company B1 RRI Energy, Inc. Baa2 FirstEnergy Solutions Corp. B2 Calpine Corporation Baa2 PPL Energy Supply, LLC B2 Dynegy Holdings Inc. Baa3 Allegheny Energy Supply Company,Caa2 Texas Competitive Electric Holdi Baa3 AmerenEnergy Generating Company

Affiliated MerchantsUnaffiliated Merchants

Rating Issuer Name Rating Issuer NameA1 NSTAR Electric Company Baa2 Duquesne Light Company A3 Central Hudson Gas & Electric Co Baa2 Jersey Central Power & LightA3 Consolidated Edison Company of NY Baa2 Metropolitan Edison Company A3 Massachusetts Electric Company Baa2 New York State Electric and Gas A3 Narragansett Electric Company Baa2 Ohio Edison Company A3 New England Power Company Baa2 Pennsylvania Electric Company A3 Niagara Mohawk Power Corporation Baa2 Pennsylvania Power Company A3 PECO Energy Company Baa2 Potomac Electric Power Company Baa1 Central Maine Power Company Baa2 Rochester Gas & Electric Baa1 Connecticut Light and Power Baa2 United Illuminating Company Baa1 Oncor Electric Delivery Company Baa2 Western Massachusetts ElectricBaa1 Orange and Rockland Utilities Baa3 CenterPoint Energy Houston ElectricBaa1 PPL Electric Utilities Corp. Baa3 Central Illinois Public Service Baa1 Public Service Electric and Gas Baa3 Cleveland Electric Illuminating Baa1 Superior Water, Light and Power Baa3 Commonwealth Edison Company Baa2 AEP Texas Central Company Baa3 Illinois Power Company Baa2 AEP Texas North Company Baa3 Potomac Edison Company Baa2 Atlantic City Electric Company Baa3 Texas-New Mexico Power Company Baa2 Baltimore Gas and Electric Baa3 Toledo Edison Company Baa2 Delmarva Power & Light Company Baa3 West Penn Power Company

T&DRating Issuer Name Rating Issuer NameAa3 Madison Gas and Electric Company Baa1 Public Service Company of OklahomaA1 Florida Power & Light Company Baa1 Puget Sound Energy, Inc. A1 Mississippi Power Company Baa1 South Carolina Electric & Gas A1 Wisconsin Electric Power Company Baa1 Southwestern Public Service CompA2 Alabama Power Company Baa1 Tampa Electric Company A2 Dayton Power & Light Company Baa1 Virginia Electric and Power Co.A2 Georgia Power Company Baa2 Appalachian Power Company A2 Gulf Power Company Baa2 Arizona Public Service Company A2 Kentucky Utilities Co. Baa2 Black Hills Power, Inc. A2 Louisville Gas & Electric Baa2 Cleco Power LLC A2 MidAmerican Energy Company (P)Baa2 Consumers Energy Company A2 Oklahoma Gas & Electric Baa2 El Paso Electric Company A2 San Diego Gas & Electric Baa2 Empire District Electric CompanyA2 Wisconsin Power and Light Baa2 Entergy Arkansas, Inc. A2 Wisconsin Public Service Baa2 Entergy Louisiana, LLC A3 Columbus Southern Power Baa2 Indiana Michigan Power Company A3 Duke Energy Carolinas, LLC Baa2 Indianapolis Power & Light CompanyA3 Northern States Power Co. (MN) Baa2 Kentucky Power Company (P)A3 Northern States Power Co. (WI) Baa2 Portland General Electric CompanyA3 NorthWestern Corporation Baa2 Public Service Company of New HampshireA3 Pacific Gas & Electric Company Baa2 Union Electric Company A3 Progress Energy Carolinas, Inc. Baa3 Avista Corp. A3 Progress Energy Florida, Inc. Baa3 Central Illinois Light Company A3 Southern California Edison Baa3 Central Vermont Public Service CoBaa1 ALLETE, Inc. Baa3 Entergy Gulf States LouisianaBaa1 Detroit Edison Company Baa3 Entergy Mississippi, Inc. Baa1 Duke Energy Indiana, Inc. Baa3 Kansas Gas & ElectricBaa1 Duke Energy Kentucky, Inc. Baa3 Monongahela Power Company Baa1 Duke Energy Ohio, Inc. Baa3 Public Service Company of New MexicoBaa1 Green Mountain Power Corporation Baa3 Southwestern Electric Power CompBaa1 Hawaiian Electric Company Baa3 Tucson Electric Power Company Baa1 Idaho Power Company Ba1 Entergy Texas, Inc. Baa1 Kansas City Power & Light Ba2 Entergy New Orleans, Inc. Baa1 Ohio Power Company Ba3 Nevada Power Company Baa1 PacifiCorp Ba3 Sierra Pacific Power Company Baa1 Public Service Company of Colorado

Integrated


Appendix

Rating Issuer Name Rating Issuer NameAa1 City of San Antonio, TX A2 Arkansas Electric Cooperative CoAa1 Orlando, FL A2 Associated Electric CooperativeAa2 JEA, FL A2 Basin Electric Power CooperativeAa2 NYPA A2 Buckeye Power, Inc. Aa2 Santee Cooper A3 Dairyland Power Cooperative Aa2 Seattle A3 Golden Spread Electric CooperativeAa3 LADWP A3 Great River Energy A1 MEAG A3 Old Dominion Electric CooperativeA1 SMUD Baa1 Minnkota Power Cooperative, Inc

Baa1 Oglethorpe Power Corporation Baa1 PowerSouth Energy Cooperative Baa1 South Mississippi Electric PowerBaa2 Hoosier Energy Rural Electric CoBaa2 Tri-State G&T Association Inc.

CooperativesMunicipals

Rating Issuer NameAa2 General Electric Company A1 Illinois Tool Works Inc. A2 Boeing Company (The) A2 Caterpillar Inc. A2 Emerson Electric Company A2 United Technologies Corporation Baa1 Ingersoll-Rand Company Ltd

Rating Issuer NameAaa Microsoft Corporation A1 Cisco Systems, Inc. (P)A1 Intel Corporation A2 Dell Inc. A2 Hewlett-Packard Company A2 Oracle Corporation

Google Inc.

Rating Issuer NameBaa2 Valero Energy Corporation Baa3 Sunoco, Inc. Ba1* Tesoro Corporation Ba2* Frontier Oil Corporation Ba3* Holly Corp. B2* Alon USA Energy, Inc. B2* CVR Energy Inc. B3* United Refining Company *CFR

Refiner Index

Industrials Index

Technology Index

Rating Issuer Name Rating Issuer NameAa3 New Jersey Natural Gas Company A3 UGI Utilities, Inc. A1 Alabama Gas Corporation Baa1 Boston Gas Company A1 Wisconsin Gas LLC Baa1 Cascade Natural Gas Corp. A2 Northern Illinois Gas Company Baa1 Connecticut Natural Gas CorporatA2 Southern California Gas Company Baa1 Indiana Gas Company, Inc. A2 Washington Gas Light Company (P)Baa1 Laclede Gas Company A3 Atlanta Gas Light Company Baa1 Michigan Consolidated Gas CompanA3 Colonial Gas Company Baa1 South Jersey Gas Company A3 KeySpan Gas East Corporation Baa2 Bay State Gas Company A3 North Shore Gas Company Baa2 Berkshire Gas Company A3 Northwest Natural Gas Company Baa2 Northern Indiana Public Service A3 Peoples Gas Light and Coke Compa Baa2 Southern Connecticut Gas CompanyA3 Piedmont Natural Gas Company, In Baa2 Yankee Gas Services Company A3 Public Service Co. of North Caro Baa3 Southwest Gas Corporation A3 Questar Gas Company Ba2* SourceGas LLC

LDC

credit implications for t&d utility activities

Documents

rating methodologies

financial profilebalance

cost recovery tdshempstead

year average

cost recovery draft

cost recoveryfactor

regulatory frameworkfactor

regulatory supportivenessdraft