In This Report:

ACI ATP ATPG BKH CPA CPN CV EROC ETE FE FTS NI SUG WMB

July 12, 2011

Underwriting & Financial Restructuring
FirstEnergy and its subsidiaries lined up aggregate credit commitments of $4.5 billion. Hydro-Quebec issued a billion-dollar bond issue at 2% interest. NiSource sold $400 million in 30-year notes at 5.95% interest. Central Vermont Public Service, Calpine, Black Hills Corp. and oil and gas companies participated in the capital markets.

Mergers & Acquisitions

Central Vermont Public Service is being sought by two major Canadian utilities: Gaz Mtro, which also owns the other investor-owned utility in Vermont, made an unsolicited bid for the company. This put on hold an agreement for Fortis Inc. to acquire Central Vermont PS. Arch Coal and International Coal Group completed their merger, just two weeks after Alpha Natural Resources closed on its acquisition of Massey Energy. Energy Transfer Equity outbid the Williams Cos. for Southern Union Co.

Stocks and Commodities

The Rudden Composite Index gained 0.96% for June, with all categories showing gains. Master Limited Partnerships gained 2.8%, the strongest performance. The Merchant Electric group was the second best, gaining 1.6%. The S&P 500 Index gained 0.46% for June. The Rudden Index gained 21.5% for the 52 weeks ended June 30, compared to the gain in the S&P 500 of 28.1%. All categories gained for the 52 weeks; Natural Gas T&D-Diversified had the strongest gain, up 31.2%. Regulated Transmission & Distribution-Gas and Electric, was up 25.6%. The Dow Jones Industrial Average ended June at 12,414.34, up 27% or 2,640.32 points compared to the end of June 2010. The DJIA lost 1.2% or 155.45 points for the month from 12,569.79 at the end of May. Gold spot month futures prices showed volatility on the New York Mercantile Exchange, with prices dropping $52.40 over two days, June 23 and 24, but also showing gains of $8 or $10 on other days. At months end, spot gold settled at $1,502.30, down by $40.10 per ounce from June 1. Silver opened June at $37.689/oz. for the spot month contract and ended the month at $34.812/oz. Light sweet crude oil ended June at $95.42/bbl. for the spot month futures contract; the natural gas spot month futures contract was $4.37/mmBtu; Central Appalachian coal was $77.63/ton.

Editors:
Samuel Glasser Maggie Arecco-Stanco 631-348-4090 William Kemp, Vice President
Address correspondence to newsletters@bv.com

Values 06/30/11

S&P Composite Index Master Limited Partnerships (MLPs) Natural Gas T&D (Diversified) Regulated T&D (Gas & Electric) Electric (Merchant) Regulated Electric (Integrated) Electric (Diversified)

1,320.64 97.66 130.46 113.05 112.53 74.81 95.94 84.64

Monthly Change from 06/01/11 0.46% 0.96% 2.76% 1.07% 0.74% 1.61% 0.03% 0.81%

Annual Change from 06/30/10 28.1% 21.5% 17.8% 31.2% 25.6% 7.8% 16.6% 13.2%

52 Week High

Change All-Time from 52 High Since Week High 01/03/07 (3.2%) (0.7%) (4.8%) (1.2%) (2.1%) (2.3%) (2.4%) (1.3%) 1,565.15 115.44 137.06 124.46 114.94 158.58 106.95 126.65

Change from AllTime High (15.6%) (15.4%) (4.8%) (9.2%) (2.1%) (52.8%) (10.3%) (33.2%)

1,363.61 98.34 137.06 114.42 114.94 76.61 98.29 85.79

Underwriting & Financial Restructuring

FE FirstEnergy Corp. and Subsidiaries Have Credit Commitments of $4.5 Billion FirstEnergy Corp. and subsidiaries entered into two new five-year syndicated revolving credit facilities with aggregate commitments of $4.5 billion, the company reported in an 8K Report filed with the U.S. Securities and Exchange Commission on June 22. The credit facility is dated June 17. An aggregate amount of $2 billion is available, with separate borrowing limits, to each corporate unit FirstEnergy, Cleveland Electric Illuminating Co., Metropolitan Edison Co., Ohio Edison Co., Pennsylvania Power Co., Toledo Edison Co. American Transmission Systems Inc., Jersey Central Power & Light Co., Monongahela Power Co., Pennsylvania Electric Co., Potomac Edison Co., and West Penn Power. The Royal Bank of Scotland plc, is the administrative agent for the group of 27 banks. An additional $2.5 billion is available to FirstEnergy Solutions Corp. and Allegheny Energy Supply Co. LLC with JPMorgan Chase Bank, acting as administrative agent. Commitments under each of the new facilities will be available until June 17, 2016, unless the lenders agree to up to two additional one-year extensions. Hydro-Qubec Launches Billion-Dollar Bond Issue at Very Favorable Interest Hydro-Qubec negotiated a new bond issue of US$1 billion, Series JO, maturing on June 30, 2016. The debentures are guaranteed by Qubec and will bear interest at 2%. The debentures are dated June 30, 2011, the company said on June 23. The debentures will be distributed simultaneously on the American, Canadian, European and Asian markets by an international group of underwriters. It is Hydro-Qubecs second U.S. dollar global issue and its first issue in U.S. currency since 2001. CV Vermont Utility Issues Bonds Under 6% Central Vermont Public Service Corp. (NYSE: CV) on June 15 issued $40 million in aggregate principal amount of its first mortgage 5.89% bonds, Series WW, due June 15, 2041. The bonds have been issued as contemplated under the bond purchase agreement among the company and Metropolitan Life Insurance Co. and its affiliates dated as of February 4, 2011.
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NI NiSource Issues $400 Million of 30-Year Notes NiSource Inc. (NYSE: NI) said on June 10 that its finance subsidiary, NiSource Finance Corp., has completed the sale in an underwritten public offering of $400 million aggregate principal amount of 5.95% notes, due 2041. NiSource says it will fully and unconditionally guarantee NiSource Finance's obligations. NiSource Finance intends to use the net proceeds from the sale of the notes to repay short-term bank borrowings under its revolving credit facility.

CPN

Calpine, GE Complete $844.5 Million Power Plant Financing For New Generation in San Francisco Bay Area Calpine Corp. (NYSE:CPN) and General Electric Co.s (NYSE: GE) GE Energy Financial Services unit obtained an $844.5 million credit facility to finance construction of the 619 megawatt, combined cycle Russell City Energy Center in Hayward, Calif., the companies said June 27. The power plant, now under construction, was the nation's first to receive a federal air permit that includes a voluntary limit on greenhouse gas emissions, the companies said. The project finance facility includes a construction loan that will convert to a 10-year term loan when commercial operations begin, expected in mid-2013. The construction loan and term loan facility will initially be priced at LIBOR plus 2.25%. The loan facility is non-recourse to Calpine and GE Energy Financial Services. It was jointly arranged by MUFG Power & Utilities Group; ING Capital LLC; Lloyds Bank Corporate Markets; BMO Capital Markets and CoBank, ACB, Calpine said. Pacific Gas and Electric has agreed to purchase the full output of electricity from Russell City upon completion and will supply natural gas fuel to the plant under a 10-year power purchase agreement approved by the California Public Utilities Commission in September 2010. The facility is expected to play a critical role in meeting the Bay Area's power needs as older, emissions-intensive plants shut down and in supporting the integration of renewable energy projects into California's power grid. A Calpine affiliate owns 75% of Russell City and a GE Energy Financial Services affiliate owns 25%. CPN Calpine Closes on a Senior Secured Term Loan Refinancing Project Debt For Two Plants at Attractive Rates Calpine Corp. (NYSE: CPN) announced on June 17 that it closed on a $360 million first lien senior secured term loan. The loan amortizes at a rate of 1% per year and bears interest at LIBOR plus 3.25% per annum, subject to a LIBOR floor of 1.25%, and matures in 2018. Calpine utilized the proceeds of the term loan to retire credit agreements totaling $340.4 million belonging to its subsidiaries Deer Park Energy Center, LLC, and Metcalf Energy Center, LLC. The refinanced project debt pertains to two of Calpines natural gas-fired, combined cycle power plants. The Deer Park Energy Center in Deer Park, Texas, commenced commercial operations in June 2003, has 1,001 megawatts of electricity capacity and supplies steam to Shell Chemical L.P. The Metcalf Energy Center in San Jose, Calif., began commercial operations in June 2005 and can deliver up to 605 megawatts of energy. BKH Black Hills Corp. Closes $150 Million One Year Term Loan Black Hills Corp. (NYSE: BKH), on June 24 announced the closing of a $150 million, one-year, unsecured, singledraw, term loan with CoBank, Scotia Bank and U.S. Bank. The cost of borrowing under the loan is based on a spread of 125 basis points over LIBOR, Black Hills said. This loan captures the benefits of low short-term interest rates now extant in the marketplace and reduces overall short-term borrowing costs, Tony Cleberg, Black Hills executive vice president and chief financial officer said.
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Black Hills intends to use the term loan proceeds to reduce borrowings under its revolving credit facility. Black Hills is based in Rapid City, S.D. It serves 762,000 natural gas and electric utility customers in Colorado, Iowa, Kansas, Montana, Nebraska, South Dakota and Wyoming. The companys non-regulated businesses generate wholesale electricity, produce natural gas, oil and coal, and market energy. ATPG ATP Expands and Closes $172.5 Million Public Offering of 8.0% Convertible Perpetual Preferred Stock ATP Oil & Gas Corp. (NASDAQ: ATPG) of Houston announced on June 20 that it has increased and closed its previously announced public offering of Series B 8.0% convertible perpetual preferred stock. Prior to this placement closing and pursuant to the underwriting agreement, the underwriters exercised their option to purchase 225,000 additional shares of convertible perpetual preferred stock to cover over-allotments. The exercise of the over-allotment expanded the transaction from 1.5 million shares to 1.725 million shares. ATP Oil & Gas is engaged in the development and production of oil and natural gas in the offshore Gulf of Mexico, Mediterranean Sea and the North Sea. EROC Eagle Rock Announces $675 Million Credit Facility and Update to Hedge Portfolio Eagle Rock Energy Partners, L.P. (NASDAQ: EROC) of Houston entered into a five-year senior secured credit facility with a syndicate of banks; the initial commitments totaled $675 million, with the ability to increase commitments up to $1.2 billion. The facility, which matures in June 2016, replaces Eagle Rock's former senior secured credit facility, which was scheduled to mature in December 2012. The syndicate is led by Wells Fargo, N.A. as administrative agent, Bank of America, N.A. and Royal Bank of Scotland plc as co-syndication agents, and BNP Paribas as documentation agent. The company announced the new credit facility on June 22. In conjunction with the credit facility refinancing, Eagle Rock restructured certain commodity hedges to remove as counterparties two institutions not continuing as lenders under the credit facility. It also restructured certain interest rate hedges to rebalance its fixed versus floating interest rate exposure following the issuance of the fixed-rate senior notes in May. The partnership is engaged in gathering and transporting natural gas, fractionating and transporting natural gas liquids; and marketing natural gas, condensate and natural gas liquids; and oil and gas exploration and production.

Mergers & Acquisitions

CV/FTS Regulated Vermont Utility Is in Play; Control of Both Vermont IOUs Is at Stake At the end of May, Central Vermont Public Service (NYSE: CV), the largest utility in the state, and Fortis Inc. (TSX: FTS), the largest investor-owned utility in Canada, struck an agreement that would have Fortis acquire the U.S. utility for $35.10 per share. The deal included Fortis taking on Central Vermonts $230 million in debt. Then, on June 23, Gaz Mtro Limited Partnership, the main gas utility in Quebec, made an unsolicited proposal to acquire all of Central Vermonts outstanding common shares for $35.25 per share in cash. Gaz Mtro already owns the other investor owned utility in the state, Green Mountain Power Corp., having made that acquisition in 2007 through its subsidiary, Northern New England Energy Corp. It is through the U.S. subsidiary that Gaz Mtro also made its solicitation for Central Vermont PS. The Central Vermont PS board of directors said on June 27 that it had authorized discussions with Gaz Mtro regarding the proposal. Central Vermont PS said in a press release that its board had determined that the Gaz Mtro proposal is reasonably likely to lead to a superior proposal. The transaction would create the largest electricity distributor in Vermont serving nearly 250,000 customers, the companies said.

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Central Vermont said if it terminates the agreement with Fortis, it would be required to pay Fortis a total of approximately $19.5 million, including expenses. Fortis is the largest investor-owned distribution utility in Canada, serving more than 2 million gas and electricity customers. Its regulated holdings include electric utilities in five Canadian provinces and two Caribbean countries and a natural gas utility in British Columbia. Fortis owns non-regulated hydroelectric generation assets across Canada and in Belize and upper New York State. It also owns hotels and commercial real estate in Canada. Gaz Mtro is Quebec's leading regulated natural gas distributor with 182,000 customers in Quebec and 138,000 customers in Vermont. ACI Arch-ICG Merger Completed; Comes Right after Alpha-Massey Arch Coal, Inc. (NYSE: ACI), St. Louis, completed its acquisition of International Coal Group, Inc. (NYSE: ICO) on June 15, the company announced, with ICG becoming a subsidiary of Arch. Prior to the merger, Arch acquired approximately 92% of ICG's outstanding shares of common stock in connection with its previously disclosed tender offer. The aggregate value of the transaction totaled $3.4 billion. It was the second major coal acquisition during June. Alpha Natural Resources completed its acquisition of Massey on June 1. The acquisition extends Arch's reach into every major U.S. coal supply basin, said Steven F. Leer, Arch chairman and chief executive officer. With expected pro forma metallurgical sales of 11 million tons in 2011, Arch becomes the second largest U.S. metallurgical coal producer and a top 10 global met coal supplier. The acquisition also adds nearly 13 million tons of low-cost Appalachian thermal production to Arch's domestic thermal coal portfolio, solidifying the company's No. 2 position among U.S.-based coal mining companies. The company has dedicated throughput capacity, logistics capabilities and strategic relationships that can be used to expand export shipments via the U.S. East Coast, West Coast and Gulf of Mexico to further penetrate global growth markets. Upon integration, Arch will operate 24 mining complexes across five U.S. coal supply basins. ETE/SUG/WMB Energy Transfer Equity Outbids Williams to Acquire Southern Union Co Energy Transfer Equity, LP (NYSE:ETE) saw the Williams Cos $39 per share offer for Southern Union Co. and then raised it to $40, apparently winning the short-lived bidding war for the natural gas pipeline operator. Energy Transfer and Southern Union announced on July 5 that they entered into an amended and restated merger agreement under which ETE will acquire SUG for $8.9 billion, including $5.1 billion in cash and ETE common units. Under the terms of the revised agreement, approved by both boards, SUG shareholders can elect to exchange their common shares for $40 in cash or 0.903 ETE common units. The maximum cash component is 60% of the aggregate consideration and the common unit component can fluctuate between 40% and 50%. Elections in excess of either the cash or common unit limits will be subject to proration. The revised purchase price represents a significant increase in value being paid to SUG shareholders and more than a 42% premium to the closing price of SUG common stock on June 15, 2011, the last trading day prior to the announcement of the original merger agreement. Energy Transfer made a bid to acquire Southern Union for the equivalent of $33 per share, the companies announced on June 16, but the Williams Cos. (NYSE: WMB) jumped in a week later with a proposal to acquire Southern Union for $39 per share in cash.

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The Southern Union board had originally entered into a definitive merger agreement with Energy Transfer Equity, but it was announced on June 28 that the special committee of the board authorized Southern Union to enter into discussions with Williams. The Southern Union board has now decided to go with Energy Transfers higher offer. Southern Union, of Houston, is a diversified natural gas company, engaged primarily in the transportation, storage, gathering, processing and distribution of natural gas. The company owns and operates one of the nations largest natural gas pipeline systems with more than 20,000 miles of gathering and transportation pipelines and one of North Americas largest liquefied natural gas import terminals, along with serving more than half a million natural gas end-use customers in Missouri and Massachusetts. Williams, of Tulsa, Okla., is an integrated natural gas company focused on exploration and production, midstream gathering and processing, and interstate natural gas transportation primarily in the Rocky Mountains, Gulf Coast, Pacific Northwest, Eastern Seaboard and the Marcellus Shale in Pennsylvania. Most of the company's interstate gas pipeline and midstream assets are held through its 75% ownership interest (including the general-partner interest) in Williams Partners L.P. (NYSE: WPZ), a leading diversified master limited partnership. Energy Transfer Equity is a publicly traded partnership which owns the general partner and 100% of the incentive distribution rights of Energy Transfer partners and Regency Energy Partners. Energy Transfer Partners, L.P.(NYSE: ETP) is a publicly traded partnership owning and operating a diversified portfolio of energy assets including more than 17,500 miles of gathering and transportation pipelines, treating and processing assets, and three storage facilities located in Texas. ETP also holds a 70 percent interest in Lone Star NGL LLC, a joint venture that owns and operates NGL storage, fractionation and transportation assets in Texas, Louisiana and Mississippi. ETP is also one of the three largest retail marketers of propane in the United States, serving more than 1million customers across the country. Regency Energy Partners LP (NASDAQ: RGNC) is a midstream energy partnership engaged in the gathering, contract compression, processing, marketing and transporting of natural gas and natural gas liquids; it also owns the remaining 30% interest in Lone Star. ATP/AT/CPA Atlantic Power Corporation Agrees to Acquire Capital Power Income LP ; Creates a Contracted Power Generation Platform Atlantic Power Corp. (TSX: ATP) (NYSE: AT) of Boston and Capital Power Income L.P. (TSX: CPA.UN) announced on June 20 that they entered into an arrangement agreement under which Atlantic Power will acquire all of the outstanding limited partnership units of Capital Power for C$19.40 per limited partnership unit, payable in cash or shares of Atlantic Power. The agreed price of C$19.40 represents a 4.1% premium to the Capital Power closing price of C$18.63 on June 17, and a 6.8% premium to the partnership's volume-weighted average trading price for the 30 days leading up to October 5, 2010, the day on which Capital Power announced it was undertaking a strategic review process, the company said. Atlantic Power owns and operates a diverse fleet of power generation and infrastructure assets in the United States selling electricity to utilities and other large commercial customers under long-term power purchase agreements which seek to minimize exposure to changes in commodity prices. Capital Powers portfolio includes 19 wholly-owned power generation assets located in Canada and the United States and a 50.15% interest in a power generation asset in Washington State. The companys assets have a total net generating capacity of 1,400 MW and more than 4 million pounds per hour of thermal energy. The merger is expected to be completed in the fourth quarter of 2011, the companies said. As a result of the transaction, Atlantic Power will emerge as a publicly traded, power generation and infrastructure company with a diversified portfolio of assets in the United States and Canada. The merger will increase the net generating capacity of the companys projects to approximately 2,116 MW from 871 MW. The combined portfolio of assets will consist of interests in 30 operational power generation projects across 11 states and two provinces, a
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53-MW biomass project under construction in Georgia, and an 84-mile, 500-kilovolt electric transmission line in California. Atlantic Power says it has obtained committed debt financing sufficient to enable it to pay the cash portion of the merger consideration, but plans to conduct public and/or private offerings of approximately C$423 million of debt and approximately C$200 million of equity prior to closing to fund the cash portion of the purchase price and to refinance certain existing short-term debt of CPILP.

Energy Market View

Crude Oil, Natural Gas, Coal Spot Month Futures Prices Dollars per Million Btus
Source: New York Mercantile Exchange and Black & Veatch

$28.00
WTI Crude Oil

$26.00
Natural Gas, Henry Hub

Peak oil, Jul 14,' 08, $24.90 mmBtu, $145.18/bbl At Jul '08 peaks, Gas:Oil approx 50 %

June 30, 2011

Coal, 74% of gas, Btu basis

$24.00 $22.00 $20.00 $18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00

CAPP Coal

$16.37
Peak gas Jul 3, '08, $13.58 Dec 24, 08 Gas:Oil =97.5%

($95.42/barrel)

Peak coal Jul 1, '08, $5.97/mmBtu; $143.25/ton

Oil low, Dec 19, '08, $33.87/bbl

$4.37 $3.23
($77.63/ton)

11/2/2007

11/2/2008

11/2/2009

11/2/2010

1/2/2007

3/2/2007

5/2/2007

7/2/2007

9/2/2007

1/2/2008

3/2/2008

5/2/2008

7/2/2008

9/2/2008

1/2/2009

3/2/2009

5/2/2009

7/2/2009

9/2/2009

1/2/2010

3/2/2010

5/2/2010

7/2/2010

9/2/2010

1/2/2011

3/2/2011

Crude Oil Prices Start June at $100, Dip, and Largely Recover June opened with spot month light sweet crude oil futures priced at $100 a barrel on the New York Mercantile Exchange, and drifting down into the mid-$90s. On June 23, prices fell by more than $4 per barrel in response to the unexpected announcement by the U.S. Department of Energy and International Energy Agency of the release of 60 million barrels from strategic inventories. The agencies said it was to make up for the loss of 1.5 million barrels per day of Libyan crude oil exports as the summer driving season was getting underway. The decision to release the oil was coordinated on several levels, including the Saudis, particularly after the June 8 decision by the Organization of Petroleum Exporting Countries not to increase production, which the Saudis wanted, said Michael Korn, an energy options trader in Princeton, NJ. Crude oil futures prices began recovering within a couple of days of the DOE-IEA announcement, and by July 7 were back above $98 per barrel.
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5/2/2011

Prices lost ground again by the end of the first full week of July on the release of an absolutely dismal U.S. jobs report. The U.S. Bureau of Labor Statistics reported that nationwide only 18,000 new jobs were created during the month of June, putting the unemployment rate at 9.2%. The April and May statistics were revised downward at the same time. The SPR (Strategic Petroleum Reserve) release was traded pretty much like any other market news in the futures market, Korn said. Prices fell, found support, and retreated. Since that time the market has been more focused on a tightening supply of North Sea Brent crude, and now the jobs report, he said. June ended with crude oil futures at $95.42 per barrel (the equivalent of $16.37 per million British thermal units or mmBtu), natural gas at $4.374 per mmBtu, and central Appalachian coal at $77.63 per ton, or $3.23 per mmBtu. The energy futures are priced at the delivery points specified by the futures contracts: Cushing, Okla., for light sweet crude oil; the Henry Hub at Erath, La., for natural gas; and barge loading points along a section of the Big Sandy River for Central Appalachian coal.

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Stock Performance
Composite Index DailyValues 30Jun10to30Jun11 (03Jan07=100)
100
S&P 500 CMRINDEX

01Jun11:96.7452WkHigh:98.3430 Jun11:97.6652WkLow:79.14Change: 0.96%

95

90

85

80

75

70 Jun10 Aug10 Sep10 Nov10 Dec10 Feb11 Mar11 May11 Jun11

CompositeIndex:Consistsof100energycompanies,whicharefurtherorganizedintosixsubcategoriesasshowninthe followinggraphs.

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 RegulatedElectric Integrated DailyValues 30Jun10to6/31/2011 (03Jan07=100)

100
Index

01Jun11:95.9152WkHigh:98.29 6/31/2011:95.9452WkLow:80.17 Change:0.03%

S&P 500

95

90

85

80

75

70 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Feb-11 Mar-11 May-11 Jun-11

RegulatedElectric(Integrated):Utilitiesinvolvedinthegeneration,transmissionanddistribution ofelectricityandnaturalgas;80%ormoreoftheirtotalassetsareregulated.

ALLETEInc. AlliantEnergy AmerenCorp. AmericanElectricPowerCo. AvistaCorp. CentralVermontPublicService ClecoCorp. CMSEnergyCorp. DPLInc. DTEEnergyCo. ElPasoElectricCo. EmpireDistrictElectricCo. GreatPlainsEnergy IDACORPInc. MGEEnergyInc

ALE LNT AEE AEP AVA CV CNL CMS DPL DTE EE EDE GXP IDA MGEE

NorthWesternCorp. NVEnergy PG&ECorp. PinnacleWestCapitalCorp. PNMResourcesInc. SCANACorp. SouthernCo. TECOEnergyInc. UILHoldingsCorp. UniSourceEnergyCorp. VectrenCorp. WestarEnergyInc. WisconsinEnergyCorp. XcelEnergyInc.

NWE NVE PCG PNW PNM SCG SO TE UIL UNS VVC WR WEC XEL

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Electric Diversified DailyValues 30Jun10to30Jun11 (03Jan07=100)

100 Index 95

01Jun11:73.6352WkHigh:76.61 6/31/2011:74.8152WkLow:62.51 Change:1.61%

S&P 500

90

85

80

75

70

65 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Feb-11 Mar-11 May-11 Jun-11

DiversifiedElectric:Companiesthatareinvolvedinthegeneration,transmissionanddistributionofelectricity;morethan 20%oftotalassetsareunregulated.

AESCorp. AlleghenyEnergyInc. BlackHillsCorp ConstellationEnergyGroupInc DominionResourcesInc. DukeEnergyCorp EdisonInternational EntergyCorp. ExelonCorp.

AES AYE BKH CEG D DUK EIX ETR EXC

FirstEnergyCorp. HawaiianElectricIndustries IntegrysEnergyGroupInc. NextEraEnergyInc. OGEEnergyCorp. OtterTailCorp. PPLCorp. PublicSvcEnterpriseGroup SempraEnergy

FE HE TEG NEE OGE OTTR PPL PEG SRE

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Electric Merchant DailyValues 30Jun10to6/31/2011 (03Jan07=100)

120
Index

01Jun11:73.6352WkHigh:76.61 6/31/2011:74.8152WkLow:62.51 Change:1.61%

S&P 500

110

100

90

80

70

60

50 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Feb-11 Mar-11 May-11 Jun-11

MerchantElectric:Companieswhoseprimaryactivityisthegenerationofelectricityonanunregulatedbasis.

CalpineCorp. CovantaHoldingCorp. DynegyInc. GenOnEnergyInc NRGEnergyInc. OrmatTechnologiesInc.

CPN CVA DYN GEN NRG ORA

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RegulatedT&D(Gas&Electric) DailyValues 30Jun10to30Jun11 (03Jan07=100)

125
Index

01Jun11:111.7152WkHigh:114.94 30Jun11:112.5352WkLow:87.09 Change:0.74%

S&P 500

115

105

95

85

75

65 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Feb-11 Mar-11 May-11 Jun-11

RegulatedTransmission&Distribution(GasandElectric):Companiesengagedinthetransmissionanddistributionof naturalgasandelectricity;80%ormoreoftotalassetsareregulated.

CHEnergyGroupInc. ConsolidatedEdisonInc. ITCHoldingsCorp. NortheastUtilities NSTAR PepcoHoldingsInc. UnitilCorp.

CHG ED ITC NU NST POM UTL

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NaturalGasT&D(Diversified) DailyValues 30Jun10to6/31/2011 (03Jan07=100)

120
Index

01Jun11:111.8652WkHigh:114.42 6/31/2011:113.0552WkLow:77.01 Change:1.07%

S&P 500

110

100

90

80

70

60 Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Feb-11 Mar-11 May-11 Jun-11

NaturalGasTransmission&Distribution(Diversified):Primaryactivitiesareinthenaturalgassector; 20%ormoreofassetsareunregulated.

AGLResources AtmosEnergyCorp. CenterPointEnergyInc. ChesapeakeUtilitiesCorp. DeltaNaturalGasCo. ElPasoCorp. EnergenCorp. EQTCorp. LacledeGroupInc. MDUResourcesGroupInc. NationalFuelGasCo. NewJerseyResourcesCorp. NicorInc.

AGL ATO CNP CPK DGAS EP EGN EQT LG MDU NFG NJR GAS

NiSourceInc. NorthwestNaturalGasCo. ONEOKInc. PiedmontNaturalGasCo. QuestarCorp. RGCResourcesInc. SouthJerseyIndustriesInc. SouthernUnionCo. SouthwestGasCorp. SpectraEnergyCorp UGICorp. WGLHoldingsInc. WilliamsCos.Inc.

NI NWN OKE PNY STR RGCO SJI SUG SWX SE UGI WGL WMB

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MasterLimitedPartnerships (MLPs) DailyValues 30Jun10to6/31/2011 (03Jan07=100)

145
Index

01Jun11:126.9652WkHigh:137.06 6/31/2011:130.4652WkLow:108.40 Change:2.76%

S&P 500

135

125

115

105

95

85

75

65
Jun-10 Aug-10 Sep-10 Nov-10 Dec-10 Feb-11 Mar-11 May-11 Jun-11

MasterLimitedPartnerships:Primarilyownersandoperatorsofnaturalgaspipelinepropertieswithanemphasison midstreamassets.

AtlasPipelinePartnersLP BoardwalkPipelinePartnersLP ChesapeakeMidstreamPartners CopanoEnergyLLC CrosstexEnergyL.P. DCPMidstreamPartnersLP ElPasoPipelinePartnersLP EnergyTransferPartnersLP EnterpriseProductsPartners KinderMorganEnergyPartners ONEOKPartnersLP RegencyEnergyPartnersLP SpectraEnergyPartnersLP

APL BWP CHKM CPNO XTEX DPM EPB ETP EPD KMP OKS RGNC SEP

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NOTES, NEWS &VIEWS

New LNG Projects Give Black & Veatch Technology Significant Market Share in China Black & Veatch and Chemtex will design and build two new liquefied natural gas (LNG) facilities in Shaanxi Province, China featuring Black & Veatchs patented PRICO process. The plants will be used to provide natural gas for peak shaving and vehicle fuel in the region. The Black & Veatch-Chemtex team has won five LNG projects in China since the beginning of 2011, and 13 since 2006. The PRICO process has become very successful in China because of its simplified operations, lower capital and operating costs and its flexibility in feed gas composition, said Brian Price, Vice President and LNG Technology Manager for Black & Veatchs energy business. The Black & Veatch-Chemtex team has won more than half of all new LNG projects in China since 2006, all of which use the PRICO process. The two facilities will be located in Jingbian City and Yulin City, Shaanxi Province. They will liquefy natural gas for vehicle fuel in the region, off-setting the use of diesel and gasoline. The use of LNG for vehicle fuel provides both environmental and economic benefits since natural gas has lower emissions than either diesel fuel or gasoline. Our sustained growth in China is fueled by the success of earlier projects that continue to exceed our clients expectations, said Hoe Wai Cheong, Managing Director for Asia and Middle East, India, Europe and Africa regions in Black & Veatchs global energy business. Chinas natural gas pipeline infrastructure is developing, and the countrys size presents challenges in supplying much-needed clean fuel to local residents and businesses. The Jingbian Xingyuan LNG Project is located in Jingbian City and owned by Shaanxi Jingbian Xingyuan Industry Ltd. When completed, the facility will have a capacity of 53 million cubic feet (1.5 million cubic meters) per day. The Yulin Yuanheng LNG Peak Shaving Project is located in Ma Huangliang Industrial Park in Yulin City. When completed, the facility will have a capacity of 35.3 million cubic feet (1 million cubic meters) per day. PRICO is an innovative process developed by Black & Veatch to liquefy natural gas, making it available for transport via truck or ocean tanker. The process uses a Black & Veatch-patented, single-mixed refrigerant loop for natural gas liquefaction. The process provides the lowest capital cost of competing technologies, a simplified refrigeration system that requires minimal equipment, and simplified control and maintenance. Black & Veatch Is Selected to Refurbish a Major UK Water Treatment Plant A major refurbishment of the largest water treatment works for Dee Valley Water PLC, a major UK water utility, will provide long-term security and quality of water supplies to Wrexham, UK, and the surrounding area. Tendered as a single project, Black & Veatch has been appointed as the design and build partner to upgrade and replace the ageing water treatment assets at the Llwyn Onn water treatment works. A prominent consideration in our design will be to minimize operational cost and energy consumption which is of critical importance. Black & Veatch Bid Manager Mat Fairfax said. Additionally, we are committed to minimize the works environmental impact through waste-efficient design and construction execution that fulfils carbon reduction and waste-to-landfill objectives. Dee Valley Water PLC operates in an area of 831 square kilometers covering Chester and North East Wales and North West England. It supplies 23 million cubic meters of drinking water per year to a population of 258,000, including domestic, commercial, industrial and business customers. The water utilitys asset base consists of approximately 2,000 kilometers of water mains, six treatment works and more than 50 water storage tanks and pumping stations.
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The rebuilt works will be constructed within the constraints of the existing site. The 16 million upgrade forms the largest single project being delivered under Dee Valley Waters five-year capital investment program, which is mainly targeted at the renewal of assets that are approaching the end of their useful lives. The contract will be executed in two phases. The six-month design period began in April 2011, and will be followed by an 18-month construction period. All works are planned to be complete by April 2013. U.S. Utility Survey Respondents Believe Significant Energy Price Increases Are Coming; Water/Energy Nexus Is a Growing Challenge Black & Veatch released the results of its fifth annual Strategic Directions in the Electric Utility Industry survey on June 13 in which more than 700 U.S. utility leaders took part. Among the top findings, participants believe that energy and commodity prices will rise significantly in the next five years, and water has become the top environmental and business issue. More than 70% of survey participants agreed or strongly agreed that energy and commodity prices would rise significantly in the next five years, signifying tremendous capital investment needs across the nations electric utility system, said Rodger Smith, President of Black & Veatchs management consulting business. There is also a growing awareness of the nexus of water and energy issue within the industry, he said. For the first time, water supply has become the top environmental concern among survey participants and water management was rated as the business issue that could have the greatest impact on the utility industry. Other highlights include: Lack of national energy policy impedes investment in new technology. Smart Grid programs are hamstrung by a lack of customer interest and knowledge. Coal will remain an important part of the U.S. energy mix. More than 77% of respondents virtually the same percentage as last years survey results believe when fiscal realities are considered, coal remains key in the U.S. energy portfolio. Natural gas leapfrogs nuclear and wind as the top environmentally friendly technology among all survey participants, although utility respondents still prefer nuclear. Survey participants are optimistic that electric vehicles will account for approximately 8% of their annual energy load by 2025. They estimate that electric vehicles will account for 1% of their annual energy load by as early as next year. Nationwide, 1% of annual energy load equates to approximately 5,300 megawatts of baseload capacity, the energy equivalent to power more than 5 million homes.

Black & Veatchs annual survey provides insights and analysis into traditional utility-focused questions regarding operations and regulations. The full survey and analysis is available online at www.bv.com/Electric-Utility-Survey/.

(C) Copyright 2011, Black & Veatch Holding Company. All rights reserved worldwide. This report is prepared for general circulation and is circulated for general information only. Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any security or any option, future or other derivative related to such security. The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized advice about investments. Data contained here are obtained from what are considered reliable sources; however, its accuracy, completeness or reliability cannot be guaranteed. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Black & Veatchs management consulting group is among the worlds premier strategic, economic and management consulting companies specializing in energy, water, information and government matters. We encourage our professionals to publish individual commentary on key industry issues. Any opinions offered are those of the authors and not necessarily official viewpoints of the company or its other employees. Additional information is available at www.bv.com.

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