2013-07-03KeyBanc Capit Electric Utilities Quarterly 1Q136378.pdf

I
Energy
Industry Research
Electric Utilities Quarterly 1Q13

1Q13 Solid Earnings Offset by Merchant Power Prices

Near Term, We Expect the Sector Could Come Under Pressure Around
Interest Rate Concerns

Long Term, We Believe the Sector Is Positioned for
Stable Earnings Growth with Economic Recovery

June 2013
Paul T. Ridzon
[phone]
[e-mail]

For important disclosures and certifications,
please refer to page 68 of this document.
KeyBanc Capital Markets Inc.,
Member NYSE/FINRA/SIPC

June
Co
Elect
In
1Q13
E
E
E
St
W
1Q13
R
Pr
R
SEC
Hi
GRO
INDU
L
H
St
C
Ja
C
M&A
P
P
R
SHO

Utiliti
POR
NVE
NWE
TE –
Elect
CMS
olta
AVA
PNW
1Q13
Ener
Ener
Ener
ALE:
Elect
AEE:
NEE:
ALE:
Elect
Elect
POR
SO:
D – Q
ALE:

APP
KeyB
Equit
2013
ntents
ic Utilities Qua
dustry Update
RESULTS — B
arnings Comp
rnings Surpris
rnings Adjust
ck Price Perf
ather ............
RATINGS, PRI
ating Changes
ice Target Ch
search Cover
TOR OUTLOOK
storical Valuat
UP INVESTMEN
TRY THEMES
ow Commodity
ightened Imp
ck Performa
mprehensive
pan Nuclear
st Escalation
ACTIVITY ON T
ossible Acquir
ssible Acquir
cent M&A Act
RT INTEREST O
s – Quick Aler
Quick Alert:
Quick Alert:
Quick Alert: I
uick Alert: TE
ic Utilities – Q
Quick Alert:
e Optimizatio
Outlook Impr
Strong 1Q R
Earnings Previ
y – Michigan
y – Quick Aler
y – Quick Aler
Investor Meeti
ic Utilities: Up
Merchant Asse
Solid Story Tra
Investor Meeti
ic Utilities: Rai
ic Utilities – Q
Quick Alert:
uick Alert: Ke
uick Alert: Bal
Fiscal Fix Pres
NDIX ................
anc Capit
Researc
terly 1Q13 ......
.......................
Y THE NUMBE
arison ..............
es ..................
ents ..............
rmance .........
......................
CE TARGET AN
.......................
nges ..............
ge Changes .
..........................
ions Remain I
T THESIS .........
.........................
Prices and Av
rtance of Reg
ce Divergenc
nergy Refor
risis Highlight
n New Gener
HE RISE ...........
ees ..................
rs ...................
ivity Update ....
VERVIEW ........
: More MLP A
ew Projects U
r. Buffett Bets
cremental Ga
to Acquire Ne
ick Alert: Cap
ichigan Case
Technology –
ves; Raising 2
ported; Raisin
w - reprinted
Meetings Takea
: Michigan Co
: IRS Wind Tax
g Takeaways
ating Price Ta
s Sold, Adjust
des at Meaning
g Takeaways -
sing Price Targ
: Michigan Le
ompany Wins
per County Pl
nced Deal Rea
nts Wind Opp
.........................
l Markets

..........................
.......................
RS ......................
.......................
.......................
.......................
.......................
.......................
D RESEARCH
.......................
.......................
.......................
..........................
nconclusive .....
..........................
.........................
ailable Capaci
latory Succe
Based on Co
at an Impass
Risks to Nucl
tion Build .......
..........................
.......................
.......................
.......................
..........................
tivity in Infrast
date; Mixed O
n Vegas - rep
s Reserves Acq
Mexico Gas C
city Auction L
ettlement Ann
nother Head
13 Estimate- r
g 2013 Estimate
from 04/22/2013
ays, Construc
mission Allow
Credit Guidan
upport BUY R
gets - reprinte
ing 2013E - rep
ful Discount; U
reprinted from
ets After Grou
islative Noise
apacity RFP;
nt Settlement
hed on ROE I
rtunity; Reiter
.........................

Inc., Mem
..........................
......................
..........................
......................
......................
......................
......................
......................
COVERAGE CH
......................
......................
......................
..........................
......................
..........................
..........................
ty Heat Up Co
s ....................
modity Expo
; EPA Emissi
ar Power Ind
......................
..........................
......................
......................
......................
..........................
ucture Space -
utcome – excer
inted from 05/3
uired - reprinte
ompany - repri
argely Disappoi
unced- reprin
wind to Load Gr
eprinted from 0
- reprinted fro
..........................
ive Outlook Int
Infrastructur
e Viewed Favo
ting - reprinte
from 03/26/20
inted from 03/
pgrade to BUY
02/24/2013 .......
Multiple Expa
ears Watchin
waiting Other
nnounced - re
centive Adder
te BUY Rating
..........................
er NYSE/
.........................
.......................
.........................
.......................
......................
......................
......................
......................
ANGES ............
.......................
......................
......................
.........................
.......................
.........................
.........................
mpetition ........
......................
ure ................
ns Rules Mo
stry ...............
......................
.........................
.......................
......................
......................
.........................
reprinted from
t reprinted fro
0/2013 ..............
d from 05/29/20
ted from 05/28
nts - reprinted
ed from 05/08/
owth - reprinte
/05/2013 .........
m 05/03/2013 .....
.........................
ct - reprinted
e Tracker - repri
rably - reprinte
from 04/01/201
3 ......................
19/2013 .............
- reprinted fro
.........................
sion - reprinte
- reprinted fro
RFP Outcomes
printed from 01
s - reprinted fro
- reprinted fro
.........................
FINRA/SI
.........................
.......................
..........................
.......................
.......................
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e Forward ......
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.......................
.......................
..........................
06/12/2013.......
m 06/04/2013 ....
.........................
013 .....................
/2013 ................
from 05/28/201
013 ...................
d from 05/07/20
..........................
.........................
.........................
from 04/19/201
nted from 04/1
from 04/16/20
3 .......................
.........................
.........................
m 03/19/2013 .....
.........................
d from 02/18/20
02/01/2013....
- reprinted fro
/25/2013 ...........
m 01/16/2013 ...
m 01/03/2013 ....
.........................
C
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13 ......................
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3 .........................
7/2013 ...............
13 .....................
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013 .....................
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m 2/01/2013 ......
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3 
3 
4 
4 
4 
5 
6 
7 
7 
7 
7 
7 
0 
1 
2 
2 
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2 
4 
5 
5 
6 
6 
6 
6 
8 
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1 
2 
3 
4 
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3 
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5 
7 
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0 
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7 
8 
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0 
1 
3 

June
Ele
IND
Paul
1Q1

a) DU
b GX
c) TE
Sourc

Com
ALL
Ame
Ame
Avist
CMS
Clec
Con
DTE
Domi
Duk
Ente
Exel
First
Grea
IDA
NV
Next
NiSo
Nort
PPL
Pep
Pinn
Portl
Sout
TEC
Wisc
Xcel
KeyB
Equit
2013
ctric Util
USTRY UPDA
T. Ridzon: (216
3 RESUL
K results reflect co
earnings and est
Q12A of $0.24 as
: KeyBanc Capital
pan
ETE Inc.
en Corp.
ican Electric P
Corp.
Energy, Inc.
Corp.
olidated Ediso
Energy Co.
nion Resource
Energy Corp.a
gy Corp.
n Corp.
nergy Corp
Plains Energy
ORP, Inc.
nergy, Inc.
ra Energy, Inc
rce, Inc.
western Corp.
orp.
o Holdings, Inc
cle West Capi
nd General El
ern Company
Ener , Inc.c
nsin Energy C
Energy Inc.
anc Capit
Researc
ties Qu
TE
689-0270 — pri
TS — BY T
mpleted merger wi
mates reported as
originally reported
Markets Inc. and
Ti
A
A
wer, Inc. A
A
C
C
, Inc E
D
, Inc. D
D
E
E
F
Inc.b G
I
N
N
N
N
P
P
al Corp. P
ctric Co. P
S
T
orp.
X
Average
l Markets

rterly 1
[e-mail]
HE NUMB
T
th Progress Energ
GAAP net income
was revised for T
ompany reports

cker
LE
E
P
A
MS
NL
E
UK
R
C
XP
A
E
EE
I
E
L
M
W
R
EC
L
1
Inc., Mem
13
RS
ble 1. Ea
y.

Guatemala segm
0.78 0.8
.33 0.2
.80 0.8
.70 0.7
.49 0.5
.45 0.4
.02 1.0
.15 1.3
.86 0.8
.03 1.0
.93 0.9
.66 0.7
.69 0.7
.13 0.1
.55 0.6
.08 0.0
.06 1.1
.70 0.6
.98 1.0
.67 0.7
.23 0.2
.13 0.2
.66 0.6
.51 0.4
.17 0.1
.72 0.7
.46 0.4
Q13E 1Q1
er NYSE/
nings Co
ent moving to disc
3 0.66
0.15
0.80
1 0.65
0.37
0.42
1.00
0.91
0.85
1.17
0.44
0.85
0.82
-0.07
0.50
0.05
1.02
0.69
1 0.88
1 0.70
0.22
-0.07
0.65
0.42
0.23
0.74
0.38
3A 1Q12A
FINRA/SI
parison
ontinued operation
Actual Cha
25.
46.
9.
43.
4.
8.
47.
-2.
-12.
113.
-17.
-7.
342.
34.
80.
9.
14.
1.
9.
414.
16.
-17.
2.
26.
49
C
ns.
1Q
nge
8% 2.7
7% 2.1
/M 3.1
2% 1.8
2% 1.6
8% 2.5
0% 3.8
3% 4.0
4% 3.3
8% 4.3
6% 4.8
6% 2.5
3% 3.0
9% 1.6
0% 3.2
0% 1.2
8% 4.9
/M 1.5
8% 2.4
4% 2.4
1% 1.1
3% 3.6
/M 1.9
7% 2.8
4% 0.9
7% 2.4
3% 1.9
.7%
FY1
5 3.05
2.30
3.30
1.85
1.75
2.75
3.85
4.30
3.55
4.55
5.15
2.35
3.05
1.65
3.40
1.35
5.30
1.65
2.70
2.15
1.20
3.75
2.05
2.90
1.15
2.55
2.00
3E FY14E
Page 3 of 6
F
Chang
10.9
9.5
6.5
2.8
6.1
7.8
1.3
7.5
6.0
4.6
6.2
-7.8
1.7
3.1
4.6
8.0
7.1
6.5
10.2
-10.4
4.3
2.7
5.1
3.6
21.1
4.1
5.3
5.1

Y
e
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%

June
EA
Over
more
Mark
than

EA
On
expe
cons
our e
expe
a los
relati

On t
our e
impai

Addit
Ener
exce
$0.9

Ame
as di

EA
Head
also
thes
Previ

After
Corp
diffic
Corp
intro

Plea

Prior
for E
TEC
and

Tabl

KeyB
Equit
2013
NINGS COM
all, companies
normal weat
ts Inc. Electri
ur expectatio
RNINGS SUR
an individual
tations for th
nsus was $1.
xpectations. I
tations as ne
of $0.07 in
e to our estim
e downside,
arnings expec
rment) into dis
onally, we co
y Company
ded consens
) came in bel
en Corporatio
cussed abov
RNINGS ADJ
ing into the 1
ecreased our
estimate cha
ew”.
digesting 1Q
ration (AVA-
lties in 2012.
ration to $3.6
uced a 2014
e see pages
to 1Q earning
tergy Corpor
Energy, Inc.
ricing in 2013,
1 lists our cu
anc Capit
Researc
PARISON
within our ele
er after a ver
c Utility Index
s for a 7.1%
PRISES
company basi
quarter. On
7) beat our e
ACORP, Inc.
rates combin
1Q12; our est
ate.
meren Corpo
ations as the
continued ope
rectly called
nd NextEra E
s views, and
w consensus
we incorrect
.
USTMENTS
Q13 earnings r
2013 estimat
ges, please
arnings repo
YSE) to $1.8
We initiated
from $3.50 p
stimate of $3.
0-33 for our p
reports, we l
tion (ETR-NY
(TE-NYSE), w
as well as hig
rent 2013 and
al Markets

tric utilities c
mild 1Q12.
rose by nearl
ecrease on a
, there were
he upside, D
pectations as
(IDA-NYSE; $
ed ith cold w
imate was $0
ation (AEE-N
improvements
ations.
ll but one of
nergy, Inc. (N
ominion Res
xpectations.
called as an
eporting seas
s for Consolid
ee page 34 f
ts, earnings c
from $1.75 p
2014 estima
er share after
5 per share f
blished report
wered 2013 e
E) to $5.20 fr
lowered our
er costs at T
2014 earning

Inc., Mem
overage univer
s indicated i
49.7% on a
erage quarterl
three notable
E Energy Co
weather and
0.67 vs. $0.5
eather drove r
13, consensu
SE; $0.22 vs.
at the regula
ur earnings s
E-NYSE; $1.
urces, Inc. (D-
upside surpri
n, we raised
ted Edison, I
r our April 2
nference call
er share give
e of $1.85 fo
ustomer gro
r Pinnacle We
on the abov
stimates for D
m $5.30 per
013 estimate
mpa Electric
estimates for
ber NYSE/
se reported st
Table 1, ag
erage compar
earnings, ba
upside surpri
pany (DTE-
xpense contr
in 1Q12; our
sults. Lastly,
was $0.14)
$0.15 in 1Q1
ed utilities we
rprises headi
12 vs. $1.02 i
NYSE; $0.83
e. Accountin
ur 2013 esti
c. (ED-NYSE
, 2013 publis
and investor
an outlook fo
Avista. We
th in Arizona
st Capital Cor
-mentioned e
ke Energy C
hare both for
to $1.10 from
tility.
companies cu
FINRA/SI
rong 1Q13 qu
regate 1Q13
d to the sam
ed on our est
ses and one
YSE; $1.34
l benefited th
estimate was
innacle West
aw customer
; our estimat
e offset by p
g into the qu
n 1Q12; our
s. $0.85 in 1
differences, i
ate for Wisco
and Exelon
ed report title
analyst meeti
r stabilization
lso raised ou
xceeded exp
oration.
timate chang
rporation (DU
hallenging m
$1.20 per sha
rently under c
PC
rterly results,
arnings for s
e quarter a y
mates.
notable dow
s. $0.91 in 1
utility and tra
$0.55, consen
Capital Corp
growth, weat
was $0.33,
tting the mer
rter in our 1
stimate was
12; our estim
ncluding an i
sin Energy C
orporation (E
d “Electric Uti
ngs, we raised
f earnings at
2013 estima
ctations for th
s.
K-NYSE) to $
rchant margi
e for expecte
verage.
primarily drive
ocks in the K
ar ago, and s
side surprise
12; our esti
ding results c
sus was $0.5
ration (PNW-
er and lower
onsensus wa
hant operatio
13 earnings
1.06, consen
te was $0.86,
pairment, ske
rporation (W
C-NYSE). Fo
lities Industry:
our 2013 esti
the Ecova bu
es for Pinnacl
second quar
.35 from $4.5
s and higher
lower coal s
Page 4 of 6
n by a return t
eyBanc Capit
mewhat bett
relative to o
ate was $1.1
me in ahead
) also beat o
YSE; $0.22 v
property taxe
$0.28) misse
s (including a
review as DT
us was $1.0
consensus wa
ed the resul
C-NYSE). W
a summary o
1Q1 Earnin
mate for Avist
iness unit aft
e West Capit
er in a row. W
per share an
osts. Lastly, f
gment volume
8
o
l
r
r
,
f
r
.

)

s
a
r
l

r

June

STO
As s
Utilit
bette
whic
sect
mark
Fed

KeyB
Equit
2013
CK PRICE
hown in Table
Index impro
than the Phil
was up 10.0
r (UTY) increa
ts as investo
hairman Bern
Note: Pas Source: Fa
Compan
Allete In
Ameren
America
Avista C
CMS En
Cleco C
Consoli
DTE En
Dominio
Duke En
Entergy
Exelon
FirstEne
Great Pl
IDACOR
MDU Re
NV Ener
NextEra
NiSourc
Northwe
Otter Tai
PPL Cor
Pepco H
Pinnacle
Portland
Souther
TECO E
Wiscons
Xcel Ene
KBCM
Benchm
Philadel
S&P 500
anc Capit
Researc
ERFORMAN
2, stock price
ed greatly, wi
adelphia Utilit
for the quart
se of 4.2%. W
s have an inc
anke adopted
t results cannot anctSet
y
c.
orp.
Electric Pow
rp.
rgy, Inc.
rp.
ated Edison,
rgy Co.
n Resources,
rgy Corp.
orp.
orp
gy Corp
ins Energy, I
, Inc.
ources Grou
y, Inc.
nergy, Inc.
, Inc.
tern Corp.
Corp.
.
ldings, Inc.
West Capital
General Elect
Compan
ergy, Inc.
in Energy Cor
rgy Inc.
Electric Utility
rks:
phia Utility Ind
Inde
al Markets

CE
performance d
h the index s
Index (UTY),
r. Year-to-dat
believe the s
eased appetit
less accommo
T
d should not be vie

er, Inc.
nc
Inc.
c.
, Inc.
Corp.
ric Co.
.
Index Averag
ex
Inc., Mem
uring 1Q13 for
owing a 12.
which was u
2013 perfor
trength in the
for risk. Addi
dating langua
Table 2.
wed as indicators
Ticker
ALE
AEE
AEP
AVA
CMS
CNL
ED
DTE
D
DUK
ETR
EXC
FE
GXP
IDA
MDU
NVE
NEE
NI
NWE
OTTR
PPL
POM
PNW
POR
SO
TE
WEC
XEL
e
UTY
SPX
ber NYSE/
companies u
% price incre
11.7% in 1Q
ance has see
roader marke
tionally, intere
e.
rice Perfo
of future performa
Price
12/31/2012
40.98
30.72
42.68
24.11
24.38
40.01
55.54
60.05
51.8
63.8
63.75
29.74
41.76
20.31
43.35
21.24
18.14
69.19
24.89
34.73
25
28.63
19.61
50.98
27.36
42.81
16.76
36.85
26.71
458.63
1426.19
FINRA/SI
nder coverage
se on avera
13, and outpe
broader mar
t is attributabl
t rate concer
rmance
nce.
Price
/31/2013 6/2
49.02
35.02
48.63
27.4
27.94
47.03
61.03
68.34
58.18
72.59
63.24
34.48
42.2
23.19
48.27
24.99
20.03
77.68
29.34
39.86
31.14
31.31
21.4
57.89
30.33
46.92
17.82
42.89
29.7
512.27
1569.19 1
PC
in the KeyBan
e. Our cover
rformed the b
et (SPX) stre
to continued
s appear to b
Price 1
/2013 Ch
48.12 1
32.79 1
43.57 1
26.43 1
26.6 1
44.71 1
56.29
64.31 1
55.2 1
65.46 1
68.11 -
30.62 1
36.41
22.17 1
47.01 1
24.75 1
23.47 1
78.38 1
27.69 1
38.94 1
27.29 2
29.08
19.73
52.48 1
29.69 1
42.94
16.74
39.82 1
28.02 1
1
477.68 1
73.09 1
Capital Mar
ge group’s p
oader S&P 5
gth up 10.3%
nflows into th
e weighing on
Q13 6/24/
nge YTD Ch
9.6% 1
.0%
.9%
.6%
.6%
.5% 1
.9%
.8%
.3%
.8%
.8%
.9%
.1% -1
.2%
.3%
.7% 1
.4% 2
.3% 1
.9% 1
.8% 1
.6%
.4%
.1%
.6%
.9%
.6%
.3% -
.4%
.2%
2.7
1.7%
.0% 1
Page 5 of 6
kets Inc. Electri
rformance wa
0 Index (SPX
compared to
broader equi
the group aft

2013
nge
7.4%
.7%
.1%
.6%
.1%
.7%
.4%
.1%
.6%
.6%
.8%
.0%
.8%
.2%
.4%
.5%
.4%
.3%
.2%
.1%
.2%
.6%
.6%
.9%
.5%
.3%
.1%
.1%
.9%
7.2
4.2%
.3%
8
c

,

r

June
WE
Tabl

KeyB
Equit
2013
THER
e 3 shows the i
Com
Allet
Amer
Amer
CMS
Clec
DTE
Domi
Exelo
Grea
IDAC
NV E
NiSo
North
Pepc
Portl
Wisc
Xcel
* Data i
Source
Sout
Pinna
anc Capit
Researc
mpact of the
Tab
pany
e Inc.
en Corp.
ican Electric Po
nergy Corp.
Corp.
nergy Co.
ion Resources,
n Corp.
Plains Energy,
RP, Inc.
ergy, Inc.
rce, Inc.
estern Corp.
Holdings, Inc.
nd General Elec
nsin Energy C
nergy, Inc.
s Cooling Degree Da
National Oceanic an
hern Company
cle West Capita
al Markets

eather temper
le 3. 1Q1

T
w er, Inc.
Inc.
nc.
tric Co.
rp.
ys Data
Atmospheric Admin
l Corp.
Inc., Mem
atures (primari
3 Weather
icker
ALE
AEE
AEP
CMS
CNL
DTE
D
EXC
GXP
IDA
NVE
NI
NWE
POM
POR
WEC
XEL
istration (NOAA), Ke
SO
PNW
ber NYSE/
ly on retail deli
Impact —
1Q13 vs
Normal
(0.1)%
(2.3)%
(7.5)%
(3.4)%
(13.0)%
(3.8)%
(0.2)%
(3.4)%
(0.2)%
9.7%
(10.5%)
(0.3)%
(4.3)%
(2.5)%
(6.3)%
30.0%*
(0.1)%
(5.8)%
(5.4)%*
0.4%
(1.1)%
yBanc Capital M arket
FINRA/SI
ivery) in the qu
Heating D
1Q13 vs
1Q12
S
29.9%
43.7%
34.2%
28.4%
58.2%
28.0%
35.6%
31.1%
42.4%
28.3%
13.1%
30.9%
18.1%
26.9%
52.3%
(2.9)%*
(0.6)%
49.1%
(38.4)%*
34.2%
28.0%
s Est.
PC
arter compare
egree Day
Estimated
ame Qtr YOY
EPS Impact
$0.05
$0.08
$0.10
$0.14
$0.04
$0.16
$0.11
$0.05
$0.05
$0.03
$0.01
$0.09
$0.09
$0.03
$0.00
$0.13
$0.05
$0.04
$0.06
to our predic
s
Actua
Same Qtr YO
EPS Impac
$0.07
$0.10
$0.10
$0.16
$0.05
$0.22
$0.09
$0.04
$0.07
$0.10
$0.02
$0.09
$0.09
$0.03
$0.00
$0.10
$0.06
$0.06
$0.05
Page 6 of 6
tions.

l

June

1Q1
RAT
Durin
upgr
whic

Our
publi

PRI
We r
busin

RES
On A
Tuck

SE
In th
year,
signa
rotati
grou
movi
we a
off hi
deliv
calle
volati
inter
multi
supp

A slo
resid
the e
indu
outlo
level
KeyB
Equit
2013
3 RATING
ING CHANG
g 1Q13, we r
de report title
management
urrent resear
ation is provi
CE TARGET
egularly revisi
ess and econ
EARCH CO
pril 29, 2013,
r. This transf
CTOR OU
e near term we
utilities have
ls, while still
n as investor
, more regula
g away from i
tribute to inve
ghs after a ra
ry years were
for pricing to
lity in the gro
ationally. An
le fronts thro
rt of renewab
economy ba
ntial/commer
conomy stabil
trial customer
k, however,
and the delic
anc Capit
Researc
S, PRICE
S
aised our ratin
“NEE: Solid
laid out a gro
h for compan
ed on pages
CHANGES
t and adjust o
mic outlook.
Sourc
VERAGE CH
research cove
r was consist
TLOOK
expect utilitie
ulled back. W
ixed, continu
leave the rel
ed names ha
ts extended p
tors acceptin
lly that peake
quite disappo
be down fro
p around FO
additional fac
gh conservat
es through bo
ck in 2009 im
ial customer
izing with gen
classes. 2011
s earnings c
te state of th
Sy
AE
ALE
CM
CN
IDA
NE
NI
l Markets

TARGET
g on NextEra
Story Trades a
wth story we fo
es under cov
0-62.
r price targe
ur current pri
T
e: KeyBanc Capita

ANGES
rage of MDU
nt with his pre
will face hea
e attribute this
to show grad
tive safety of
e likely suffer
riod of being
that recover
in late Mar
nting, generall
the prior ye
C language,
or we believ
on, demand r
h tax policy (t
acted electrici
lasses adjust
erally improvi
and 2012 con
nference call
economy

Cu
bol Ra
B
B
B
B
B
B
B
Inc., Mem
ND RESE
Energy, Inc. to
t Meaningful
und credible a
rage publishe
s on BUY-rat
e targets on al
able 4. Pri
l Markets Inc.
Resources Gro
ious research
winds relative
pullback to s
al improvem
he group to p
d from this rot
omewhat acc
of power ma
h to early Ap
y coming in at
r auction resu
natural gas p
bears watchi
sponse and
x credits) and
y sales and p
d their spendi
g electricity s
inued the gen
continue to
rrent Curr
ing Targ
Y $51.
Y $51.
Y $30.
Y $48.
Y $49.
Y $84.
Y $32.
er NYSE/
RCH CO
BUY from HO
Discount; Upgr
nd compelling.
d since our p
d stocks give
l of our BUY-r
ce Target

up Inc. and Ot
coverage of t
to the broade
veral factors.
nt. As such,
sition themsel
tion as well a
mmodating.
kets ma be l
il this year. S
half the pricin
lts). Looking f
icing and hea
ng is electric
verall efficien
renewable po
icing as indust
g accordingly.
ales compara
eral trend of fl
aution slow t
ent Previo
et Ratin
0 BUY
50 BUY
00 BUY
50 BUY
50 BUY
00 BUY
00 BUY
FINRA/SI
ERAGE
LD on March 1
ade to BUY”).

evious Electri
n changes in
ted stocks un
Changes
ter Tail Corpo
e Engineerin
market. After
Looking at the
e believe the
es more aggr
s increasing i
erchant pow
nger-dated th
econdly, PJM
relative to m
rward at the
lines around
demand grow
cy gains. Exa
tfolio standard
rial customers
Year-end 201
les to the sa
at to modest
moderating
us Previous
Target
$49.50
$50.50
$29.50
$46.50
$48.00
$80.00
$30.50
PC
CHANGES
9, 2013 (see
This upgrade
Utilities Qua
peer group a
er coverage
ation as tran
and Constru
outperformin
entire utility s
roup may be
essively. Look
vestor concer
r generators
an expected.
capacity mar
rket expectati
near to interm
economic indi
h. Demand g
erbating tepi
s.
saw reduced
0 results sho
me periods a
rowth. We re
load growth,
Date
Changed
4/23/2013
4/23/2013
4/23/2013
4/23/2013
3/26/2013
4/23/2013
4/23/2013
ages 50-52 f
ollowed NEE’
terly through
erage P/E m
re outlined in

sferred to KB
tion sector.
the broad ma
gment, we b
on the wrong
ing at subsets
that monetar
ave weakene
atural gas pr
et results for
ons (with exp
ediate term,
ators, both d
owth is being
demand is
emand for th
ed continued
year ago, pa
ain guarded i
iven ongoing
Page 7 of 6
or our publishe
analyst day
he date of thi
ltiples and o
able 4.
M analyst Ma
rket early in th
lieve economi
ide of a sect
within the utilit
policy may b
as well, whic
cing has pulle
the 2016-201
ctations havin
e expect som
mesticall an
challenged o
ontinued poli
ir products an
odest signs
ticularly for th
our near-ter
unemployme
8
d
t

r
t

r

f

t

June
In th
predi
fores
trans
cont
Addit
bear
can

Muc
withi
Ame
Corp
(XEL

We c
utiliti
could
man
proje
the n
condi
effec
main

We
mon
gene
by in
unre
Pow
NYS
pricin
pricin
even
weat
our e
incre
be d
conc
grou
appe
symb

KeyB
Equit
2013
e intermediate
table steady
e include in
ission, new
mplated unde
onally, we bel
watching is
e meaningfull
of the interm
our group o
en Corporati
ration; NextE
NYSE).
ntinue to see
s attempting
be a surge in
companies t
ts, as oppos
ed for growth
tions persiste
iveness of ru
enance and c
xpect the gro
tary policy (or
ators with nu
reasing shale
ulated gener
r Company, I
); NextEra E
g could event
g lifted the st
s). Strategical
er or another
ntire sector,
sed demand
iven around i
rn that inevit
reacted neg
ite for yield h
ols on the stre
anc Capit
Researc
to longer term
growth oppor
remental gen
transmission
r the previou
eve there is a
oltage optimiz
reduced. We
diate to long-
covered co
n; CMS Ene
a Energy Inc.
a large numb
o take advant
issuances to t
revisit capital
d to outright c
-related capita
, the cuts g
ning older in
pital spendin
p’s stock per
at least discu
lear assets a
gas supplies
tors. In our vi
nc. (AEP-NY
ergy, Inc.; an
ally erase so
cks of merch
y, we await a
emporary eve
ith regulated
bsorbs exces
vestor sentim
ble tightening
tively to the
s turned to u
ngth of the rec
C
So
Re
t
u
r
n

%
al Markets

we believe th
unities aroun
ration capaci
o more easil
, more balka
opportunity t
tion. By redu
view the tech
erm growth i
panies that h
gy Corporatio
NorthWester
r of new bond
ge of record l
y to get ahea
spending pla
ncellation. Ini
l spending on
rew more ex
fficient power
has ceased a
ormance in 2
ssion about
d coal-fired pl
hould keep w
w, the comp
E); Dominion
PPL Corpora
e of the neg
nt exposed c
stronger sign
nt. Signs of a l
ames benefiti
s capacity. Fi
nt about whe
may be close
ecent subtle
derperforman
overy and the
Chart 1. 2
urce: FactSet

Ja
n
-
1
3
-15
-10
-5
0
5
10
15
20

UTY vs. S
Indexed Pri
S&P 500
PHLX / Ut
Inc., Mem
e group will a
the meaning
y (which we
move powe
ized industry
deploy capit
ing distributio
ology as a co
the sector is
ve focused
n (CMS-NYS
Corporation
issuances, lo
ow long-term
of further incr
s and reasse
tially, reductio
tems such as
ensive, with
plants and p
nd programs
13 will be a
onetary policy
nts (with firm
olesale electri
nies with the
Resources, I
ion (PPL-NYS
tive sentimen
mpanies, onl
l that natural
onger-dated f
g from increa
ally, and for t
re monetary p
than previou
hift in body l
ce. We expec
ultimate timing
013 YTD
(December 31
Fe
b
-
1
3
&P 500
ce Performance -
SPX)
ility (UTY)
ber NYSE/
ppeal to pocke
ul capital the
envision as p
between re
construct, an
l around ener
n line voltage,
pelling rate b
tied to large c
trategies on r
); Dominion
NWE-NYSE);
g-term refina
reasury rate
asing interes
s operational
s in capital p
line extension
eferrals in n
rsuing compa
re on a more
unction of thr
). Retreating
intermediate t
city prices at a
most leverage
c.; Entergy
E). We believ
around unreg
to be relinq
as pricing gai
ndamental ec
sed demand
e short term, l
olicy is heade
ly expected.
nguage. Earl
the group to
of shifts in Fe
Performan
, 2012 – June

Ma
r
-
1
3
Ap
r
-
1
3
013 YTD
FINRA/SI
ts of investors
group will b
redominantly
ions that the
transmission
y conservatio
losses on bo
se opportunit
apital growth
ate base gro
Resources, I
Pepco Holdin
cing and the t
. With the rec
rates. Credit
efficiencies. T
ograms were
and new sub
on-core main
ny restructuri
ormal run rat
e primary dri
igh commodit
o long-term c
depressed le
to unregulat
orporation; E
any early ind
ulated genera
ished as gas
ns are sustain
nomic recove
nd merchant
ikel most im
d. Recent lan
iven the fact
2013 outperf
show continu
d policy.
ce of UTY
24, 2013)
Ma
y
-
1
3
PC
seeking relati
spending. T
atural gas fi
existing tran
to move ren
n initiatives. O
h the custom
.
rograms earn
th (not includ
c.; DTE Ene
s, Inc. (POM
erming out of
nt bump up i
nd liquidity c
e primary re
function of l
stations. How
enance spen
gs or merger
.
ers: commod
prices weigh
al contracts).
el, further exa
d commodity
xelon Corpor
ications for po
ors. Indeed,
prices retreat
able and not
ry, however, c
ames even
ortantly, we b
uage by the
that utilities ar
rmance that
d volatility as
vs. SPX

Ju
n
-
1
3
-15
-10
-5
0
5
10
15
20
Re
t
u
r
n

%
e yield, earni
e spending o
ed), rebuildin
mission syst
wable gener
ne technology
r and utility si
ing regulated
ing current p
rgy Company
NYSE); and
igher cost sh
treasuries,
ncerns a few
ponse was ge
wer growth,
ver, as challe
ing, re-evalu
. We believe
ity pricing; th
most heavily
Low natural g
cerbating the
ricing are: A
tion; FirstEne
entially impro
brief early M
d (as ell as
erely a resp
uld lift earnin
ore leveraged
lieve trading i
ederal Reser
e often a bon
e believe w
investors gra
Page 8 of 6
ngs stability an
pportunities w
existing age
m never reall
tion to marke
that we believ
e of the met
returns. Name
ojects) includ
Duke Energ
cel Energy In
rt-term debt b
e believe ther
ears ago drov
nerally to dela
hich eliminate
ging economi
ting the cos
that deferral
economy; an
on unregulate
s prices drive
argin woes f
erican Electri
rgy Corp. (F
ing natural ga
rch rally in ga
other negativ
nse to extrem
s prospects f
to recovery a
n the group w
e has sparke
surrogate, th
s driven by a
ple with mixe
8
d

.

r

:

.

-
f

r
c
-

r

ll

June
Char
From
On a
Bush
500
great
yieldi
assu

C
S

Char
Rece
show
down
suppl

KeyB
Equit
2013
t 1 shows the
a 2014E P/E
relative basis,
tax cuts). We
/E multiple if
r potential up
g sectors su
ing tightenin
Chart 2. P
Ja
n
-
9
7
Ap
r
-
9
7
Ju
l
-
9
7
-
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
110%
120%
130%
140%
150%
S&
P

E
l
e
c
t
r
i
c

U
t
i
l
i
t
y

I
nd
e
x

R
e
t
u
r
n

%
UT
Ind
ource: FactSet
t 2 is provide
ntly, this app
n in the chart,
on occasions
y tightness an
anc Capit
Researc
sector index (
erspective, th
the group is a
believe our s
investors hav
ide in a more
h as utilities
of policy is w
rice Perfo
Oc
t

9
7
Ja
n
-
9
8
Ap
r
-
9
8
Ju
l
-
9
8
Oc
t
-
9
8
Ja
n
-
9
9
Ap
r
-
9
9
Ju
l
-
9
9
Oc
t
-
9
9
-
Y vs. S&P 50
exed Price Pe
S&P 500 / Electr
United States Tr
to show hist
ars to suppor
there is a hist
such as the e
historically hi
al Markets

UTY) has rise
group now t
round a 10%
ctor’s current
broader ma
normal econo
nd REITS. H
ll considered.
rmance of
Ja
n

0
0
Ap
r
-
0
0
Ju
l
-
0
0
Oc
t
-
0
0
Ja
n
-
0
1
Ap
r
-
0
1
Ju
l
-
0
1
Oc
t
-
0
1
Ja
n
-
0
2
0
formance
ic Utilities -IND (
easury Bond (3
rical price pe
a more attra
orical inverse
rly to mid-20
gh natural gas

Inc., Mem
n 4.2% year-t
ades at a 14.2
remium to th
premium valu
ket confidenc
y. Implicatio
igher interest
However, we
S&P Elect
(December 31
Ju
l
-
0
2
Oc
t
-
0
2
Ja
n
-
0
3
Ap
r
-
0
3
Ju
l
-
0
3
Oc
t
-
0
3
Ja
n
-
0
4
Ap
r
-
0
4
TY)
Y) Yield
rformance of
tive safety pl
orrelation wit
0s when the
pricing.
ber NYSE/
o-date, underp
x P/E multiple,
S&P 500, co
tion could ra
in a robust
s for interest
rates are likel
elieve these
ric Compa
, 1996 – June

-
Oc
t
-
0
4
Ja
n
-
0
5
Ap
r
-
0
5
Ju
l
-
0
5
Oc
t
-
0
5
Ja
n
-
0
6
Ap
r
-
0
6
Ju
l
-
0
6
&P electric c
y into our se
bond yields
tilities experie
FINRA/SI
performing the
compared to
pared to mor
idly converge
U.S. economy
ates only serv
to present
igher yielding
anies and
24, 2013)
-
Ja
n
-
0
7
Ap
r
-
0
7
Ju
l
-
0
7
Oc
t
-
0
7
Ja
n
-
0
8
Ap
r
-
0
8
Ju
l
-
0
8
Oc
t
-
0
8
ompanies co
ctor during p
nd utility sect
ced growth d
PC
10.3% return
13.20x P/E
historical dis
even closer t
, driving inve
e to exacerba
short-lived h
sectors will fe
30-Year Tr
Jan
-
Ap
r
-
0
9
Ju
l
-
0
9
Oc
t
-
0
9
Ja
n
-
1
0
Ap
r
-
1
0
Ju
l
-
1
0
Oc
t
-
1
0
Ja
n
-
1
1
pared to the
riods of heigh
or performanc
iven by the m
in the broade
ultiple on the
ounts of 25-3
or at a disc
tment into ot
e the downsid
adwind to th
l a more lasti
easury Bo
Apr
-
Ju
l
-
1
1
Oc
t
-
1
1
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n
-
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r
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l
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30-year Trea
tened market
. The correla
rchant subset
Page 9 of 6
r market (SPX
S&P 500 inde
5% (prior to th
unt to the S&
er sectors wit
risk of highe
entire marke
g impact.
nd Yield
Ju-
2%
3%
4%
5%
6%
7%
8%
30
-
Y
r

T
-
B
o
n
d

Y
i
e
l
d

%

ury bond yiel
uncertainty.
ion has broke
benefiting fro
8
).
.

-
,
.

June
8
9
10
11
12
13
14
15
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Page 10 of 6
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also note th
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KeyB
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UP INVE
dly speaking,
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more environ
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industry that
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s on equity,
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tly, however,
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tments for an
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TMENT T
we believe the
(with an outl
potential to r
entally frien
ojections, as
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ust continue
d and compa
a return on i
ugh public a
We believe t
xtending depr
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l some of th
ult of the rece
everal factor
e factors inclu
for Populist
electricity (and
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s to timely an
ental Capital
nvironmental r
ve Rate Base
ay look for a tai
l Cost Pressu
have increased
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commissions
our concerns
hort term, we
he U.S. econ
gs in Maryla
move towar
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ilities was 12.
S
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HESIS
long-term fun
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te base nee
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overall energ
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egulations tha
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often use a spr
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believe that n
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restrictive ou
ssions; avera
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Chart 5.
Source: Regulator

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ention that re
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cessary infra
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s of debt and
ricing and co
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es more scr
ocal politics th
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believe a wea
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pressured t
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tinued nuclea
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tinized, espec
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sector must
olitical winds.
ow organic gr
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electric utiliti
d Equity R
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We are gene
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ovements an
present as re
large capital e
cern is that,
ease the sti
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r cost overrun
urther impact
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tact, as oppo
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pared to the
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xpenses to ul
t some point,
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nclude reasse
ital structure.
prompted re
d by increas
k impacting t
to political an
iods of a wea
y commoditie
ces.
billions of dolla
n the sector,
competition f
calating price
low treasury
turn levels.
ighted above
couraged by r
evidenced by
tor local regul
lower regulat
n 1990 comp
Page 11 of 6
rtunities exist i
e level of pla
infrastructur
ervative in o
roader marke
n industrial to
l investment i
imately recov
rising electrici
rs, putting th
sing allowabl
hese negativ
ulators to forc
d scrutiny an
e sector in th
regulatory ris
economy. W
, and there ar
s to meet mor
e believe som
r infrastructur
tag.
ields, as stat
needs time t
gulators. Mor
politicization
ation impactin
ed utility equi
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8
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in ov

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How
on th
KeyB
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2013
USTRY T
COMMODI
ral gas pricing
ts (see Chart
n vigilant ove
lities had prev
y at current lo
to pursue a
tunity or risk t
Ch
Source: Bl
GHTENED IM
major focus o
esses were di
deal to mitig
anies had pur
ra of focus o
o craft innova
kely set the
ure to regula
Energy Inco
ommodity and
rall customer
CK PERFO
strong (if not v
y have typic
in the econo
of outperfo
ver, the unreg
existing coal
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anc Capit
Researc
EMES
Y PRICES
, remaining st
6). Given avai
the potential
iously procure
pricing to o
gregation of s
suppliers.
art 6. Co
oomberg
PORTANCE
f many utilitie
ested or shu
te risk and e
ued diversifie
the core regu
ive solutions
tage for futur
ory developm
porated (GXP
construction
lectric bills, e
RMANCE DIV
olatile) commo
lly outperform
ic downturn,
mance in spr
ulated genera
fleet. This ent
1
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AND A AILA
ubbornly in a t
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supply durin
er customers
upply to nego
mparison
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s over the p
tered, and the
posure to vol
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lated utility, th
o issues, suc
growth of th
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NYSE), IDAC
aterials prici
en at the exp
ERGENCE B
dity cycle had
d the rest of
as natural ga
ng 2009, an
ors had recen
usiasm has
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Inc., Mem
LE C PACI
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and the sharp
marketers to
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f Spot, 12
(December 31
TORY SUCC
ast few years
business foc
atile market c
to provide a
importance
as quick rec
e regulated b
n, American
ORP, Pepco
g will likely in
nse of shareh
ASED ON C
for years bee
he group, as
, coal and po
investor ent
ly started to a
aned somewh
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nd, continues
decline in wh
ndercut pricin
nificantly hig
ively priced al
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-Month an
, 2003 – June

ESS
has been the
s returned to
onditions, futu
ditional growt
f regulatory su
very of enviro
siness. We
lectric Power
oldings and
rease regulat
olders.
OMMODITY
n favorable for
epicted in Ch
er prices hav
usiasm in th
tract interest
t as economi
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Date
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FINRA/SI
COMPETIT
to drive the m
lesale power
in deregulat
er pricing. We
ernative. Man
n behalf of t
d 24-Mont
24, 2013)
“back-to-basi
he core utility
re growth pla
to offset slo
ccess has co
nmental or dis
elieve the co
, CMS Energ
cel Energy In
ry risk as reg
EXPOSURE
companies th
art 7. Since 2
e fallen with a
commodity
s investors st
concerns ha
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ION
arginal clearin
ricing as nat
d markets, su
believe comp
y local govern
eir residents,
h Natural
cs” approach,
operations.
s have also
er growth in t
e back to the
tribution syste
mpanies that
, DTE Energy
. (XEL-NYSE
lators seek w
t have expos
09, the com
sluggish eco
ubgroup has
rted to weigh
e intensified.
ep
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price of pow
ral gas prices
h as Ohio an
titive market
ment municip
providing anot
Gas Prices
through whic
hile this scen
ome into foc
he regulated
forefront. Co
improveme
currently hav
Duke Energ
. We believe
ys to minimiz
re to natural
odity subgrou
omic outlook.
remained so
the impact of
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Page 12 of 6
er in wholesal
remain low, w
Pennsylvani
rs could lock i
lities have als
her competitiv

ch non-strategi
rio has done
s. In the pas
usiness. In thi
panies that ar
t expenditure
high levels
, Exelon, Gre
return of hig
e the increase
as and or coa
p has fared th
Despite a bri
ewhat mute
PA regulation
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e

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June
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liquid
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year-
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mark
slowi
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KeyB
Equit
2013
elieve that the
ation of long
importer); vo
; opening of
ation that any
iors (conserv
Source: FactSe
2011 performa
verse investo
mic concerns
we attribute
al Vermont, r
nd as invest
sing the stren
2012 saw th
t recovery, o
g growth in t
tors hope for
resolve its so
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c
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6
Re
t
u
r
n
anc Capit
Researc
rapid and pro
ommodity po
latility arising
ew unconven
economic rec
tion).
Char
t
nce for comm
s avoided the
continued thr
to any enthu
spectively. T
rs took profit
th of global e
broader mar
ly to see that
e United Sta
nother round
ereign debt i
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al Markets

ounced price
itions; reduce
rom marketpl
ional natural
overy may be
t 7. Price
odity-focused
e generators
ughout the y
iasm around
e broader ma
amid marke
onomic recov
et outperform
enthusiasm p
es. A late su
of quantitativ
sues, despite

-
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p
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Inc., Mem
declines were
demand in l
ce assumptio
as plays (wit
longer-dated
Performan
(December 31
uclear names
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ar. Smaller,
&A activity
rket index out
turmoil and
ry.
all electric ut
ll back mid-y
mer broader
easing by th
igns of slowin
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Dat
er NYSE/
driven by sev
ight of a slow
s on the effe
improving pr
nd that dem
ce of Diff
, 2006 – June

took a sever
cused name
ertically integ
nd the April
erformance
ought safety
lit segments
ar due to rea
market rally a
Federal Res
g growth in th
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FINRA/SI
eral factors: th
ng global eco
cts of various
duction tech
nd is down d
erent Utilit
24, 2013)
drop in mid-
never truly r
ated names s
nd May anno
arly in 2011 l
in our sector
(see Chart 8)
ppearing Euro
pears to be
erve of the U
United State
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collapse of
nomy (especi
government
ology) expan
e, in part, to
y Subgrou
March during t
covered as
owed meani
uncements of
st its ground
in names off
as investors
pean sovereig
ue to sector
ited States a
.
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ajor banks lik
lly China, wh
timulus progr
ing gas supp
a shift in cha
ps
he Japanese
eak power pr
gful outperfor
the acquisitio
against integr
ring liquidity
ained confid
n debt concer
otation away
d that Europ
T&D O
Large
Small
S&P 5
Comm
Page 13 of 6
ely drove force
ch had been
ms around th
y; and invest
ging consum

uclear crisis a
ces and glob
ance in 201
ns of DPL an
ated utilities b
nd yield whil
nce in broad
s and signs
rom utilities a
will be able t
nly
ertical
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Chart
Source:
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ite several leg
, climate cha
re drilling to l
ery is likely to
pts by Repub
n, although g
near term, th
challenges
e the dynami
gust 21, 201
ruled that th
benefits. We
ements as th
d to hear whe
el it is still im
state, consid
ards, and und
y/climate-rela
and their ren
Re
t
u
r
n
anc Capit
Researc
8. Year-t
FactSet
VE ENERGY
islative bills o
ge, federal R
ssen the U.S.
prevent the is
icans in Cong
tting past a D
e EPA contin
dd uncertaint
of how a ne
, the District
EPA exceed
believe this d
EPA reworks
her the EPA
portant for ele
r the busine
erstand the p
ed (carbon) le
wable portfoli
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
De
c
-
1
2
-
al Markets

o-Date S&
EFORM AT
ffered over th
newable Por
reliance on f
ue from gaini
ress to legisla
mocratically-c
es to advanc
around timel
Congress, th
ourt of Appe
d its statutor
cision will onl
the rules and
xceeded its a
tric utility inv
s impact as
ssible implica
islation, if en
standards.

Ja
n
-
1
3
Fe
b
-
1
3
Inc., Mem
500 vs.
(December 3
AN IMPASS
e past several
folio Standard
reign oil] is un
g traction ov
e, restrict or
ntrolled Sen
its rules on a
ines and ho
EPA and th
ls for Washin
authority in
y serve to furt
process to co
thority in crafti
stors to beco
to how an in
ions (favorabl
cted, may ha
Ma
r
-
1
3
Ma
r
-
1
3
ber NYSE/
BCM Elec
0, 2011 – June

E; EPA EMI
years, we bel
s (RPS), ren
likely to gain
r the next few
elay EPA aut
te and overridi
host of polluti
aggressively
industry wor
gton, D.C. ne
ow the rules
her delay impl
ply within its
ng CSAPR.
e aware of t
estor-owned
and unfavor
e on their utilit
Ma
r
-
1
3
Ap
r
-
1
3
Date
FINRA/SI
tric Utility
24, 2013)
SSIONS RU
ieve that com
wable energy
assage this y
years, in our
hority or fundi
ng a Presiden
n criterion un
environmenta
together pos
ated the Cro
were crafted
ementation of
statutory auth
e renewable
utility would
ble) that a p
y investments.
pr
-
Ma
y
-
1
3
Ma
y
-
1
3
PC
Segment
ES MOVE F
prehensive en
qualifying so
ar. An outloo
iew. We do b
g to regulate
ial veto would
der the Clean
l regulations
-election is so
s State Air P
nd applied to
pollution cont
rity. On June
nergy resour
ddress any
tential federal
Our appendix
Ju
n
-
1
3
Performa
ORWARD
ergy reform [c
rces and pro
for continued
lieve there mi
greenhouse
prove difficult.
Air Act and C
ill be imple
mething to wa
llution Rule (
the states, r
ols intended t
24, 2013, the
es available t
tate mandate
RPS, EPA m
provides mor
Small Vertical
Large Vertical
S&P 500
T&D Only
Commodity
Page 14 of 6
ce

arbon cap-an
osals such a
slow economi
ht be renewe
ases, includin

ean Water Ac
ented, and w
ch. As recentl
SAPR) as th
gardless of th
meet CSAP
Supreme Cou
o each utility i
or renewabl
ndate or oth
information o
8
d-

c

.

t

r

June
JAP
A sh
at th
earth
State
and

The
Mile
and
rene

New
will a
occu
drive
volati

An A
expo
desig
fleet.

On F
appr
majo
the p
natio
most

In M
inclu
safet
cont
resp

CO
Whil
long-
gene
and
abilit
parti
diffic
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allow
rece

The l
Prog
metri
som

KeyB
Equit
2013
N NUCLEA
arp decline oc
Fukushima
uake and tsu
s to impact nu
onsiderations
ituation is als
sland is consi
ost overruns.
als could fac
nuclear const
gue that mod
rence of an e
incremental
lity. Public an
ugust 23, 201
ure saw a b
ned, market c
ebruary 9, 20
ved by the U.
reactor comp
lant as a res
’s nuclear pl
expensive an
rch 2012, th
e reassessin
of spent fu
inments. In e
nded that the
ST ESCALAT
e recent prices
erm trend of
ation remains
omponents (t
to hedge co
ular, on the r
lt as receivin
ern Compan
the Commissi
tly, Southern
ong-term tren
ess (CWIP), t
s. Additional
rate relief.
anc Capit
Researc
CRISIS HI
curred in mid-
uclear power
nami. With 20
lear power. H
f specific rea
likely to fuel
ered to have
Existing plant
further public
uction, which
rn plants are
ent that desig
eneration ca
political perc
1 earthquake
ief sell-off. H
oncerns were
2, Southern
S. Nuclear R
nents. In a fo
lt of lessons l
nts in respon
complicated
NRC manda
the nuclear
l pools and t
rly June 201
ew regulation
ION IN NEW
have come of
rising constru
a moving tar
rbines and bo
ts. We believ
gulated side,
regulatory pr
subsidiary Mi
on to protect
ompany indic
of rising co
allow utilitie
ost pressure
al Markets

GHLIGHTS
March 2011 for
complex in J
of U.S. po
owever, we d
tor designs, a
increased op
been a major
on the publi
scrutiny.
as already b
impler in desi
redundancie
acity decision
ptions around
on the U.S.
wever, as ne
alleviated. Nu
ompany’s co
gulatory Com
r-to-one vote,
earned at Fu
e to Fukushi
f the changes
ed new regul
ower industry
improving v
, NRC issue
s were manag
GENERATI
f of their earli
ction material
et, as worldwi
lers) would re
this presents
there exists
-approval wit
ssissippi Pow
nd assure cu
ted it would e
ts increasingl
to undertake
on ratepayer

Inc., Mem
ISKS TO N
all equity seg
pan that was
er derived fro
believe U.S.
well as the s
osition to nucl
factor in the e
safety perce
en delayed b
n and design
would suppo
making to fa
nuclear energ
ast Coast dr
ws started to
lear propone
bined constr
ission (NRC
dissenting for
ushima and i
a should be s

tions for “les
for protection
nting system
new guidelin
eable from bot
ON BUILD
er highs due to
costs could
e demand fo
ain fundame
challenges to
chicken-and
out firm pricin
r agreed to a
tomers again
xceed its cost
necessitates
construction
pose the risk
ber NYSE/
CLEAR PO
ments, includin
severely dam
nuclear ene
uclear energ
fficiency of b
ar power, as
nd of U.S. nu
tion bubble (
the recessio
d to shut the
sedly prevent
or natural g
will contribut
ve a short-liv
flow that the
ts touted the
ction and op
, clearing the
er Chairman
general feel
ped up, partic
ons learned”
against eart
in boiling-wa
es for harden
h technical an
the global ec
resume as t
construction
tally volatile.
both unregula
egg problem
g. For exampl
cost cap on i
t uncontrolled
cap by over $
the need for
ithout signific
of regulators
FINRA/SI
ER INDUST
g the broader
aged and lea
rgy, we do no
is likely to be
ckup systems
did the Three
lear construct
ermont Yank
, is likely to s
selves down
rom happenin
s, which coul
to policy disc
d negative in
plants suffer
incident as a
rating licens
way for the C
Gregory Jacz
that the imp
larly for seis
rom Fukushi
quakes, flood
ter reactors
ed venting an
cost perspec
nomic crisis s
e global eco
materials com
This is exacer
ed and regul
in that securi
, in order to
ts 582MW Ke
cost increase
00 million and
rate-making
ntly weakeni
uthorizing lo
PC
RY
market, as co
ing radiation
envision a k
impacted by i
in the event o
Mile Island a
ion already hi
e, for exampl
e higher opp
in emergencie
g. The Japan
impact dive
ussions.
vestor reactio
d no damage
example of t
for Vogtle 3
mpany to pr
o favored saf
lementation ti
ic risks, whic
a, to be in e
s or station bl
ith General E
d other safet
tives.
lowing constr
omy reboun
modities (stee
bated by long
ted investme
g pricing wit
ecure the pro
mper County
from its origi
took a 1Q13
echanisms, s
g their balan
er ROEs in f
cerns arose fr
ue to the co
ee-jerk reacti
creased scrut
station black
d Chernobyl i
dered by con
) and others
sition. Propo
s. Opponents
se accident is
sity and driv
as compani
and all syst
he safety of t
nd 4 new nu
ceed with full
ty enhancem
eline for co
have the po
ect by the en
ckout events,
lectric Co. M
improvement
ction demand,
s. The cost
, concrete an
construction ti
t in new gene
out a regulat
ect’s expecte
GCC plant at
al $2.7 billion
harge.
uch as Const
e sheet, cash
ture rate proc
Page 15 of 6
rom the disast
bination of a
n in the Unite
iny, inspection
ut conditions.
cidents. Thre
truction dela
up for licensin
ents of nucle
ill cite anoth
likely to furth
power pricin
s with nucle
ms reacted a
e U.S. nucle
clear units wa
construction
nts be made
pliance for th
ential to be th
d of 2016, th
enhancing th
rk I or Mark
. The indust
we believe th
f building ne
copper), lab
es and limite
ation plants. I
ry buy-in is a
final approva
$2.88 billion t
estimate. Mor
uction Work I
flow and cred
edings to off
8
er

r
r
r

r

r

f
t

t

I

r

l,

it
r

June
M&A
We e
partic
be ab
gener
the lo
larger
prese
make

POS
C
A
p

N
W
C
c
e

POS
D
D
h
b

E
In
m
w
e

REC
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O
p
C
5

M
O
(
to
to

D
O
c
in

Im
d
o
C
a
w

KeyB
Equity
2013
A ACTIVITY
xpect that man
cularly with the
ble to realize th
rally repaired (a
ong term. The o
r players to loo
ence or through
e attractive targ
SSIBLE ACQU
Cleco Corpora
As a small, sin
potential acquis
NiSource, Inc.
We believe NiS
Company (SUG
considerable ris
executing on its
SSIBLE ACQU
Dominion Res
Dominion was
has stated that
believe that the
Exelon Corpor
n our view, EX
merchant elect
would be cons
earnings drop a
CENT M&A A
TECO Energy,
On May 28, 20
privately held N
Company had t
509,000 custom
MidAmerican a
On May 29, 20
NVE-NYSE) fo
o weak utility p
o 10%, more in
Duke Energy C
On July 2, 2012
country’s larges
n the six states
mmediately fo
directors) voted
of the combine
CEO switch. O
as an initial fir
watching for sig
anc Capita
y Research
Y ON THE
ny utility execut
recent pick-up
e greatest amo
and the potent
outlook for an e
ok for opportu
h the addition
gets.
UIREES
ation (CNL-NY
ngle-state regu
sition target. W
(NI-NYSE)
Source, Inc. is
G-NYSE) have
sk of achieving
s strategic initia
UIRERS
ources, Inc. (D
rumored to hav
t it continues t
e Company wou
ration (EXC-NY
XC may seek
ric generation
istent with wha
as favorable he
ACTIVITY UP
Inc. (TE-NYS
013, TECO E
New Mexico G
trailing 12-mon
mers.
and NV Energ
013, Berkshire
or an all cash c
performance, th
n line with utility
Corporation (D
2, Duke Energ
st utility, having
s of North Caro
ollowing the m
d out incoming
ed company. T
n December 3
st step in repa
gns that regulat
al Markets
h
RISE
tives are lookin
p in M&A activi
ount of synergi
ial for all-stock
extended period
nities to gain s
of more stable
YSE)
lated utility in
We expect forec
perceived as
e served to fue
g reasonable ap
atives.
D-NYSE)
ve been intere
o focus on its
uld consider an
YSE)
through acqu
fleet. This cou
at we saw PP
edges started e
PDATE
E) and New M
nergy, Inc. (TE
Gas Company
nth EBITDA of
y, Inc. (NVE-N
Hathaway sub
consideration of
he premium ap
y deal premium
DUK-NYSE) an
y Corporation
g about 57 GW
olina, South Ca
erger close, t
Progress Ene
The North Caro
, 2012, the NC
airing relations
tion is moving f
Inc., Memb
ng at the poten
ty (see Table 6
es, as these sa
k deals to offer
d of low power
scale to endur
e regulated ope
Louisiana with
asted free cash
an acquisition
el this view. H
pprovals across
ested in acquiri
organic growt
ny opportunities
uisition a more
uld be accomp
PL Corporation
expiring.
Mexico Gas Co
E-NYSE) anno
for $950 millio
$86 million for
NYSE)
bsidiary MidAm
f $23.75 per sh
ppears to be ex
ms.
nd Progress E
(DUK-NYSE) a
W of domestic g
rolina, Florida,
he new comb
rgy CEO Bill Jo
olina Utilities C
CUC agreed to
ships with regu
forward in a po
ber NYSE/
tial synergies o
6). Companies
avings are gen
further improve
r prices may ac
re weakened m
erations. On th
h a service ter
h generation co
target. The an
However, we b
s the board. Fu
ng Progress E
th plan and on
s that were acc
e stable earnin
plished through
(PPL-NYSE)
ompany
ounced its inte
on, including th
the period end
merican Energy
hare. This repre
xaggerated. Ba
Energy, Inc.
and Progress E
generating cap
Indiana, Kentu
bined company
ohnson and re
Commission (N
a settlement w
ulators. We ar
ositive manner.
FINRA/SIP
of a strategic a
s with substant
nerally outside t
ement), we co
ccelerate M&A
markets and ca
he regulated s
rritory next to E
ould be attracti
nnounced acqu
believe a prese
urther, we belie
Energy away fro
n achieving a 5
cretive to earni
ngs and cash
h the acquisitio
do earlier whe
ention to acqu
he assumption
ding January 3
y announced t
esented a 23%
ased on a more
Energy, Inc. (P
pacity serving a
ucky and Ohio.
y Board (10 le
einstalled outgo
NCUC) began
with Duke Ener
re mindful of u
.
PC
and well-execut
ial unregulated
the reach of re
nsider addition
to achieve cos
apital needs th
ide, we believe
Entergy, we be
ive to acquirers
uisition and bid
ence in severa
eve current ma
om Duke Ener
5-6% long-term
ngs and share
flow stream to
on of a more re
en faced with
uire from Cont
n of $200 millio
31, 2013. New
he proposed a
% premium to th
e recent closin
PGN) complete
approximately
.
egacy DUK di
oing Duke Ene
investigative h
rgy to resolve
upcoming rate
ted merger with
d operations wo
egulators. With
nal consolidatio
st synergies. W
hrough a grea
e smaller, sing
elieve Cleco C
s.
dding war for S
al jurisdictions
anagement is k
rgy. Since then
m earnings gro
holder value.
o dampen the
egulated entity
the prospect o
inental Energy
on of debt. Ne
Mexico Gas C
acquisition of N
he previous clo
g price, the pre
ed their merger
7.1 million ele
irectors vs. fiv
rgy CEO Jim R
hearings into t
the investigatio
e case proceed
Page 16 of 6
h great interest
ould most likel
balance sheet
on to be likely i
We would expec
ter unregulate
gle-state utilitie
Corporation is a
Southern Unio
would presen
keen to continue
n, the Compan
owth target. We
volatility of it
y. This strateg
of a precipitou
y Systems LLC
ew Mexico Ga
Company serve
NV Energy, Inc
osing price. Due
emium is close
r to become the
ectric customer
ve legacy PGN
Rogers as hea
he post-merge
on. We see thi
dings that bea
8
t,
y
s
n
ct
d
s
a
n
nt
e
y
e
s
y
s
C
s
s
c.
e
er
e
s
N
d
er
s
ar

June

Date
Anno
5/29/
7/22/
2/21/
7/12/
4/28/
4/20/
3/2/2
1/10/
12/7/
10/18
8/13/
4/28/
4/21/
4/11/
2/11/
10/20
10/26
6/25/
2/26/
2/7/2
7/8/2
7/5/2
4/25/
12/19
Notes:
Deal
1) De
2) 1-
3) [2
4) Pri
Sourc
KeyB
Equit
2013
nced Acqui
2013 Berksh
MidAm
2012 NRG E
2012 Fortis I
2011 Gaz M
011 Exelon
011 ES C
11 PPL C
011 Duke
010 GL R
2010 Northe
010 Blacks
010 PPL C
010 Calpin
010 Mirant
010 FirstEn
2008 Exelon
2007 Macqu
007 Iberdro
007 KKR
07 Great
06 MDU
06 Macqu
006 Babco
2005 FPL G

currently pending
al transaction valu
ay closing stock p
-day average clos
r to previous agr
: Company data,
anc Capit
Researc
er
ire Hathaway's
rican Unit
nergy Inc.
nc.
etro L.P
Corporation
rporation
rporation
nergy Corporati
sources Inc.
st Utilities
one Group, L.P.
rporation
Corporation
orporation
ergy Corporatio
Corporation
rie Consortium
la SA
lains Energy In
esources Grou
rie Consortium
k & Brown
oup, Inc.
in italics
(includes debt a
ice premium
ng stock price pre
ement announced
eyBanc Capital M
al Markets

Tabl
Acquiree
NV Energy
GenOn En
CH Energy
Central Ve
Service Co
Constellati
Inc.
DPL Inc.
Central Ne
E.ON UK p
n Progress E
Nicor Inc.
NSTAR
Dynegy In
E.ON U.S.
Electric an
Utilities)
Conectiv E
Co.
RRI Energ
llegheny
NRG Ener
Puget Ene
Energy Ea
TXU Corp.
. quila Inc.
Cascade N
Duquesne
Inc.
NorthWest
Constellati
Inc.
ssumed)
ium]
on May 30, 2011
rkets Inc. estimat

Inc., Mem
5. Rece
ergy Inc.
Group
rmont Public
p.
n Energy Grou
works (from
lc)
nergy, Inc.
.
(Louisville Gas
Kentucky
ergy Holding
, Inc.
nergy, Inc.
y, Inc.
gy, Inc.
t Corporation
tural Gas Corp
ight Holdings
rn Corporation
n Energy Grou
es
ber NYSE/
t Utility
Consideration
100% Cash
100% Stock
100% Cash
100% Cash
, 100% Stock
100% Cash
100% Cash
100% Stock
40% Cash and
Stock
100% Stock
100% Cash
(Failed)

100% Cash
100% Cash
100% Stock
100% Stock
100% Stock
(Failed)
100% Cash
100% Cash
100% Cash
55% Cash and
Stock
100% Cash
100% Cash
100% Cash
(Failed)
, 100% Stock
(Failed)
FINRA/SI
&A Activi
Offer P
Share
$23.75
0.1216
$65.00
$35.25
0.930 s
$30.00
N/A
2.6125
60% $21.20
0.8382
1.312 s
$4.50 a
($5.00
N/A
N/A
0.353 s
0.667 s
0.485 s
$30.00
$28.50
$69.25
45% $1.80 a
0.0856
$26.50
$20.00
$37.00
$62.02
PC
ty
rice Per Imp
Ann
shares
ares
shares
and
shares
ares
annc.
inal)
ares
ares
ares
nd
shares
lied Value at
ouncement1
$5.6 billion
$3.9 billion
$1.5 billion
$704.1 million
$10.6 billion
$4.7 billion
$6.40 billion N
$25.7 billion
$3.1 billion
$7.56 billion
$4.6 billion
$7.63 billion
$1.65 billion
$1.63 billion
$8.5 billion
$6.15 billion
$7.4 billion
$8.50 billion
44.16 billion
$2.8 billion
471.2 million
$2.59 billion
$2.23 billion
14.42 billion 0
Page 17 of 6
Premium at
nnouncement2
23.18%
20.60%
10.50%
44.9%4
12.50%
8.70%
/A – Subsidiary
.9%; [6.4%] 3
13.30%
1.90%
61.80%
N/A - Private
/A - Subsidiary
4.40%
31.60%
36.70%
25.30%
27.40%
15.40%
-2.70%
23.50%
21.70%
15.30%
65%; [15.0%] 3
8

June
SH
Tow
by s
all co
com
defe
sect
debt
mark
econ
senti

Histo
short
Augu
short
risk

KeyB
Equit
2013
RT INTE
ard the end of
me companie
ntributed to th
any manage
sive play ami
r became pre
ssues appear
t declines in
mic concern
ent.
Ch
Source: FactSet
rically, underp
interest for th
st, largely attri
interest has c
n appetite and
10.5x
11.0x
11.5x
12.0x
12.5x
13.0x
13.5x
14.0x
14.5x
15.0x
15.5x
16.0x
16.5x
17.0x
D
-1
12

m
o

F
w
r
d

P
/
E
anc Capit
Researc
EST OVE
2010, sector c
heading into
group tradin
ents during t
broader mar
ium to the b
d to dampen
July 2011. In
drove reliabl
art 9. For
erformance in
e group had
butable to the
rept up as the
interest rate
Ja
n
-
1
1
Fe
b
-
1
1
Ma
r
-
1
1
Ap
r
-
1
1
al Markets

RVIEW
oncerns of a lo
new year, c
at a discoun
e 1H11 earni
et concern of
oader market
ny enthusias
late 2012 an
outperforma
ward P/E

our sector ha
growing bias
close of DUK
group outperf
orries negativ
Ma
y
-
1
1
Ju
n
-
1
1
Ju
l
-
1
1
Au
g
-
1
1
KB
Inc., Mem
nger-dated U.
allenged pow
to the S&P 5
gs seasons,
a slower glo
A pick-up in
for a quicke
into 2013,
ce. Recent F
Compariso
(December 3
provided opp
as the sector
s acquisition
rmed with in
ly impacted t
-
Oc
t
-
1
1
No
v
-
1
1
De
c
-
1
1
Ja
n
-
1
2
M Utility Index
ber NYSE/
S. economic r
r prices for m
0. We believ
eading to ren
al economic r
M&A activity,
or stronger th
n outlook for
d commentar
n of KBC
1, 2010 – June

rtunities for i
outperformed
f Progress E
estors looking
e utilities.
Fe
b
-
1
2
Ma
r
-
1
2
Ap
r
-
1
2
Ma
y
-
1
2
S&P50
FINRA/SI
ecovery (damp
rchant gener
that many of
wed confide
covery, as s
double-dip U.
an expected
continued ac
y has driven
M Utility C
24, 2013)
vestors to co
. The short in
ergy, as arbit
for yield. Cov
Ju
n
-
1
2
Ju
l
-
1
2
Au
g
-
1
2
Se
p
-
1
2
Rel
PC
ning electric
tors and ques
these topics
ce in the sta
en in Chart 9
. recession f
conomic reco
ommodative
nderperforma
overage v
ver their short
erest fell pre
ageurs unwo
ering appears
No
v
-
1
2
De
c
-
1
2
Ja
n
-
1
3
Fe
b
-
1
3
tive P/E
emand), wea
ions around d
f concern wer
ility of our in
where the rel
ars and Euro
ery, and led t
onetary polic
nce around a
s. S&P 500
positions. Thr
ipitously from
nd positions.
to have begu
1
1
1
1
1
1
1
1
1
Ma
r
-
1
3
Ap
r
-
1
3
Ma
y
-
1
3
Ju
n
-
1
3
Page 18 of 6
k initial outloo
ividend securi
addressed b
ustry and as
tive P/E of th
ean sovereig
sharp broad
y and lingerin
reversal of thi

ough early 201
May 2012 un
ince that tim
in March as
.88
.92
.96
.00
.04
.08
.12
.16
.20
.24
.28
.32
Re
l
a
t
i
v
e

P
/
E

s

r

il
,

June

Not

Sour
Com
Allete
Amer
Ameri
Avist
CMS
Cleco
Cons
DTE
Domi
Duke
Enter
Exelo
FirstE
Great
IDAC
NV En
NextE
NiSou
North
PPL
Pepc
Pinna
Portla
South
TECO
Wisco
Xcel E
Total
KeyB
Equit
2013
es: 1) ALE resea
2) OTTR res
3) NVE resea
4) POR rese
e: Bloomberg, as
pany
Inc.
n Corp.
an Electric Power C
Corp.
nergy Corp.
Corp.
lidated Edison, Inc
nergy Co.
ion Resources, Inc.
nergy Corp.
y Corp.
Corp.
ergy Corp
lains Energy, Inc.
RP, Inc.
ergy, Inc.
a Energy, Inc.
rce, Inc.
estern Corp.
orp.
Holdings, Inc.
le West Capital Corp
nd General Electric C
rn Compan
Energy, Inc.
nsin Energy Corp.
nergy Inc.
anc Capit
Researc
rch coverage initia
arch coverage init
ch coverage initia
rch coverage initia
f June 24, 201
Share
Ticker O
ALE 39.
AEE 242.
. AEP 486.
AVA 59.
CMS 266.
CNL 60.
ED 292.
DTE 173.
D 577.
DUK 706.
ETR 178.
EXC 855.
FE 418.
GXP 153.
IDA 50.
NVE 235.
NEE 424.
NI 312.
NWE 37.
PPL 592.
POM 248.
. PNW 109.
. POR 77.
SO 870.
TE 217.
WEC 229.
XEL 497.
84
l Markets

T
ted December 4, 2
ated January 17,
ed June 28, 2012.
ted December 4,

(days)
s Current
t Short Ratio
92 5.6
3 1.4
5 0.9
2 3.5
3 4.2
4 5.8
9 3.1
5 1.0
8 2.2
0 1.9
19 2.8
5 2.6
2 3.1
3 1.0
14 3.8
5 0.2
4 4.7
4 2.9
8 3.7
4 2.4
8 6.1
5 2.8
4 1.7
9 2.5
8 5.0
01 4.5
4 1.1
15
Inc., Mem
ble 6. Mo
012. Historical info
012. Historical inf
Historical informa
012. Historical inf
Jun M ay Apr
0.8 0.7 1.0
3.6 2.8 2.8
3.3 3.0 4.3
1.3 1.2 1.1
0.6 9.8 9.4
1.3 1.2 1.2
6.4 7.3 7.1
1.5 1.4 1.5
9.9 7.0 7.4
5.8 5.4 6.8
3.2 3.7 3.8
7.6 18.4 15.6
7.9 9.2 10.5
1.0 0.8 0.7
1.3 1.3 1.0
1.1 0.8 2.3
11.3 9.4 9.4
5.3 4.9 3.9
0.7 0.7 0.8
4.3 13.7 14.2
4.0 13.9 9.0
1.8 1.7 2.2
2.2 1.5 1.6
2.2 11.8 12.0
9.6 9.1 10.9
4.5 4.7 5.1
6.4 5.8 6.6
159 151 152
2013
er NYSE/
nthly Sho
rmation provided f
rmation provided
ion provided for c
rmation provided
M ar Feb Jan D
1.1 1.1 1.1
2.2 1.9 1.9
4.4 4.8 3.7
1.1 1.2 1.3
11.8 12.6 11.9
1.2 1.2 1.1
7.0 6.5 5.7
1.8 2.1 1.3
6.9 7.8 5.0
7.8 8.6 9.6
3.9 3.1 3.1
18.4 15.2 10.4
7.9 5.1 5.7
0.4 0.6 0.5
1.0 1.2 1.1
3.8 2.5 2.4
10.1 9.7 10.2
3.7 3.5 5.6
0.7 0.9 0.9
21.8 24.5 21.1
8.9 7.3 23.6
1.6 1.2 1.5
1.7 1.7 1.9
12.4 11.8 10.6
11.0 11.6 11.3
4.3 4.3 3.2
5.9 7.9 7.4
163 160 163 1
FINRA/SI
t Interest
or comparison pur
or comparison pu
mparison purpos
or comparison pur
ec Nov Oct S
1.0 1.0 0.8
1.9 2.0 2.3
4.0 4.1 6.5
1.3 1.4 1.3
2.2 13.2 9.2
1.2 1.6 1.4
8.1 8.1 6.7
1.4 2.0 1.4
5.2 4.9 3.6
8.8 6.9 6
2.7 2.9 3.7
9.7 9.1 7.7
6.6 7.1 7.1
0.7 1.4 1.7
1.1 1.3 1.3
2.9 3.7 1.8
11.4 11.1 10.7 1
3.7 3.8 3.3
0.9 1.0 0.8
1.4 20.6 19.8 1
3.8 24.6 23.8
1.3 1.7 1.4
1.9 2.1 1.7
11.3 10.5 10.6
11.4 10.5 10
3.0 3.1 2.4
7.3 7.9 6.1
66 167 153 1
(shares in
C
poses.
oses.
s.
oses.
ep Aug Jul Ju
1 1.1 1.1 1.
1.7 1.7 2.4 2.
.2 7.1 6.6 5.
1.4 1.7 2 2.
.4 6.3 4.5 5
1.4 1.7 2.1 2.
.5 6.7 7.3 7
1.4 1.1 1 1.
.3 3.9 3.4 5.
.4 5.8 5.5 24.
.7 3 2.2 2.
9 8.9 8.4 8.
5.1 4.3 5.9 5.
.2 2.9 3.4 3.
1.2 1.2 1.5 1.
1.2 1.4 1.3 1.
.2 7.1 8.5 8.
4.1 3.5 3.1 3.
1 0.9 1.1 1
.4 19.8 18.9 18.
22 22.5 22.8 2
1.6 1.6 1.3 1.
1.8 2.2 2.4 2.
.6 8.8 9.8 8.
10 9.7 8 7.
.2 5.5 7.6 7.
.6 6.1 6.6 6.
49 147 149 17
2012
millions)
M ay Apr M a
3 1.1 1.1
3.9 4.3 4.
5.5 4.4 3.
2.3 2.2 1.
1 5.9 4.2 9.
2.9 2.5 2.
1 7.2 7
1.6 1.9 1.
5.5 4.1 4.
26.2 26.4 23.
2.6 3.1 2.
9.6 10.1 9.
7.7 7.4 6.
10 8.3 7.
1.5 1.3 1.
2.3 2.4 2.
9.9 6.9 5.
4.1 4.9 4.
1 1.2 0.9 0.
19.3 17.4 8.
22.6 22.9 23.
1.9 1.1 0.
2.5 2.2 1.
11 12.4 10.
8.7 8 9.
7.4 6 6.
6.9 4.2 3.
2 191 178 16
Page 19 of 6
2011
F eb Jan Dec
1 1 1 1.2
3.5 3.2 3.7
4.1 4.9 5.6
1.9 2.2 2.4
10.1 13.5 11.4
3 2.5 2.7
7.2 8.2 11.3
1 1 1.6
5 4.6 5.4
1 18.7 17.1 17.3
2.8 3.1 3.5
43.2 40.4 38.3
5.9 7.4 4
6.3 5.9 5.8
1.2 1.4 1.5
4.8 1.2 2.2
6.1 8.1 11.2
6.6 4.1 4.5
0.8 1 1.1
8.6 8.1 9.8
1 8.8 8.6 9
1 1.1 1.4
2.2 2.4 2.6
10.6 11.7 13.7
8.7 8.5 7.8
4.1 4.3 5.9
3.3 3.6 4.3
6 181 179 189

June

EN
Util

KeyB
Equit
2013
RGY: MU
ties – Qui
anc Capit
Researc
TI- UTILI
k Alert:
l Markets

TIES
ore MLP
Inc., Mem
ctivity in
er NYSE/
Infrastruc

FINRA/SI
ure Spac
C
e - reprinte

d from 06/1
Page 20 of 6
2/2013
8

June
PO
PO

KeyB
Equit
2013
TLAND
– Quick
anc Capit
Researc
ENERAL
lert: New
l Markets

ELECTRIC
Projects

Inc., Mem
COMPAN
pdate; Mi
er NYSE/

xed Outc
FINRA/SI
me – exc
PC
erpt reprint d from 06
Page 21 of 6
/04/2013
8

June
NV
NV

KeyB
Equit
2013
NERGY,
– Quick
anc Capit
Researc
NC.
lert: Mr.
l Markets

Buffett Bet

Inc., Mem
on Vega
er NYSE/
- reprinte
FINRA/SI
d from 05/
PC
30/2013
Page 22 of 6

June
NO
NW

KeyB
Equit
2013
THWEST
– Quick
anc Capit
Researc
RN COR
lert: Incr
l Markets

PORATIO
mental G

Inc., Mem

as Reserv
er NYSE/
s Acquir
FINRA/SI
d - reprint
PC
ed from 05 29/2013
Page 23 of 6

June
TE
TE

KeyB
Equit
2013
O ENER
Quick Al
anc Capit
Researc
Y, INC.
rt: TE to
l Markets

Acquire N

Inc., Mem
w Mexico
er NYSE/
Gas Com
FINRA/SI
any - rep
PC
rinted from 05/28/201
Page 24 of 6
3

June

EN
Ele

KeyB
Equit
2013
RGY: EL
tric Utiliti
anc Capit
Researc
CTRIC U
s – Quic
l Markets

TILITIES
Alert: Ca

Inc., Mem
acity Au
er NYSE/
tion Larg
FINRA/SI
ly Disapp
C
oints - rep inted from
Page 25 of 6
05/28/201
8
3

June
CM
CM

KeyB
Equit
2013
ENERG
– Quick
anc Capit
Researc
CORPO
lert: Mic
l Markets

RATION
igan Cas

Inc., Mem
Settleme
er NYSE/
t Annou
FINRA/SI
ced- repri
PC
nted from 5/08/2013
Page 26 of 6

June
EN
ol
05/

KeyB
Equit
2013
RGY: EL
age Opti
07/2013
anc Capit
Researc
CTRIC U
ization T
l Markets

TILITIES
chnology

Inc., Mem
– Another
er NYSE/
Headwin
FINRA/SI
to Load
C
Growth - r printed fro
Page 27 of 6
m
8

June
KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 28 of 6

8

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 29 of 6

June
AVI
AV

KeyB
Equit
2013
TA COR
– Outloo
anc Capit
Researc
ORATIO
Improve
l Markets

N
; Raising

Inc., Mem
2013 Esti
er NYSE/
ate- repri
FINRA/SI
nted from
PC
05/05/2013
Page 30 of 6

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 31 of 6

June
PIN
PN

KeyB
Equit
2013
ACLE W
– Stron
anc Capit
Researc
ST COR
1Q Repo
l Markets

PORATION
ted; Raisi

Inc., Mem
g 2013 E
er NYSE/
timate- re
FINRA/SI
eprinted fro
PC
m 05/03/2 13
Page 32 of 6

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 33 of 6

June
EN
1Q1

KeyB
Equit
2013
RGY: EL
3 Earning
anc Capit
Researc
CTRIC U
Preview
l Markets

TILITIES
- reprinted

Inc., Mem
from 04/2
ber NYSE/
2/2013
FINRA/SI C
Page 34 of 6

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 35 of 6

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 36 of 6

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 37 of 6

June
KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 38 of 6

8

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 39 of 6

June
EN
En

KeyB
Equit
2013
RGY: MU
rgy – Mic
anc Capit
Researc
TI- UTILI
igan Mee
l Markets

TIES
ings Take

Inc., Mem
ways, C
er NYSE/
nstructiv
FINRA/SI
Outlook I
C
ntact - rep inted from
Page 40 of 6
04/19/2013
8

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/

FINRA/SI C
Page 41 of 6

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 42 of 6

June
EN
En
04/1

KeyB
Equit
2013
RGY: MU
rgy – Qui
7/2013
anc Capit
Researc
TI- UTILI
k Alert: M
l Markets

TIES
ichigan C

Inc., Mem
mmissio
er NYSE/
Allows I
FINRA/SI
frastructu
C
re Tracke - reprinted
Page 43 of 6
from
8

June
EN
En
04/1

KeyB
Equit
2013
RGY: MU
rgy – Qui
6/2013
anc Capit
Researc
TI- UTILI
k Alert: I
l Markets

TIES
S Wind T

Inc., Mem
x Credit
er NYSE/
uidance
FINRA/SI
iewed Fa
C
vorably - r printed fro
Page 44 of 6
m
8

June
AL
AL

KeyB
Equit
2013
ETE, INC.
: Investor
anc Capit
Researc
Meeting
l Markets

Takeaways

Inc., Mem
Support
er NYSE/
UY Ratin
FINRA/SI
- reprinte
PC
d from 04/1/2013
Page 45 of 6

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 46 of 6

June
EN
Ele

KeyB
Equit
2013
RGY: EL
tric Utiliti
anc Capit
Researc
CTRIC U
s: Updati
l Markets

TILITIES
g Price T

Inc., Mem
argets - re
ber NYSE/
printed fro
FINRA/SI
m 03/26/2
PC
013
Page 47 of 6

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 48 of 6

June
AM
AE

KeyB
Equit
2013
REN CO
: Mercha
anc Capit
Researc
PORATI
t Assets
l Markets

ON
old, Adju

Inc., Mem
ting 2013
er NYSE/
E - reprint
FINRA/SI
ed from 03
PC
/19/2013
Page 49 of 6

June
NE
NE

KeyB
Equit
2013
TERA EN
: Solid St
anc Capit
Researc
RGY, IN
ry Trade
l Markets

C.
at Meani

Inc., Mem
gful Disc
er NYSE/
unt; Upg
FINRA/SI
ade to BU
C
Y - reprint d from 03
Page 50 of 6
/19/2013
8

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 51 of 6

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 52 of 6

June
AL
AL

KeyB
Equit
2013
ETE, INC.
: Investor
anc Capit
Researc
Meeting
l Markets

Takeaways

Inc., Mem
- reprinte
ber NYSE/
d from 02/2
FINRA/SI
4/2013
C
Page 53 of 6

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 54 of 6

June
EN
Ele
02/

KeyB
Equit
2013
RGY: EL
tric Utiliti
18/2013
anc Capit
Researc
CTRIC U
s: Raisin
l Markets

TILITIES
Price Ta

Inc., Mem
gets Afte
er NYSE/
Group M
FINRA/SI
ltiple Ex
C
pansion - r printed fr
Page 55 of 6
om
8

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 56 of 6

June
EN
Ele

KeyB
Equit
2013
RGY: EL
tric Utiliti
anc Capit
Researc
CTRIC U
s – QA:
l Markets

TILITIES
ichigan L
Inc., Mem
gislative
er NYSE/
Noise Bea
FINRA/SI
rs Watchi
C
ng - reprin ed from 0
Page 57 of 6
2/01/2013
8

June
PO
PO
fro

KeyB
Equit
2013
TLAND
– Quick
m 2/01/201
anc Capit
Researc
ENERAL
lert: Co
3
l Markets

ELECTRIC
pany Win

Inc., Mem
COMPAN
Capacit
er NYSE/

RFP; Aw
FINRA/SI
iting Oth
C
er RFP Ou comes - r
Page 58 of 6
eprinted
8

June
SO
SO:

KeyB
Equit
2013
THERN
Quick Al
anc Capit
Researc
OMPANY
rt: Kempe
l Markets

r County
Inc., Mem
lant Settl
er NYSE/
ment An
FINRA/SI
ounced -
PC
reprinted f

rom 01/25/
Page 59 of 6
2013

June
DO
D –

KeyB
Equit
2013
INION R
Quick Ale
anc Capit
Researc
SOURCE
t: Balanc
l Markets

S, INC.
d Deal R

Inc., Mem
ached on
er NYSE/
ROE Ince
FINRA/SI
tive Add
C
ers - reprin ed from 01
Page 60 of 6
/16/2013
8

June
AL
AL

KeyB
Equit
2013
ETE, INC.
: Fiscal F
anc Capit
Researc
x Present
l Markets

s Wind Op

Inc., Mem
portunity;
er NYSE/
Reiterate
FINRA/SI
BUY Rati
C
ng - reprint d from 01
Page 61 of 6
/03/2013
8

June

KeyB
Equit
2013
anc Capit
Researc
l Markets

Inc., Mem er NYSE/FINRA/SI C
Page 62 of 6

June
AP

Using
on a r
early s
or Ro
redic
who m

s a s
and ID
variabl
numb
reality,
variabl
KeyB
Equit
2013
ENDIX
observed and esti
ver stream, typica
ring becomes th
ky Mountains, ho
ion or model is pe
ke decisions bas
rvice to our clien
CORP) that hav
e of earnings for t
r listed in the tabl
water is stored i
es, uncertainty in t
Runoff Period (A
S
Idaho
Upper Snake Riv
Panhandle Regi
Oregon
Upper John Day
Upper Deschute
Clackamas Basi
Washington
Spokane River
P r
Idaho
Upper Snake Riv
Panhandle Regi
Oregon
Upper John Day
Upper Deschute
Hood and Lowe
Washington
Spokane River
Rese
Idaho
Upper Snake Riv
Panhandle Regi
Oregon
Upper Deschute
Hood and Lowe
Washington
Spokane River
St
Avista Corp. (
Clark Fork Rive
Spokane River (
Idacorp (IDA)
Snake River-Bro
P ortland Gene
Clackamas River
NA - not available
*AVA-owned hydro
Sources: Northwest
anc Capit
Researc
mated sample data
ly during the spri
source of much o
ever, future prec
fect, streamflow f
d on projected riv
s, we track the A
large exposure to
e year, offset by
above is only a "
reservoirs as it
e regression mo
pril - Sept.)
Sno wpack
er Basin
n Basin
asin
Basin
n
asin
ecipitatio n
er Basin
n Basin
asin
Basin
Deschutes Basin
asin
rvoir Sto rage
er Basin
n Basin
Basin
Deschutes Basin
asin
ream Flo w
VA)*
r (75%) - Whitehorse R
5%)
wnlee Reservoi
ral Electric (P OR)
- Estacada
electric generation is split
iver Forecast Center (N
al Markets

T
input into statistic
g and summer se
f the water run-off
pitation may be
recasts can be i
r conditions.
ril through Septe
hydrological river
ny fuel/power sup
robable" forecast
lows down the ri
els, and unforese
Jan Feb
129 113
91 95
143 98
149 101
111 53
91 89
86 76
126 107
85 87
76 84
98 89
140 110
100 98
121 113
112 111
103 107
182 60
pids 102 108
101 101
112 99
106 NA
approximately 75%/25%
FC), National Water an
Inc., Mem
ble 7. Wa
(
al regression mod
sons. In the wes
into riverstreams
more dominant
portant to operati
ber streamflow fo
onditions through
ly cost adjustme
within a forecaste
er basin, where t
n changes are oth
M ar Apr M ay
106 119 161
105 112 142
79 125 217
109 137 164
68 93 222
96 114 167
163 201 158
165 244 138
160 135 208
169 141 144
127 190 115
167 241 147
98 89 85
111 91 77
106 108 113
116 125 132
105 81 155
113 124 140
109 126 151
91 115 133
95 100 110
along Clark Fork/Spokan
Climate Center (NWCC
2013 Wa
(
2011
er NYSE/
er Supply
% of Average)

els, a water supply
ern United States
uring the spring a
river of actual str
nal river users (s
ecast issued by t
ut the year. We b
t mechanisms ea
range assuming
e force of falling
r factors to consi
Jun July Jan
283 NA 73
200 NA 84
NA NA 44
273 NA 49
696 NA 50
277 NA 68
149 77 110
107 40 95
138 35 117
356 107 140
70 97 66
125 28 101
104 136 115
105 102 80
121 132 121
NA NA 130
97 104 43
157 159 86
170 176 99
159 153 84
126 NA 86
e rivers
, U.S. Dept. of Agricultu
ter Supply For
% of Average)
FINRA/SI
Forecast
forecast attempts
snowfall accumu
d summer snow
amflow than sno
ch as hydroelectr
e Northwest Rive
lieve investors m
h utility may have
unobstructed upst
water is used to
er that could affec
Feb M ar Apr
86 89 83
97 96 118
81 72 81
67 74 106
76 79 133
79 92 117
94 98 100
96 230 141
62 150 123
78 183 101
100 189 102
108 215 139
114 116 122
71 108 148
114 113 113
133 151 163
57 179 196
88 98 108
108 133 143
83 102 99
96 97 117
re Natural Resources and
ecast
2012
C
to predict a volum
ation (or snowpa
elt season. On ce
melt, thus maki
c dam o erators,
Forecast Center
y find incrementa
to address hydrol
eam influences t
enerate electricit
t the accuracy of t
May Jun July
64 63 NA
112 131 NA
17 NA NA
89 69 NA
136 179 NA
107 105 NA
95 33 98
98 263 115
61 143 105
92 180 39
105 190 75
100 253 89
109 93 83
89 100 100
114 120 124
173 NA NA
76 97 99
110 97 NA
139 161 160
86 89 90
115 115 NA
Conservation Service(N
of streamflow th
k) in the mountai
tain mountain slo
g forecasting mo
ishermen or even
or companies un
value in these for
gy variability. Th
the natural seaso
. Unknown or un
e water supply fo
Jan Feb M ar
108 97 88
109 96 94
88 85 81
105 99 89
101 90 94
91 83 87
66 49 82
65 74 86
91 56 47
63 53 58
66 83 71
71 70 85
96 100 103
114 107 108
117 110 110
207 166 150
69 51 83
110 102 98
112 104 84
90 79 78
104 99 98
RCS)
2013
Page 63 of 6

at might pass a poi
s during winter a
es in the Cascad
e difficult. While
white-water rafter
er coverage (Avis
casts as a possib
percent-of-avera
nal flow of water.
redictable weath
ecast.
Apr M ay
85 91
96 107
56 NA
83 86
91 82
90 95
105 73
144 78
69 90
92 97
125 139
139 60
104 92
97 93
108 102
152 126
87 87
98 105
80 90
82 95
96 88
8
nt
d
s
o
)
a
e
e
n
r

June

Comp
Allete
Amer
Ameri
Avista
CMS
Cleco
Cons
DTE
Domi
Duke
Enter
Exelo
FirstE
Great
IDAC
MDU
NV E
NextE
NiSou
North
Otter
PPL
Pepco
Pinna
Portla
South
TECO
Wisco
Xcel
Total
Owne
Note:
Sourc
KeyB
Equit
2013
Ta
ny
Inc.
n Corp.
an Electric Power,
Corp.
nergy, Inc.
Corp.
lidated Edison, Inc
nergy Co.
ion Resources, Inc.
nergy Corp.
y Corp.
Corp.
ergy Corp
Plains Energy, Inc.
RP, Inc.
esources Group, I
ergy, Inc.
a Energy, Inc.
ce Inc.
estern Corp.
ail Corp.
orp.
Holdings, Inc.
le Wes
d General Electric
rn Company
Energy, Inc.
nsin Energy Corp.
nergy Inc.
Capacity & Fuel Mi
d % = Operating Ca
ata as of 2011 bas
: SNL Power; Com
anc Capit
Researc
le 8. Do

Tic
AL
A
nc. A
A
C
C
E
D
D
D
ET
E
FE
G
ID
c. M
N
N
NI
N
O
P
P
P
o. P
S
TE
W
X
x Averages
pacity (MW); Used
d on current owner
any data, KeyBanc
al Markets

mestic Ge
Oper. Ca
e (M
E
E
P
A
S
L

E
K
R
C
P

U
E
E
E
TR
L
M
W
R

C
L
4
% = Net Generation (
hip, rounded to ne
Capital Markets Inc.

Inc., Mem
eration C
pacity
)
1,559 Owned:
Used:
17,256 Owned:
Used:
40,127 Owned:
Used:
1,931 Owned:
Used:
7,875 Owned:
Used:
4,624 Owned:
Used:
831 Owned:
Used:
12,390 Owned:
Used:
27,737 Owned:
Used:
38,684 Owned:
Used:
31,293 Owned:
Used:
27,028 Owned:
Used:
19,467 Owned:
Used:
6,757 Owned:
Used:
3,537 Owned:
Used:
576 Owned:
Used:
6,581 Owned:
Used:
45,453 Owned:
Used:
3,334 Owned:
Used:
710 Owned:
Used:
754 Owned:
Used:
19,143 Owned:
Used:
803 Owned:
Used:
6,463 Owned:
Used:
2,825 Owned:
Used:
45,049 Owned:
Used:
4,720 Owned:
Used:
6,867 Owned:
Used:
18,811 Owned:
Used:
403,188 Owned:
Used:
MWh)
rest whole ercent

ber NYSE/
pacity fo
Coal Nuc
80%
91%
59%
84% 1
65%
78% 1
11%
20%
39%
73%
24%
64%
0%
0%
60%
76% 1
30% 1
38%
44% 1
57%
8%
12%
5%
3%
60%
63%
57%
83% 1
29%
33%
69%
91%
14%
23%
2% 1
3%
77%
85%
61%
89%
72%
85%
55% 1
71% 1
0%
0%
27% 1
46%
24%
47%
47%
51% 1
38%
60%
60%
86%
42%
61% 1
40%
54%
age. Totals may not
FINRA/SI
KBCM U
Generating Pl
lea Gas
0% 0%
0% 0%
7% 27%
2% 1%
6% 26%
0% 11%
0% 30%
0% 10%
0% 46%
0% 18%
0% 76%
0% 36%
0% 46%
0% 73%
9% 20%
9% 1%
5% 31%
3% 23%
4% 29%
8% 10%
3% 58%
3% 25%
4% 12%
1% 1%
3% 6%
5% 0%
8% 25%
3% 1%
0% 13%
0% 1%
0% 21%
0% 1%
0% 85%
0% 77%
3% 48%
3% 54%
0% 23%
0% 15%
0% 32%
0% 11%
0% 6%
0% 1%
2% 18%
8% 5%
0% 0%
0% 0%
8% 54%
4% 21%
0% 41%
0% 25%
8% 34%
6% 30%
0% 61%
0% 40%
0% 29%
0% 11%
9% 42%
6% 19%
8% 32%
4% 18%
sum to 100% due to
PC
tilities Co
nts by Fuel Type
Oil Hydro
0% 8%
0% 5%
3% 5%
0% 3%
0% 2%
0% 1%
0% 56%
0% 65%
0% 13%
0% 8%
0% 0%
0% 0%
54% 0%
27% 0%
3% 7%
0% 2%
14% 9%
2% 4%
2% 9%
0% 3%
0% 0%
0% 0%
9% 6%
0% 3%
1% 11%
0% 3%
8% 0%
0% 0%
0% 57%
0% 66%
0% 0%
0% 0%
0% 0%
0% 0%
17% 1%
4% 1%
0% 0%
0% 0%
7% 0%
0% 0%
9% 1%
0% 1%
10% 5%
1% 5%
99% 0%
77% 0%
0% 0%
0% 0%
2% 17%
0% 23%
5% 6%
0% 3%
1% 0%
0% 0%
5% 1%
0% 1%
1% 3%
0% 2%
9% 8%
4% 7%
rounding.
verage Lis
Wind O
4%
2%
0%
0%
1%
1%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
1%
0%
3%
2%
0%
0%
3%
1%
0%
0%
2%
2%
0%
0%
9%
6%
0%
0%
19%
14%
0%
0%
0%
0%
12%
13%
0%
0%
0%
0%
0%
0%
16%
6%
0%
0%
0%
0%
5%
2%
2%
1%
3%
2%
Page 64 of 6

Capacity
the Reported
7% 100%
3%
0% 100%
0%
0% 97%
0%
3% 100%
4%
1% 100%
1%
0% 100%
0%
0% 97%
0%
1% 99%
1%
0% 92%
0%
0% 99%
0%
0% 99%
0%
0% 100%
0%
0% 89%
0%
0% 99%
0%
0% 100%
0%
1% 100%
2%
0% 100%
0%
0% 98%
0%
0% 100%
0%
0% 100%
0%
0% 100%
0%
0% 100%
0%
1% 100%
3%
1% 100%
0%
0% 100%
0%
0% 100%
0%
0% 100%
0%
0% 99%
0%
1% 100%
1%
1%
1%

June

KeyB
Equit
2013

Compan
Ameren
American
DTE Ener
Dominion
Duke Ene
Entergy
Exelon C
First Ene
Great Pla
NextEra
PPL Corp
Pinnacle
Progress
Southern
Xcel Ene
Other Co
Total
Source: U
anc Capit
Researc
y
Corporation
Electric Pow er
y Company
Resources, Inc.
rgy Corporation
orporation
rporation
gy Corp.
ns Energy
nergy, Inc.
ration
est Capital Co
Energy
Company
gy Inc.
panies Not Co
S Nuclear Regulato
al Markets

Table 9.

Company, Inc.
p.
ered
ry Commission, as
Inc., Mem
Nuclear
Ticker
AE
AE
DTE
D
DUK
ET
EX
F
GX
NEE
PPL
PNW
--
S
XEL
--
of as of Mar 31, 20
Nuclear Out
er NYSE/
utage Da
nits To
1
2 1
1
7 2
7 2
11 10
22 16
4
1 7
8 14
2
3 2
5 20
6 5
3 4
21 39
104 1,28
13; KeyBanc Capit
1Q12
ge Days By C
FINRA/SI
s by Co
al Units
1.0 1
.6 2
7.3 1
.1 7
.2 12
.3 11
.7 22
7.4 4
.5 1
.0 8
.7 2
1.5 3
.0 0
1.1 6
.5 3
.5 21
0.4 104
al Markets estimat
1
ompany
C
mpany
Total
1.7
8.3
51.3
10.6
189.6
178.3
127.6
23.5
56.0
175.8
19.1
5.1
0.0
90.4
64.0
531.4
1,532.7
es
1Q13
Units To
(
4
(
5 1
5 (
(
(
(5) (2
(5) 1
0 2
Difference
Page 65 of 6

tal
0.7
5.4)
4.0
3.5)
6.4
5.1
7.1)
6.1
9.5)
7.8
5.4
6.4)
2.0)
9.2
0.6
0.9
52.3

June
STA

Thirt
effici
facto
capa
vs. g
targe

In Ta
Sout
man
capa
KeyB
Equit
2013
E RENEW
y-six states an
ncy and ren
s, including: t
ity installed v
ins from effici
s being set ar
ble 10, every
Dakota, Uta
atory target.
ity by the 201
anc Capit
Researc
BLE PORTF
d the District
wable resour
he ultimate a
. generation
ency; which r
voluntary or
tate with a da
h, Vermont a
urrently, Lou
-2013 time fr
al Markets

OLIO STAN
of Columbia h
es. The resu
ount or level
utput); timelin
newable reso
andatory.
te listed has a
d Virginia) h
isiana has a
me.
Inc., Mem
ARDS
ave adopted s
t is a patch
to be targete
e for impleme
rces are to b
opted an RP
ve set volun
ilot renewabl
ber NYSE/
tate RPSs to f
ork of differe
; how to me
ntation; balan
included in t
into law. Six
ary renewabl
program tar
FINRA/SI
oster electricit
t state stand
sure the initi
e between re
e RPS; and e
states (Indian
portfolio go
geting 350 M
PC

investments
rds on seve
tive (percent
ewables usa
ven whether t
, North Dako
ls instead of
of renewa
in
al
of
e
e
a,
a
le
Page 66 of 6

June

KeyB
Equit
2013
* Denotes states tSources: http://w Company
State
original RPS law
ado tion date
A
Arizona2/26/06 15
California
9/12/02 33
Colorado11/2/04 30
Connecticut
7/1/98 27
District of Columbia
1/19/05 11
Delaware
7/21/05 25
Florida
Hawaii6/2/04 25
Iowa
10/21/83
10
M
Illinois
8/28/07 25
Indiana*
5/1/11 10
Kansas
5/22/09 20
Maine9/28/99 10ne
Maryland5/26/04 20
Massachusetts7/2/08 15
Michigan10/6/08 10
Minnesota
2/22/07 25
Missouri11/4/08 15
Montana
4/28/05 15
anc Capit
Researc
hat have set volunw.eere.energy.godata, KeyBanc Ca
mt Year Comments
%2025
2.5% of total electr
2025. 5% of the rea 30% "distributedfrom facilities insta
2020
Renewable energy geothermal, small Governor signed a
2010 to 33% by 20approved bill X1-2 relying on Californi
2020
On 3/22/10 HB 10
investor-owned util12% of their retail wind, geothermal, 2015, and 30% by
electric technolo i
2020
On 6/4/07 HB 743(solar, wind, sustaifrom "Class I" or "
and 4% from "Clas
2022
Two-tiered system:treatment gas, geo"Tier 2" includes h
district’s renewabl18-0223 amended used to meet more solid waste will no
2025
18% from renewab
renewable fuels, 3digestion, and land
n Executive Orderules. On Jan. 30,
the state Legislatu
Other target dates: Le islature did not
2020
10% of net electric(wind, solar, oceanincreased to 25%
efficiency savings.
5
Not an official RPS
investor-owned utilcontract for 105 Mhydro, municipal s
of wind capacity b
2025
10% by 2015 and
come from wind pEligible renewableimplement energy
2015.
2025
SB 251 sets a volu10% clean energy utilities) must appl
eligible for incentiv
2019 - 2024: at leaclean energy.
2020
Generate or purch
2020 and beyond. sources include wiwaste, untreated
MW or less.
2017
Original standard additional 10% by wind, geothermal, service after 9/1/0
2022
On 4/24/08 the RPfrom renewable so7.5% from other re
gas, geothermal, o
hydro) by 2022.
2020
New law updates generation by 202Renewables includbiomass, marine,
2015
Qualifying sources
and cogeneration. be used to cover s
2025
Xcel Energy (gene
from renewable so
include solar, windresources, and bio
2021 Voters passed prostandard. Investor-
energy credits (2%
2015
Utilities can meet t
electricity bundled
limit the additional wind, solar, geothewastewater-treatm
al Markets

Table 10.
tary goals for adop/states/maps/reneital Markets Inc. r
icity sold from renewable en
ewables to come from solar energy technology requireled before 1/1/1997 are not
resources include biomass, ydropower, and ocean-gen executive order increasing
20. On 3/29/11, the Californistablishing the 33% by 202 Air Resources Board regul
1 increased the RPS standa
ities serving 40,000 or more lectric sales from eligible reiomass, and small hydroele2020. 3% of these amounts
s. RECs ma be used to sat
increased the RPS standarable biomass, ocean-generlass II" (trash-to-energy, hy
III" (distributed heat, conse
"Tier 1" includes solar, windthermal, ocean-generating, dropower and municipal soli
energy to come from solar the RPS so that municipal sthan 20% of a Tier 2 requireonger be eligible to generat
le resources by 2019 (wind,
MW hydroelectric facilities, fill gas). 3.5% of state electri
from July 13, 2007 directed 009 the Florida Public Servi
e requiring 20% generation
7% by 2013, 12% by 2016 act on or ratif the le islatio
ty sales to come from renew thermal, wave, and biomasy 2020 and 40% by 2030. 3
, but 1983 Alternative Energ
ities (Mid-American and Inte of renewable power (photlid waste, and anaerobic dig
2010.
5% by 2025. 75% of the ele
wer generation, 6% from ne include solar, biomass, andfficiency standard to reduce
ntary Clean Energy Portfolio y 2025, based on 2010 lev to the Indiana Utility Regula
s in order to pay for project
st 7% average; 2025 - 2025:
se renewable energy of 10
enerated energy counts as d, solar thermal and photovood, fuel cells, existing hydr
f 30% by the year 2000. RP017 for new renewable souydro, biomass, or municipal .
was accelerated to 20% of rces by 2022. At least 2% ewable sources (wind, bio
ean-generated, fuel cells fr
revious RPS of 4% in 2009 t with 1% increase each sube solar, wind, ocean, fuel celnd geothermal.
include wind, solar, hydropo
dvanced fossil fuel technolme of a utility's obligation.
ates about half of the state’
rces by 2020. "Eligible Ren
small (<100MW) hydroelecass.
osition C for state-wide RPowned utilities qualify with th
from solar sources). 2% by
e standard by entering into
ith renewable energy credit
ost utilities must pay for renrmal, existing hydro, landfill nt gas, nontoxic biomass, a
Inc., Mem
State Ren
ting renewable enwable_portfolio_stsearch
ergy sources by 2010 and 15
power in 2007, and will rament by 2011. Renewable enligible.
solar thermal, photovoltaics, rated power. On 9/15/09 the the original requirement of 2
Assembly passed Senate- standard into law rather thtions.
rd to 30% by 2020. Require
ustomers to generate or puewable energy resources (stric) by 2010, increasing to ust come from distributabl
isf standard
to 20% renewables from "ted, landfill gas, 5MW hydrro facilities, and other bioma
rvation, waste recovery prog
, biomass, landfill gas, wastnd fuel cells from renewable waste. Additional 0.386%
nergy by 2022. On 7/2/10 Dlid waste incineration may nment. Beginning 2013 muni Tier 2 RECs.
cean-generated, fuel cells f
ustainable biomass, anaeroity supply from solar PV by
the state commission to drace Commission proposed a
rom renewable resources b
nd 18% by 2019. The Florid in 2009 or 2010.
able sources by 2010, 15% ). On June 25, 2009, RPS w0% by 2030 to come from e
Production state law mand
state Power/Light) to own or voltaics, landfill gas, wind, bestion). Voluntary goal of 1,
tricity used to meet the RP
solar photovoltaic by 6/1/2 existing hydropower. Utilitie electric usage by 2% of de
Standard (CPS) program gols. Qualifying electric utilitiestory Commission (IURC) to
. 2013 - 2018: at least 4% a
at least 10% average qualif
by 2011, 15% by 2016 and
1.1 MW for each MW. Eligibltaic, dedicated agricultural power and new hydropower
was increased in June 200ces (fuel cells, tidal power, ssolid waste recycling) place
state’s electricity supply muust come from solar sourceass, anaerobic digestion, la
m renewable fuels, and sm
15% new renewable electriequent year, with no set exls from renewable fuels, lan
er, landfill gas, waste com
gies and efficiency measur
electricity) required to prod
wable Energy Technologies
ric, hydrogen from renewabl
repealing current voluntary ir own generation or renew
2011; 5% by 2014; 10% by
ong-term purchase contract
s. The law includes cost cap
ewable energy. Resources ir farm-based methane gas, d fuel cells from renewable
ber NYSE/
wable P
ergy standards insttes.cfm; http://ww
State
original RPS la
ado tion date
% by
up to rgy Nevada3/15/07
wind,
% by
n
New Hampshire
5/11/07
large
chase lar, 0% by solar-
New Jersey2/9/99
lass I" ), 3% ss),
ams).
New Mexico
3/5/07
water-fuels. f the
Law t be ipal
New York
9/22/04
om
bic 025.
North Carolina
8/20/07
t RPS PS to
2020.
a
North Dakota*3/21/07
y 2015 s ergy Ohio5/1/08
tes two
omass, 00 MW
Oregon
6/6/07
must
15. to and by
Pennsylvania
12/16/04
l of (public e
erage;
ing
Rhode Island
6/29/04
20% by
le r plant of 10
South Dakota*
2/21/08
an lar, into Texas6/18/1999
t come and dfill
ll
Utah*3/18/08
city iration. fill gas, Vermont*6/14/05
ustion
s may Virginia*4/11/07
ce 30%

Washington
11/7/06
ble
018.
West Virginia6/17/09
for
that
clude
uels.
Wisconsin
10/27/99
FINRA/SI
rtfolio Sta
ead of mandatory w.pewclimate.org/
w
Amt Year Comme
25% 2025
SB 395 ofrom solaenergy ef
solar, hy
from sola
25% 2025 25% of stgeothermsmall hyd
22.5% 2021
B 3520
generatorequiremwind, waanaerobi
facilit a
20% 2020
20% of ainclude squalifying
encourag
29% 2015
On 1/8/1from exisTier", roubiofuel, f
Sited Tie
resource
12.5% 2021
By 2021,
efficiency municipal
10% 2015 Voluntarrenewabl
25% 2025
12.5% elhydropoOther 12.
fuel cells, buy, sell, from ene1% in 20
25% 2025
25% of u
wind, sol
facilities. photovolt
18% 2020
Two-tieresmall hyd
side man
must be
16% 2019
3% of ret1% a yeamust be f
wind, oce
biomass, schedule
10% 2015 Voluntar
5,880 MW 2015
On 8/1/0built in stMW in reresource
20% 2025 Voluntareffective
10% 2013
Voluntarwill beco
hydropofacilities of state temphasi
PSB to c
report du
15% 2025
Voluntar
sales (exwind, gereceive a Investor-
percenta
15% 2020
ll utilitie
energy u
geothermfacilities,
25% 2025
10% by 2Eligible astorage, methane,
synthetic and recybiomass,
10% 2015
On 3/17/and wav
technolo
outside o
PC
ndards
targets. hat_s_being_do
nts
n 6/8/09 increased RPS to: energy. Utilities can also eiciency measures. Resourc
ro, and wind. On June 8, 20
by 2016).
ate's electricity from renewaal, hydrogen fuels, methane roelectric sources).
n 1/17/10 required 5,316 M
s by 2025. SB 2036 on 8/19nt calling for 1,000 MW of ce, tidal, geothermal, landfill digestion of food waste and
d h dro ower.
electric utility’s power must lar, wind, hydropower, geot biomass. Performance-bas
e utilities to exceed annual s
NY SPC increased RPS to
ing facilities and 8.3% from hly 93% of incremental renel cells, hydroelectric, solar,
" 7% of incremental renewa
). An additional 1% to come
12.5% of retail sales must c
for investor-owned utilities. utilities.
RPS passed by legislature s by 2015.
ctricity sold in the state to cer, geothermal, or biomass), 5% may come from alternati
energy-efficiency, and cleaand trade renewable energy gy efficiency savings. Electri9, and an additional 0.75%
ility electric load from new re
r, wave, geothermal, bioma
n 6/25/09 HB 3039 requireic.
resources to meet RPS: 8ropower, geothermal, and bi
gement, large hydropower,
olar-provided generation (p
il electricity sales must comr through 2020. Existing renom new renewable producti
an-generated, the heat of th
and fuel cells using renewaafter 2013.
RPS of 10% retail electricity
SB 20 increased RPS to 5,te (about 5% of the state's ewable generation capacity .
RPS goal of 20% of adjusteenewable energy.
goal of 10% of 2005 total ele mandatory in 2013. Rene
er, landfill methane gas, anxcluding municipal solid wa comply with RPS. On 3/20/ing use of Vermont's farms
nsidering changing state's
10/1/11.
RPS goal (updated 4/2/10)
luding average nuclear powthermal, hydropower, wave, double credit toward RPS gwned utilities are incentivize
e of the power sold in VA fr
in WA serving more than 2
ing renewable sources by 2
al, landfill gas, wave, ocean, iodiesel fuel not from defor
015 and 15% by 2020 from ternatives include advanced ltra/supercritical and pressunatural gas, coal gasificatio
gas, IGCC, waste coal, tire-led energy. Eligible renewabiofuels, and fuel cells.
6 RPS was increased to 10 action, fuel cells using rene
y, and hydropower less than
Wisconsin is eligible.
ne/in_the_states/rp
20% by 2015, at least 5% murn credit for up to 25% of ths include biomass, fuel cells
9 RPS was updated to 25%
le resources by 2025 (inclugas, ocean-generated, biom
to be generated from in-st
10 is nation's first carve-out pacity, details TBD. Resourethane gas, fuel cells from sewage sludge at a biomas
come from renewable sourcermal, fuel cells from renewd financial or other incentive
andards.
9% of renewables by 2015.
ew sources categorized intwables generation (biogas, ocean or tidal power, and wi
les generation (fuel cells, so
through voluntary power sal
me from renewable energy
0% by 2018 for electric coo
f 10% retail electricity sold t
me from renewables (wind, half of which must be genere energy resources (nuclea
carbon capture technology)credits to comply. 22.5% by utilities must reduce peak ach year through 2018.
newable sources by 2025. R
s, new hydro or upgrades to
20 MW by 2020 to come fr
from Tier 1 (wind, solar, comass), 10% from Tier 2 (wa
municipal solid waste, and I
rt of Tier 1) by 2020.
from renewable energy by wables count for only 2% of n. Resources include direct
earth, small hydroelectric f
le fuels. The PUC will revie
sold to come from renewabl
80 MW of new renewable glectricity demand) by 2015. by 2025. 500 MW by 2025 f
retail sales by 2025. Utilitie
ctric sales to be achieved bable resources include win
erobic digesters, and sewagte. Vermont utilities can buil8, new renewable goal of 2nd forests. On 6/4/10 HB 78
PS goals to a full-fledged R
f 15% of 2007 base year uti
r supply) by 2025. Resourcidal, and biomass energy. als. Offshore wind receive a d with increased rate of retu
m eligible renewable energy
,000 people must produce 1
20. Resources include wate
tidal power, gas from sewagsted land and biomass.
lternative or renewable enercoal technology (e.g., carboized fluidized bed technolog or liquefaction facility-prod
erived fuel, pumped storage les are solar, wind, hydropo
by 2015. Qualifying renewable fuels, solar, wind, bio
60 MW. Renewable energy
Page 67 of 6

s.cfm
st be generated RPS through , geothermal,
by 2025 (6%
es wind, solar, ss, and existing
te solar
ffshore wind es include solar, enewable fuels, generating
s. Resources ble fuels, and s are used to
20.7% of target two-tiers. "Main iomass, liquid d). "Customer-
lar, and wind
s.
r energy
eratives and
come from
olar, ted in Ohio. power plants,
Utilities may 2025 to come nergy demand
esources include
existing hydro
m solar
lmine methane, ste coal, demand
CC), and 0.5%
006, increasing RPS, the rest solar radiation,
cilities, eligible
/revise the
s by 2015.
neration to be oal of 10,000 om non-wind
s to pursue cost-
2012, else RPS , solar, large
-treatment generation out % by 2025 1 required the
S standard. PSB
ity electricity
s include solar, ind and solar triple credit. n to procure a
sources.
5% of their
, wind, solar,
e treatment
y sources. capture and es), coal bed ced fuel,
hydroelectric, er, geothermal,
bles include tidal ass, geothermal
generated
8

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g
[BUY]
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KeyBanc Cap
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266
11
al Markets

Markets
nies mentione
or the preparatio
al views about
tly or indirectly
erform the mar
ll diversification
rform in line wit
pected to und
rt is based on
reflect the judg
ell or a solicitati
of any compa
ir families may
ublication of thi
, other than th
this report. T
tivity, the qualit
ch include reve
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eeking or will s
ublished reports
Distribution
tal Markets
Percent
44.93
52.88
2.19
Inc., Mem
Inc. Di
in this report
n of this researc
any and all o
related to the
et over the nex
requirements.
h general mark
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ources consid
ment of the aut
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y followed by t
have positions
s report. In so
research analy
e research anal
of the analyst’
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alysts are prohi
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for company-sp
of Ratings/IB
B Serv./Past 12
Count Perc
52 23.
62 23.
4 36.
ber NYSE/
closur
can be found a
h report certifies
the subject s
pecific recomm
six to 12 mont
t indices over th
arket over the
red to be reliab
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uy any securiti
at analyst, unle
in these securit
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st responsible
research and
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ited from solicit
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Services Fir
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01
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6

Rating
BUY [BUY]
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FINRA/SI
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t https://key2.b
that:(1) all the
curities or iss
endations or vi
s; investors sh
e next six to 12
next six to 12
le but is not re
te of publicatio
s. Our compan
s otherwise dis
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ch investments
r the preparatio
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ing investment
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mwide and by

LD]
]
PC
Certifica
luematrix.com/
views expressed
ers; and (2) n
ws expressed
uld consider ad
months; no buy
months; invest
resented to be
and are subje
y policy prohibit
closed. Our off
principal or ag
may be inconsi
of this report,
n of this report
dations, ratings
s, the Firm’s p
anking busines
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Secto
ENERGY
Count Pe
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tions
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part of the r
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research anal
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43.28 1
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Page 68 of 6
ures.action.
report accurate
search analyst
analyst(s) in th
to their holdin
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out notice. Th
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ll such securiti
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based on vario
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Past 12 Mos.
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