Capital Expenditures

1
Capital Expenditures

• U.S. Shareholder-Owned Electric Utilities

2
Rapid Capex Growth Since 2004
3
Latest Capex Budgets Show Continued High Spending
in 2009-10
Billions
p projected
2009p and 2010p represent preliminary updates
and are subject to revision. Source SNL
Financial, company reports and EEI Finance Dept.
4
Capex Impacts on Utility Cash Flow
Source SNL Financial and EEI Finance Dept.
5
Higher Debt Costs from Financial Crisis
6
Industry Capital Expenditures

• Industry committed to reliability-- making needed
  investments in generation, transmission, smart
  grid/ distribution the environment
• Financial crisis initially brought sharp
  revisions for 2009
• Multi-year trend of soaring construction/materials
  costs reversed in Q3 2008
• Increased spending expected to continue into the
  future
• Total capex for 2010-2030 1.5 trillion
• Excludes impact from climate legislation

U.S. Shareholder-Owned Electric Utilities
The Brattle Group, preliminary findings from
The Edison Foundation presentation titled
Transforming Americas Power Industry.
Represents the entire Power sector.
7
Commodities Reversalin Second Half of 2008
Sources Bureau of Labor Statistics, NYMEX,
Platts, SNL Financial, World Bank. Prices/indices
averaged over calendar quarters and indexed to
100 at 3Q07.
8
Transmission

• Reliable electric service and regional markets
  depend on strong transmission systems 
• 2000-2007 - Shareholder-owned segment invested
  more than 48.8B (Real 2007)
• 2007 - Shareholder-owned segment invested 7.8B
  in transmission (2.9 over 2006)
• 2008-2010 - Shareholder-owned segment planning to
  invest 30.9B (preliminary)

Planned
Actual
9
Distribution

• Distribution systems deliver power to
  neighborhoods, businesses and consumers 
• 2000-2007 Real dollar annual spending increased
  10 from 15.9B to 17.6B
• Near-term projections
• 20B / year
• Investments replace aging infrastructure and
  modernizing system management and control

10
Generation
(MW)

• EIA forecasting 223 GW of new capacity to meet
  growing demand by 2030
• 505 billion (nominal)
• Shareholder-owned segment added 8,852 MW in 2008
• Shareholder-owned segment announced 13,551 MW of
  new capacity additions in 2008

Actual
Planned
2008 The Brattle Group, preliminary findings
from The Edison Foundation presentation titled
Transforming Americas Power Industry