ARKANSAS WESTERN GAS COMPANY

Transcription

1 IN THE MATTER OF 'rm APPLICATION 1 OF ARKANSAS WES'I'ERN GAS COMPANY ) DOCKET NO U FOR APPROVAL OF A GENERAL CHANGE ) IN RATES AND TARIFFS 1 EXHIBITS OF ROGER A. MORIN ON BEHALF OF ARKANSAS WESTERN GAS COMPANY December 29,2004

2 RESUME OF ROGER A. MORIN (Fall 2004) Exhibit RAM- 1 Page 1 of 20 NAME: Roger A. Morin ADDRESS: Big Canoe Jasper, GA 30143, USA TELEPHONE: (706) business office (706) business fax (404) office-university ADDRESS: profmorin@msn.com DATE OF BIRTH: 3/5/1945 PRESENT EMPLOYER: Georgia State University Robinson College of Business Atlanta, GA RANK: Professor of Finance HONORS: Professor of Finance for Regulated Industry Director Center for the Study of Regulated Industry, College of Business, Georgia State University. EDUCATIONAL HISTORY - Bachelor of Electrical Engineering, McGill University, Montreal, Canada, Master of Business Administration, McGill University, Montreal, Canada, PhD in Finance & Econometrics, Wharton School of Finance, University of Pennsylvania, 1976.

3 Exhibit RAM- 1 Page 2 of 20 EMPLOYMENT HISTORY - Lecturer, Wharton School of Finance, Univ. of Pa., Assistant Professor, University of Montreal School of Business, Associate Professor, University of Montreal School of Business, Professor of Finance, Georgia State University, Professor of Finance for Regulated Industry and Director, Center for the Study of Regulated Industry, College of Business, Georgia State University, Visiting Professor of Finance, Amos Tuck School of Business, Dartmouth College, Hanover, N.H., 1986 OTHER BUSINESS ASSOCIATIONS - Communications Engineer, Bell Canada, Member of the Board of Directors, Financial Research Institute of Canada, Co-founder and Director Canadian Finance Research Foundation, Vice-president of Research, Garmaise-Thomson & Associates, Investment Management Consultants, Executive Visions Inc., Board of Directors, Member - Board of External Advisors, College of Business, Georgia State University, Member

4 Exhibit RAM- I Page 3 of 20 PROFESSIONAL CLIENTS AGL Resources AT & T Communications Alagasco - Energen Alaska Anchorage Municipal Light & Power Alberta Power Ltd. Ameren American Water Works Company Ameritech Arkansas Western Gas Baltimore Gas & Electric - Constellation Energy B.C. Telephone B C GAS Bell Canada Bel lcore Bell South Corp. Bruncor (New Brunswick Telephone) Burlington-Northern C&SBank Cajun Electric Canadian Radio-Television & Telecomm. Commission Canadian Utilities Canadian Western Natural Gas Centel Centra Gas Central Illinois Light & Power Co. Central Telephone

5 Exhibit RAM- 1 Page 4 of 20 PROFESSIONAL CLIENTS (CONT'D) Central & South West Corp. Chattanoogee Gas Company Cincinnatti Gas & Electric Cinergy Corp. Citizens Utilities City Gas of Florida CN-CP Telecommunications Commonwealth Telephone Co. Columbia Gas System Consolidated Natural Gas Constellation Energy Deerpath Group Edison International Edmonton Power Company Elizabethtown Gas Co. Energen Engraph Corporation Entergy Corp. Entergy Arkansas Inc. Entergy Gulf States, Inc. Entergy Louisiana, Inc. Entergy New Orleans, Inc. First Energy Florida Water Association Fortis Garmaise-Thomson & Assoc., Investment Consultants

6 Exhibit RAM- I Page 5 of 20 PROFESSIONAL CLIENTS (CONT'D) Gaz Metropolitain General Public Utilities Georgia Broadcasting Corp. Georgia Power Company GTE California - Verizon GTE Northwest Inc. - Verizon GTE Service Corp. - Verizon GTE Southwest Incorporated - Verizon Gulf Power Company Havasu Water Inc. Heater Utilities - Aqua - America Hope Gas Inc. H ydro-quebec ICG Utilities Illinois Commerce Commission Island Telephone Jersey Central Power & Light Kansas Power & Light KeySpan Energy Manitoba Hydro Maritime Telephone Metropolitan Edison Co. Minister of Natural Resources Province of Quebec Minnesota Power & Light Mississippi Power Company Missouri Gas Energy

7 Exhibit RAM- 1 Page 6 of 20 PROFESSIONAL CLIENTS (CONT'D) Mountain Bell Nevada Power Company New Brunswick Power Newfoundland Power Inc. - Fortis Inc. New Tel Enterprises Ltd. New York Telephone Co. Norfolk-Southern Northern Telephone Ltd. Northwestern Bell Northwestern Utilities Ltd. Nova Scotia Power - Emera Inc. Nova Scotia Utility and Review Board Nu1 Corp. NYNEX Oklahoma G & E Ontario Telephone Service Commission Orange & Rockland Pacific Northwest Bell People's Gas System Inc. People's Natural Gas Pennsylvania Electric Co. Price Waterhouse PSI Energy Public Service Electric & Gas Quebec Telephone Regie de 1'Energie du Quebec

8 Exhibit RAM- 1 Page 7 of 20 PROFESSIONAL CLIENTS (CONT'D) Rochester Telephone San Diego Gas & Electric SaskPower Sierra Pacific Power Company Sierra Pacific Resources Southern Bell Southern States Utilities Southern Union Gas South Central Bell Sun City Water Company TECO Energy The Southern Company Touche Ross and Company TransEnergie Trans-Quebec & Maritimes Pipeline TXU Corp US WEST Communications Union Heat Light & Power Utah Power & Light Vermont Gas Systems Inc.

9 Exhibit RAM- I Page 8 of 20 MANAGEMENT DEVELOPMENT AND PROFESSIONAL EXECUTIVE EDUCATION - Canadian Institute of Marketing, Corporate Finance, Hydro-Quebec, "Capital Budgeting Under Uncertainty," Institute of Certified Public Accountants, Mergers & Acquisitions, Investment Dealers Association of Canada, Financial Research Foundation, bi-annual seminar, Advanced Management Research (AMR), faculty member, Financial Analysts Federation, Educational chapter: "Financial Futures Contracts" seminar - Exnet Inc. a.k.a. The Management Exchange Inc., faculty member, , National Seminars: Risk and Return on Capital Projects Cost of Capital for Regulated Utilities Capital Allocation for Utilities Alternative Regulatory Frameworks Utility Directors ' Workshop Shareholder Value Creation for Utilities Real Options in Utility Capital Investments Fundamentals of Utility Finance in a Restructured Environment Contemporary Issues in Utility Finance - Georgia State University College of Business, Management Development Program, faculty member, EXPERT TESTIMONY & UTILITY CONSULTING AREAS OF EXPERTISE Rate of Return Capital Structure Generic Cost of Capital Costing Methodology Depreciation Flow-Through vs Normalization Revenue Requirements Methodology

10 Exhibit RAM- 1 Page 9 of 20 Utility Capital Expenditures Analysis Risk Analysis Capital Allocation Divisional Cost of Capital, Unbundling Incentive Regulation & Alternative Regulatory Plans Shareholder Value Creation Value-Based Management REGULATORY BODIES Federal Communications Commission Federal Energy Regulatory Commission Georgia Public Service Commission South Carolina Public Service Commission North Carolina Utilities Commission Pennsylvania Public Service Commission Ontario Telephone Service Commission Quebec Telephone Service Commission Newfoundland Board of Commissioners of Public Utilities Georgia Senate Committee on Regulated Industries Alberta Public Service Board Tennessee Regulatory Authority Oklahoma State Board of Equalization Miss is s ippi Public Service Commission Minnesota Public Utilities Commission Canadian Radio-Television & Telecommunications Comm. New Brunswick Board of Public Commissioners Alaska Public Utility Commission

11 Exhibit RAM- 1 Page 10 of 20 National Energy Board of Canada Florida Public Service Commission Montana Public Service Commission Arizona Corporation Commission Quebec Natural Gas Board Quebec Regie de 1 Energie New York Public Service Commission Washington Utilities & Transportation Commission Manitoba Board of Public Utilities New Jersey Board of Public Utilities Alabama Public Service Commission Utah Public Service Commission Nevada Public Service Commission Louisiana Public Service Commission Colorado Public Utilities Board West Virginia Public Service Commission Ohio Public Utilities Commission California Public Service Commission Hawaii Public Service Commission Illinois Commerce Commission British Columbia Board of Public Utilities Indiana Utility Regulatory Commission Minnesota Public Utilities Commission Texas Public Utility Commission Michigan Public Service Commission Iowa Board of Public Utilities Missouri Public Service Commission

12 Exhibit RAM-] Page 1 1 of 20 SERVICE AS EXPERT WITNESS Southern Bell, So. Carolina PSC, Docket #81-201C Southern Bell, So. Carolina PSC, Docket #82-294C Southern Bell, North Carolina PSC, Docket #P Metropolitan Edison, Pennsylvania PUC, Docket #R Pennsylvania Electric, Pennsylvania PUC,Docket#R Georgia Power, Georgia PSC, Docket # 3270-U, 1981 Georgia Power, Georgia PSC, Docket # 3397-U, 1983 Georgia Power, Georgia PSC, Docket # 3673-U, 1987 Georgia Power, F.E.R.C., Docket # ER , Georgia Power, F.E.R.C., Docket # ER , Georgia Power, F.E.R.C., Docket # ER , Bell Canada, CRTC 1987 Northern Telephone, Ontario PSC GTE-Quebec Telephone, Quebec PSC, Docket B Newtel., Nfld. Brd of Public Commission PU CN-CP Telecommunications, CRTC Quebec Northern Telephone, Quebec PSC Edmonton Power Company, Alberta Public Service Board Kansas Power & Light, F.E.R.C., Docket # ER NYNEX, FCC generic cost of capital Docket # Bell South, FCC generic cost of capital Docket # American Water Works - Tennessee, Docket #7226 Burlington-Northern - Oklahoma State Board of Taxes Georgia Power, Georgia PSC, Docket # 3549-U GTE Service Corp., FCC Docket #84-200

13 Exhibit RAM-1 Page 12 of 20 Mississippi Power Co., Miss. PSC, Docket U-4761 Citizens Utilities, Ariz. Corp. Comm., D # U Quebec Telephone, Quebec PSC, 1986,1987,1992 Newfoundland L & P, Nfld. Brd. Pub1 Comm. 1987, 1991 Northwestern Bell, Minnesota PSC, #P-42 1KI GTE Service Corp., FCC Docket # Anchorage Municipal Power & Light, Alaska PUC, 1988 New Brunswick Telephone, N.B. PUC, 1988 Trans-Quebec Maritime, Nat'l Energy Brd. of Cda, '88-92 Gulf Power Co., Florida PSC, Docket # E1 Mountain States Bell, Montana PSC, # Mountain States Bell, Arizona CC, #E Georgia Power, Georgia PSC, Docket # 3840-U, 1989 Rochester Telephone, New York PSC, Docket # 89-C-022 Noverco - Gaz Metro, Quebec Natural Gas PSC, #R GTE Northwest, Washington UTC, #U Orange & Rockland, New York PSC, Case 89-E-175 Central Illinois Light Company, ICC, Case Peoples Natural Gas, Pennsylvania PSC, Case Gulf Power, Florida PSC, Case # E1 ICG Utilities, Manitoba BPU, Case 1989 New Tel Enterprises, CRTC, Docket MO-15 Peoples Gas Systems, Florida PSC Jersey Central Pwr & Light, N.J. PUB, Case ER Alabama Gas Co., Alabama PSC, Case Trans-Quebec Maritime Pipeline, Cdn. Nat'l Energy Board Mountain Bell, Utah PSC,

14 Exhibit RAM- I Page 13 of 20 Mountain Bell, Colorado PUB South Central Bell, Louisiana PS Hope Gas, West Virginia PSC Vermont Gas Systems, Vermont PSC Alberta Power Ltd., Alberta PUB Ohio Utilities Company, Ohio PSC Georgia Power Company, Georgia PSC Sun City Water Company Havasu Water Inc. Centra Gas (Manitoba) Co. Central Telephone Co. Nevada AGT Ltd., CRTC 1992 BC GAS, BCPUB 1992 California Water Association, California PUC 1992 Maritime Telephone 1993 BCE Enterprises, Bell Canada, 1993 Citizens Utilities Arizona gas division 1993 PSI Resources CILCORP gas division 1994 GTE Northwest Oregon 1993 Stentor Group Bell Canada PSI Energy 1993, 1994,1995,1999 Cincinnati Gas & Electric 1994, 1996, 1999, 2004 Southern States Utilities, 1995 CILCO 1995,1999,2001 Commonwealth Telephone 1996

15 Exhibit RAM- 1 Page 14 of 20 Edison International 1996, 1998 Citizeins Utilities 1997 Stentor Companies 1997 Hydro-Quebec 1998 Entergy Gulf States Louisiana 1998, 1999, 2001, 2002,2003 Detroit Edison, 1999,2003 Entergy Gulf States, Texas, 2000, 2004 Hydro Quebec TransEnergie, 2001,2004 Sierra Pacific Company, 2000,2001,2002 Nevada Power Company, 2001 Mid American Energy, 2001,2002 Entergy Louisiana Inc. 2001, 2002, 2004 Mississippi Power Company, 2001, 2002 Oklahoma Gas & Electric Company, Public Service Electric & Gas, 2001,2002 NU1 Corp (Elizabethtown Gas Company), 2002 Jersey Central Power & Light, 2002 San Diego Gas & Electric, 2002 NB Power, 2002 Entergy New Orleans, 2002 Hydro-Quebec Distribution 2002 PSI Energy 2003 Fortis - Newfoundland Power & Light 2002 Emera - Nova Scotia Power 2004 Hydro-Quebec TransEnergie 2004 Hawaiian Electric 2004 Missouri Gas Energy 2004

16 Exhibit RAM- I Page 15 of 20 AGL Resources 2004 PROFESSIONAL AND LEARNED SOCIETIES - Engineering Institute of Canada, Canada Council Award, recipient 1971 and Canadian Association Administrative Sciences, American Association of Decision Sciences, American Finance Association, Financial Management Association, ACTIVITIES IN PROFESSIONAL ASSOCIATIONS AND MEETINGS - Chairman of meeting on "New Developments in Utility Cost of Capital", Southern Finance Association, Atlanta, Nov Chairman of meeting on "Public Utility Rate of Return", Southeastern Public Utility Conference, Atlanta, Oct Chairman of meeting on "Current Issues in Regulatory Finance", Financial Management Association, Atlanta, Oct Chairman of meeting on "Utility Cost of Capital", Financial Management Association, Toronto, Canada, Oct Committee on New Product Development, FMA, Discussant, "Tobin's Q Ratio", paper presented at Financial Management Association, New York, N.Y., Oct Guest speaker, "Utility Capital Structure: New Developments", National Society of Rate of Return Analysts 18th Financial Forum, Wash., D.C. Oct. 1986

17 Exhibit RAM- 1 Page 16 of 20 - Opening address, "Capital Expenditures Analysis: Methodology vs Mythology," Bellcore Economic Analysis Conference, Naples Fla., PAPERS PRESENTED: "An Empirical Study of Multi-Period Asset Pricing," annual meeting of Financial Management Assoc., Las Vegas Nevada, "Utility Capital Expenditures Analysis: Net Present Value vs Revenue Requirements", annual meeting of Financial Management Assoc., Denver, Colorado, October "Intervention Analysis and the Dynamics of Market Efficiency", annual meeting of Financial Management Assoc., San Francisco, Oct "Intertemporal Market-Line Theory: An Empirical Study," annual meeting of Eastern Finance Assoc., Newport, R.I "Option Writing for Financial Institutions: A Cost-Benefit Analysis", 1979 annual meeting Financial Research Foundation "Free-lunch on the Toronto Stock Exchange", annual meeting of Financial Research Foundation of Canada, "Simulation System Computer Software SIMFIN", HP International Business Computer Users Group, London, "Inflation Accounting: Implications for Financial Analysis." Institute of Certified Public Accountants Symposium, OFFICES IN PROFESSIONAL ASSOCIATIONS - President, International Hewlett-Packard Business Computers Users Group, Chairman Program Committee, International HP Business Computers Users Group, London, England, Program Coordinator, Canadian Assoc. of Administrative Sciences, Member, New Product Development Committee, Financial

18 Exhibit RAM- 1 Page 17 of 20 Management Association, Reviewer: Journal of Financial Research Financial Management Financial Review Journal of Finance PUBLICATIONS "Risk Aversion Revisited", Journal of Finance, Sept "Hedging Regulatory Lag with Financial Futures," Journal of Finance, May (with G. Gay, R. Kolb) "The Effect of CWIP on Cost of Capital," Public Utilities Fortnightly, July "The Effect of CWIP on Revenue Requirements" Public Utilities Fortnirrhtlv, August "Intervention Analysis and the Dynamics of Market Efficiency," Time-Series Applications, New York: North Holland, (with K. El-Sheshai) "Market-Line Theory and the Canadian Equity Market," Journal of Business Administration, Jan. 1982, M. Brennan, editor "Efficiency of Canadian Equity Markets," International Management Review, Feb "Intertemporal Market-Line Theory: An Empirical Test," Financial Review, Proceedings of the Eastern Finance Association, BOOKS Utilities' Cost of Capital, Public Utilities Reports Inc., Arlington, Va., Regulatory Finance, Public Utilities Reports Inc., Arlington, Va., 1994.

19 Exhibit RAM- 1 Page 18 of 20 Driving Shareholder Value, McGraw-Hill, January The New Regulatory Finance, forthcoming MONOGRAPHS Determining Cost of Capital for Regulated Industries, Public Utilities Reports, Inc., and The Management Exchange Inc., (with V.L. Andrews) Alternative Regulatory Frameworks, Public Utilities Reports, Inc., and The Management Exchange Inc., (with V.L. Andrews) Risk iind Return in Capital Projects, The Management Exchange Inc., (with B. Deschamps) Utility Capital Expenditure Analysis, The Management Exchange Inc., Regulation of Cable Television: An Econometric Planning Model, Quebec Department of Communications, An Economic & Financial Profile of the Canadian Cablevision Industry, Canadian Radial-Television & Telecommunication Commission (CRTC), Computer Users Manual: Finance and Investment Programs, University of Montreal Press, 1974, revised Fiber Optics Communications: Economic Characteristics, Quebec Department of Communications, Canadian Equity Market Inefficiencies, Capital Market Research Memorandum, Garmaise & Thomson Investment Consultants, MISCELLANEOUS CONSULTING REPORTS Operational Risk Analysis: California Water Utilities, Calif. Water Association, Cost of Capital Methodologies for Independent Telephone Systems, Ontario Telephone Service Commission, March 1989.

20 Exhibit RAM- 1 Page 19 of 20 "The Effect of CWIP on Cost of Capital and Revenue Requirements", Georgia Power Company, "Costing Methodology and the Effect of Alternate Depreciation and Costing Methods on Revenue Requirements and Utility Finances", Gaz Metropolitan Inc., "Simulated Capital Structure of CN-CP Telecommunications: A Critique", CRTC, "Telecommunications Cost Inquiry: Critique",CRTC, "Social Rate of Discount in the Public Sector", CRTC Policy Statement, "Technical Problems in Capital Projects Analysis", CRTC Policy Statement, RESEARCH GRANTS "Econometric Planning Model of the Cablevision Industry", International Institute of Quantitative Economics, CRTC. "Application of the Averch-Johnson Model to Telecommunications Utilities", Canadian Radio-Television Commission. (CRTC) "Ecoriomics of the Fiber Optics Industry", Quebec Dept. of Communications. "Intervention Analysis and the Dynamics of Market Efficiency", Georgia State Univ. College of Business, "Firm Size and Beta Stability", Georgia State University College of Business, "Risk Aversion and the Demand for Risky Assets", Georgia State University College of Business, Chase Econometrics, Interactive Data Corp., Research Grant, $50,000 per annum,

21 Exhibit RAM- 1 Page 20 of 20 UNIVERSITY SERVICE University Senate, elected departmental senator , Faculty Affairs Committee, elected departmental representative Professional Continuing Education Committee member Director Master in Science (Finance) Program Course Coordinator, Corporate Finance, MBA program - Chairman, Corporate Finance Curriculum Committee - Executive Education: Departmental Coordinator 2000

22 Exhibit RAM-2 Page 1 of 3 NATURAL GAS DISTRIBUTION UTILITIES BETA ESTIMATES Company 1 AGL Resources 2 AmeriGas Partners 3 Atmos Energy 4 Energen Corp. 5 KeySpan Corp. 6 Laclede Group 7 New Jersey Resources 8 NICOR Inc. 9 Northwest Nat. Gas 10 Peoples Energy 11 Piedmont Natural Gas 12 Southern Union 13 Southwest Gas 14 UGI Corp. 15 WGL Holdings Inc. GAS D I STR GAS D I STR GASDISTR GAS D I STR GASDISTR GASD I SIR GASDl STR GASDl STR GASDl STR GASDISTR GASD ISTR GASDISTR GAS D I STR GASD I STR GASDISTR Beta oo AVERAGE Source: Value Line Analyzer

23 Exhibit RAM-2 Page 2 of 3 COMBINATION GAS & ELEC UTILITY BETA ESTIMATES Company Name 1 Alliant Energy 2 Ameren Corp. 3 Aquila Inc. 4 Avista Corp. 5 Centerpoint Energy 6 CH Energy Group 7 Cinergy Corp. 8 CMS Energy Corp. 9 Consol. Edison 10 Constellation Energy 11 Dominion Resources 12 DTE Energy 13 Duke Energy 14 Energy East Corp. 15 Entergy Corp. 16 Exelon Corp. 17 MDU Resources 18 MGE Energy 19 NiSource Inc. 20 Northeast Utilities 21 NSTAR 22 Pepco Holdings 23 PNM Resources 24 PPLCorp. 25 Public Sew. Enterprise 26 Puget Energy Inc. 27 SCANA Corp. 28 Sempra Energy 29 TECO Energy 30 TXU Corp. 31 Vectren Corp. 32 Wisconsin Energy 33 WPS Resources 34 Xcel Energy Inc. Beta oo 0.70 AVERAGE 0.82 Source: Value Line Investment Analyzer

24 Exhibit RAM-2 Page 3 of 3 VALUE LINE ELECTRIC UTILITIES BETA ESTIMATES Company Name Beta 1 Allegheny Energy 2 ALLETE 3 Alliant Energy 4 Anier. Elec. Power 5 Anieren Corp. 6 Aquila Inc. 7 Avista Cop. 8 Black Hills 9 Cen. Vermont Pub. Se 10 CenterPoin! Energy 11 CH Energy Group 12 Cinergy Corp. 13 Cleco Corp. 14 CMS Energy Corp. 15 Consol. Edison 16 Constellation Energy 17 Dominion Resources 18 DPL Inc. 19 Duquesne Light Hldgs 20 DTE Energy 21 DukeEnergy 22 Edison lnll 23 El Paso Electric 24 Empire Dist. Elec. 25 Energy East Cop. 26 Entergy Corp. 27 Exelon Corp. 28 FirstEnergy Corp. 29 Flcirida Public Utilities 30 FPL Group 31 Gt Plains Energy 32 Green Mountain Pwr. 33 Hawaiian Elec. 34 IDACORP Inc. 35 Maine & Maritimes Co 36 MDU Resources 37 MGE Energy 38 Ni!jource Inc. 39 Northeast Utilities 40 Northwestern Corp. 41 NSITAR 42 OGE Energy 43 Otter Tail Cop. 44 Pepco Holdings 45 PGBE Corp. 46 Pinnacle West Capital 47 PNM Resources 48 PPL Corp. 49 Progress Energy 50 Public Sew. Enterpris 51 Puget Energy Inc. 52 SCANA Corp. 53 Sempra Energy 54 Sierra Pacific Res. 55 Southern Co. 56 TECO Energy 57 mu Corp. 58 UIL Holdings 59 UniSource Energy 60 UNlTlL Corp. 61 Vectren Corp. 62 Westar Energy 63 Wisconsin Energy 64 WPS Resources 65 Xcel Energy Inc oo oo AVERAGE 0.81 Source: Value Line Investment Analyzer W20W

25 Exhibit RAM-3 Page 1 of 1 MOODY3 NATURAL GAS DISTRIBUTION COMMON STOCKS OVER LONG-TERM TREASURY BONDS ANNUAL LONG-TERM RISK PREMIUM ANALYSIS Year MdYs Long-Term 20 year Governmen. Maturity Natural Gas Bond Distribution Capital Stock Equity Bond Bond Total stock Gain/( Loss) Total Risk YLelrt ~CainllosS~Betum l n d. e x ~ - w m - (6) % 1.OOO % % % 1, % % % 1, % % % % % % % % % % % 1, % % %~ % %~ 1, % % % % % 1, % 1, % , % 1, % 1, % 1, % % 1, % % % 1, % % % (36) % (71.81) % % (81.99) % (85.35) % % (47.25) % % (29.65) % (8.04) % (35.36) % (6.52) % (120.99) % (48.62) % (96.00) % % % (2.31) % (132.91) % (34.67) % (44.37) % % (80.97) % (87.53) % (97.01) % (140.77) % (93.55) % % (76.88) % % % % (118.83) % % % (26.83) % % % % (143.60) % % (76.33) % % % (151.59) % % % % 0.46% -8.68% 50.16% 2.27% 21.77% 34.74% -8.05% 5.21% 5.27% 5.28% 6.09% 4.29% 4.65% 4.02% 3.11% 8.19% 3.65% 5.60% 3.56% -5.76% 3.63% % 4.06% -5.63% 5.12% 6.56% 5.57% % 5.45% 19.26% 6.86% -8.54% 5.87% 11.87% 6.52% % 6.13% % 7.69% 28.88% 11.71% 35.28% 9.66% -1.78% 7.59% -9.65% 8.22% 16.38% 966% 5.81% 8.75% -5.49% 9.04% -5.38% 10.07% 10.21% 10.96% 24.93% 10.54% 9.87% 8.92% 11.37% 5.73% -3.40% 56.25% 6.56% 26.42% 38.77% 4.94% 11.84% 9.16% -2.12% % -0.50% 12.12% % 26.12% -2.68% 18.39% % % 40.59% 44.95% 5.81% -1.43% 26.04% 16% 3.55% 4.69% 21.18% 35.47% 18.79% 12.11% 9.96% % 61.21% 11.28% 12.62% 39.69% % 10.85% 5.80% -2.82% % 7.04% 1 I.42% -7% 14.91% -16% 12.65% -5.46% % 37.43% 28.07% 6.70% -0.71% 26.76% 18.52% 0.92% % 17.92% 21.43% % % 7.46% 26.14% 4.08% % 6.62% -8.38% -4.39% % 8.16% 34.91% 7.58% -7.00% 5.84% 14.20% 6.42% 11.64% 5.74% 11.00% 5.26% % 3% 22.83% 5.95% 6.86% 7% 14% 1% -7.22% 4.26% -5.87% 4.64% 20.28% 4.93% 4.48% 4.10% 20.47% 42.50% -1.15% 20.62% 17.38% 16.26% % 28.78% 11.93% 19.46% -2.97% -1.23% 25.21% 8.58% 11.08% 23.34% -6.63% 0.29% 9.66% 1.03% 4.94% -1.a1 % 13.54% 3% % 8.51% 3.56% -3.29% MEAN 5.66% SourceMergent's (Moody's) Public Utility Manual 2002 December stcck prices and dividends Bond yields from lbbotson Assodates 2002 Yearbook Table B-9 Long-Term Government Bonds Yields December each year.

26 Exhibit RAM4 Page 1 of 3 MOODY'S ELECTRIC UTILITY COMMON STOCKS OVER LONG-TERM TREASURY BONDS ANNUAL LONG-TERM RISK PREMIUM ANALYSIS Year Moody's Long-Term 20 year Electric Government Maturity Bond Utility Capital Stock Equity Bond Bond Total Stock Gainl(Loss) Total Risk Yield Value Gain/Loss Interest Return Index Dividend % Growth Vield Return Premium (7) '7% 1, % 1, % (30.40) 31 S O 17.64% 0.11% % % 6.08% 4.95% -2.73% % % % %, Oh % 5.57% % % %, % % 6.27% 77.49% 71.96% %, % % 4.10% 19.47% 13.43% % (27.60) % % 4.18% % % %, % % 6.19% 19.84% 13.83% %, % a 4.72% 5.37% 10.09% 3.41 % %, % % 5.34% % % % (16.36) % % 6.48% % % % (66.03) % % 7% % 20.18% % (3.14) % % 8.96% 55.98% 53.84% I % 1, % % 6.24% 6.62% 3.82% % 1, % 31.I % 6.16% 53.82% 43.63% I ;!% (21.10) % % 9% 9.63% 9.75% % (48.87) % % 4.77% % % %, % % 6.25% 8.59% 5.21 % %, % % 6.34% 23.02% 16.09% % (24.07) % % 5.76% 6.54% 6.86% % 93 (69.25) % % 6.10% 15.97% 20.65% % (15.25) % % 5.64% 17.46% 16.29% % 1, % % 5.31 % 9.96% 6.40% % 1, % % 5.38% 25.45% 22.40% % (36) % % 4.65% 8.41 % 9.15% % (71.81) % % 4.70% 3.91 % 8.14% % 1, % % 4.96% 7.70% 1.03% % (81.99) % % 4.97% 36.92% 41.89% % (85.35) % % 3.93% 3.03% 7.74%

27 Exhibit RAM4 Page 2 of 3 MOODY'S ELECTRIC UTILITY COMMON STOCKS OVER LONG-TERM TREASURY BONDS ANNUAL LONG-TERM RISK PREMIUM ANALYSIS Moody's Long-Term 20 year Electric Government Maturity Bond Utility Capital Stock Equity Bond Bond Total Stock Gain/( Loss) Total Risk Year Value Gain/Loss interest Return Dividend %Growth Yield Return Premium (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) % 1, % % 4.07% 20.88% 7.08% % (47.25) % % 3.66% 32.95% 33.87% % 1, % % 2.99% 0.14% -6.76% % 4.23% 0%!5% (29.65) (8.04) (35.36) (6.52) % 3.37% 0.69% 3.85% % 12.93% -0.59% -7.72% 3.33% 3.35% 3.34% 3.58% 6Oh 16.28% 2.75% -4.14% 8.37% 12.92% 2.06% -7.99% % (120.99) % % 4.09% -3.26% 4.29% % (48.62) % u ~ % 8% 10.54% 9.84% % (96.00) % % 4.43% % % % 1, % 1, % % % -3.42% 5.55% 5.38% 10.25% 1.96% -0.96% % % (2.31) % % 5.69% 3.41 % -2.33% % (132.91) % % 5.99% % % % (34.67) % % 7.93% % % % (44.37) % % 12.07% 47.27% 44.10% % 1, % % 1% 28.40% 1 I.53% % 8.98% (80.97) % (87.53) % % % 8.36% 8.52% 11.22% -3.86% 12.11% -3.13% % 11.99% (97.01) % (140.77) % % % -3.53% 11.66% 2% 8.14% 5.54% 12.09% % (93.55) % % 12.84% 17.95% 15.32% % 1, % % 12.99% 35.82% 3.24% % (76.88) % % 11.20% 13.72% 10.46% % 1, % 1, % % % 11.47% 18.49% 10.74% 22.75% 29.23% 8.71 % -1.40% % 1, % % 6% 29.03% 2.80% % (118.83) % % 8.02% -9.06% -7% % 1, % % 9.41% 16.52% 7.14% % 1, % % 8.74% 30.12% 10.96%

28 Exhibit RAM4 Page 3 of 3 MOODY'S ELECTRIC UTILITY COMMON STOCKS OVER LONG-TERM TREASURY BONDS ANNUAL LONG-TERM RISK PREMIUM ANALYSIS Year Moody's Long-Term 20 year Electric Government Maturity Bond Utility Capital Stock Equity Bond Bond Total Stock Gain/(Loss) Total Risk Yield &I& Gain/Loss Interest Return Index Dividend %Growth Yield Return Premium (1) (2) 8.44% % 1, % 1, M% 1, % :3% 1, % % 1, % 1, % % 1, % (3) (4) (5) (26.83) % % % % (143.60) % % (76.33) % % % (151.59) % % (20.05) % (6) (7) (8) -3.88% 22.29% -2.06% 4.00% % 23.72% -3% 11% 16.51% % 65.40% -5.73% (9) 7.17% 7.60% 6.28% 6.37% 6.11% 7.84% 6.34% 6.66% 5.14% 4.44% 6.34% 3.77% (10) 3.30% 29.89% 4.23% 10.37% % 31.57% 1.51% 21.17% 21.65% % 71.74% -1.96% (11) -2.18% 9.55% -3.49% -6% -7.34% 0.98% 3.11% 6.25% 8.36% % 50.09% -5.54% Mean 5.55% Source:Mergent's (Moody's) Public Utility Manual 2002 December stock prices and dividends Dec. Bond yields from lbbotson Associates 2002 Yearbook Table 8-9 Long-Term Government Bonds Yields

29 Exhibit RAM-5 Page 1 of 1 NATURAL GAS LDCs DCF ANALYSIS: ANALYSTS' GROWTH FORECASTS Company Industry % Current Analysts Expected Cost of ROE Divid Growth Divid Equity Yield Forecast Yield (1) (2) (3) (4) (5) (6) 1 AGL Resources 2 Atmos Energy 3 Energen Corp. 4 KeySpan Corp. 5 Laclede Group 6 New Jersey Resources 7 NICOR Inc. 8 Northwest Nat. Gas 9 Peoples Energy 10 Piedmont Natural Gas 11 Southwest Gas 12 UGI Corp. 13 WGL Holdings Inc. GAS DI STR GAS Dl STR GASDISTR GAS D I ST R GAS DI STR GAS D I STR GASDl STR GASDISTR GAS D I ST R GASDl STR GAS D I STR GASDISTR GASDISTR AVERAGE Notes: Column 1, 2: Value Line Investment Survey for Windows, Column 3: Zacks long-term earnings growth forecast, Column 4 = Column 2 times (1 + Column 3/100) Column 5 = Column 4 + Column 3 Column 6 = (Column ) + Column 3

30 Exhibit RAM-6 Page 1 of 1 NATURAL GAS LDCs DCF ANALYSIS: VALUE LINE GROWTH FORECASTS Company Industry % Current Value Line Expected Cost of ROE Divid Proj Divid Equity Yield Growth Yield (1) (2) (3) (4) (5) (6) 1 AGL Resources GAS D I STR 2 Atmos Energy GASD I STR 3 Energen Corp. GASDISTR 4 KeySpan Corp. GASDISTR 5 Laclede Group GAS DI STR 6 New Jersey Resources GASDISTR 7 NICOR Inc. GASDISTR 8 Northwest Nat. Gas GASDISTR 9 Peoples Energy GASD I STR 10 Piedmont Natural Gas GASDISTR 11 Southwest Gas GASDISTR 12 UGI Corp. GASDISTR 13 WGL Holdings Inc. GASDISTR I AVERAGE Notes: Column 1, 2, 3: Value Line Investment Survey for Windows, Column 4 = Column 2 times (1 + Column 3/100) Column 5 = Column 4 + Column 3 Column 6 = (Column 4 /0.95) + Column 3 NICOR eliminated for negative growth rate

31 Exhibit RAM-7 Page 1 of 2 INVESTMENT-GRADE COMBINATION GAS & ELECTRIC UTILITIES DCF ANALYSIS: VALUE LINE GROWTH PROJECTIONS Company % Current Proj EPS % Expected Cost of ROE Divid Growth Divid Equity Yield Yield (1) (2) (3) (4) (5) 1 Alliant Energy 2 Avista Corp. 3 CH Energy Group 4 Cinergy Corp. 5 Constellation Energy 6 Dominion Resources 7 DTE Energy 8 Energy East Corp. 9 Entergy Corp. 10 Exelon Corp. 11 MDU Resources 12 MGE Energy 13 NiSource Inc. 14 Northeast Utilities 15 NSTAR 16 Pepccs Holdings 17 PPL Corp. 18 Public: Sew. Enterprise 19 Puget Energy Inc. 20 SCANA Corp. 21 Sempra Energy 22 TECO Energy 23 TXU Corp. 24 Vectren Corp. 25 Wisconsin Energy 26 WPS Resources 27 Xcel Energy Inc o o AVERAGE Notes: Column 1, 2: Value Line Investment Survey for Windows, Column 3 = Column 1 times (1 + Column 21100) Column 4 = Column 3 + Column 2 Column 5 = (Column ) + Column 2 No growth projection available for Ameren Companies with negative growth projections (Centerpoint, Con Ed, Duke, and PNM Rea were eliminated from the sample. No current dividend yield reported for Aquila, CMS Energy Shaded cells: DCF estimates less than cost of debt

32 Exhibit RAM-7 Page 2 of 2 INVESTMENT-GRADE COMBINATION GAS & ELECTRIC UTILITIES DCF ANALYSIS: VALUE LINE GROWTH PROJECTIONS Company % Current Proj EPS % Expected Cost of ROE Divid Growth Divid Equity Yield Yield (1) (2) (3) (4) (5) 1 Alliant Energy 2 Avista Cop. 3 Cinergy Cop. 4 Constellation Energy 5 Dominion Resources 6 DTE Energy 7 Entergy Corp. 8 Exelon Corp. 9 MDU Resources 10 MGE Energy 11 NiSource Inc. 12 Northeast Utilities 13 NSTAR 14 Pepco Holdings 15 PPL Corp. 16 Public Serv. Enterprise 17 Puget Energy Inc. 18 SCANA Corp. 19 Sempra Energy 20 TECO Energy 21 Txucorp. 22 Vectren Corp. 23 Wisconsin Energy 24 WPS Resources 25 Xcel Energy Inc o I AVERAGE Notes: Column 1, 2: Value Line Investment Survey for Windows, Column 3 = Column 1 times (1 + Column 2/100) Column 4 = Column 3 + Column 2 Column 5 = (Column ) + Column 2 No growth projection available for Ameren Companies with negative growth projections (Centerpoint, Con Ed, Duke, and PNM Re: were eliminated from the sample. No current dividend yield reported for Aquila, CMS Energy CH Energy and Energy East eliminated: DCF estimates less than cost of debt

33 Exhibit RAM8 Page 1 of 2 INVESTMENT-GRADE COMBINATION GAS & ELECTRIC UTILITIES DCF ANALYSIS: ANALYSTS' GROWTH FORECASTS Company % Current Analysts' % Expected Cost of ROE Divid Growth Divid Equity Yield Forecast Yield 1 Alliant Energy 2 Ameren Corp. 3 Avista Corp. 4 Centerpoint Energy 5 CH Energy Group 6 Cinergy Corp. 7 Consol. Edison 8 Constellation Energy 9 Dominion Resources 10 DTE Energy 11 Duke Energy 12 Energy East Corp. 13 Entergy Cop. 14 Exelon Corp. 15 MDU Resources 16 MGE Energy 17 NiSource Inc. 18 Northeast Utilities 19 NSTAR 20 Pepco Holdings 21 PNM Resources 22 PPL cop. 23 Public Sew. Enterprise 24 Puget Energy Inc. 25 SCANA Corp. 26 Sempra Energy 27 TECC) Energy 28 TXU Corp. 29 Vedren Corp. 30 Wisconsin Energy 31 WPS Resources 32 Xcel Energy Inc AVERAGE Notes: Column 1: Value Line Investment Survey for Windows, 8M004 Column 2: Zacks long-term earnings growth forecast, 9/2004 Column 3 = Column 1 times (1 + Column 2100) Column 4 = Column 3 + Column 2 Column 5 = (Column ) + Column 2 No current dividend yield reported for Aquila, CMS Energy Shaded cells: DCF estimates less than cost of debt

34 Exhibit RAM-8 Page 2 of 2 INVESTMENT-GRADE COMBINATION GAS & ELECTRIC UTILITIES DCF ANALYSIS: ANALYSTS GROWTH FORECASTS Company %Current Analysts %Expected Costof ROE Divid Growth Divid Equity Yield Forecast Yield (1) (2) (3) (4) (5) 1 Alliant Energy 2 Ameren Corp. 3 Avista Corp. 4 Centerpoint Energy 5 Cinergy Corp. 6 Consol. Edison 7 Constellation Energy 8 Dominion Resources 9 DTE Energy 10 Duke Energy 11 Energy East Corp. 12 Entergy Corp. 13 Exelon Corp. 14 MDU Resources 15 NiSource Inc. 16 Northeast Utilities 17 NSTAR 18 Pepco Holdings 19 PNM Resources 20 PPL Corp. 21 Public Sew. Enterprise 22 Puget Energy Inc. 23 SCANA Corp. 24 Sempra Energy 25 TECO Energy 26 TXU Corp. 27 Vectren Cop. 28 Wisconsin Energy 29 WPS Resources 30 Xcel Energy Inc I AVERAGE Notes: Column 1 : Value Line Investment Survey for Windows, Column 2: Zacks long-term earnings growth forecast, 9/2004 Column 3 = Column 1 times (1 + Column 2/100) Column 4 = Column 3 + Column 2 Column 5 = (Column 3 /0.95) + Column 2 No current dividend yield reported for Aquila, CMS Energy CH Energy and MGE eliminated: DCF estimates less than cost of debt

35 Exhibit RAM-9 Page 1 of 1 NATURAL GAS DISTRIBUTION UTILITIES COMMON EQUITY RATIOS Company 1 AGL Resources 2 AmeriGas Partners 3 Atmos Energy 4 Energen Cow. 5 KeySpan Corp. 6 Laclede Group 7 New Jersey Resources 8 NICOR Inc. 9 Northwest Nat. Gas 10 Peoples Energy 11 Piedmont Natural Gas 12 Southern Union 13 Southwest Gas 14 UGI Corp. 15 WGL Holdings Inc. AVERAGE MEDIAN GAS D ISTR GASD ISTR GASDISTR GASD I STR GASD I STR GASDISTR GASDISTR GASDISTR GASD ISTR GASDl STR GASDISTR GASD ISTR GAS D ISTR GASD I STR GASD I STR % Common Equity so Source: Value Line Investment Survey Analyzer

36 CERTIFICATE OF SERVICE I certify that a copy of the foregoin document has been delivered to all parties of record by first-class mail, postage prepaid, this 29 ti day of December 2004.