INDUSTRY RISK REPORT UTILITIES AND ENERGY

Thanks to increases in and the volatility surrounding
petroleum an natural gas prices, risk managers working
or energy producers are more likely to be keeping
an eye on counterparties, credit swaps and commodities
traders than the are to be looking over




				

				
				 
				


 their contracts
covering their property risks. Keeping are eye on
regulators and their progress on carbon credit trading
is also going to be a concern.

Company Name         Location              CRO

Constellation    Baltimore, Md.     Brenda Boultwood,
Energy Group                        SVP & CRO

Dominion         Richmond, Va.      Linda Barnett,
Resources Inc.                      Director,
                                    Corporate
                                    Risk Manager

Exelon Corp.     Chicago, Ill.      Robert McDonald,
                                    SVP & CRO

Southern Co.     Atlanta, Ga.       Todd Harris, Chief
                                    Risk Officer

American         Columbus, Ohio     Stephen Haynes,
Electric                            VP & CRO
Power Co.

Edison           Rosemead, Calif.   John Butler,
International                       Corporate Risk
                                    Manager

PG&E Corp.       San Francisco,     Kent Harvey,
                 Calif.             SVP, Chief Risk
                                    and Audit Officer

Public Service   Newark, N.J.       Laurie Brooks,
Enterprise                          VP, Risk
Group Inc.                          Management & CRO

Duke Energy      Charlotte, N.C.    Lynn T. Good,
Corp.                               SVP, Treasurer

Reliant          Houston, Texas     Suzanne Kupiec,
Energy Inc.                         CRO; Bill Oldham,
                                    Director of
                                    Insurance

                                        2007 Total       No. of
Company Name           CFO              Revenue        Employees

Constellation    John R. Collins,     $21.19 billion     10,200
Energy Group     CFO

Dominion         Thomas Chewning,     $15.67 billion     17,000
Resources Inc.   EVP & CFO

Exelon Corp.     Matthew Hilzinger,   $15.65 billion     17,800
                 SVP & CFO

Southern Co.     W. Paul Bowers,      $15.35 billion     26,742
                 EVP & CFO

American         Holy Keller          $13.38 billion     20,861
Electric         Koeppel, EVP
Power Co.        & CFO

Edison           Thomas McDaniel,     $13.28 billion     16,990
International    EVP, Treasurer

PG&E Corp.       G. Robert            $13.23 billion     19,785
                 Powell, VP,
                 CFO, Controller

Public Service   Thomas O'Flynn,      $12.85 billion      8,607
Enterprise       EVP
Group Inc.

Duke Energy      David Hauser,        $12.72 billion     17,800
Corp.            CFO

Reliant          Rick Dobson,         $11.20 billion      3,698
Energy Inc.      EVP & CFO

                     Primary
Company Name          Broker          Captives

Constellation    Aon; Marsh;          No
Energy Group     McGriff, Seibels &
                 Williams; Myers-
                 Reynolds

Dominion         McGriff, Seibels &   No
Resources Inc.   Williams; Marsh;
                 Willis

Exelon Corp.     Aon; Marsh;          No
                 McGritf, Seibels &
                 Williams

Southern Co.     McGriff, Seibels &   No
                 Williams

American         Aon; McGriff,        No
Electric         Seibels & Williams
Power Co.

Edison           Marsh                Edison Insurance
International                         Services (Hawaii)

PG&E Corp.       Withheld             No

Public Service   Marsh                No
Enterprise
Group Inc.

Duke Energy      Beecher Carlson;     Northsouth
Corp.            Marsh                Insurance
                                      Company Ltd.
                                      (Bermuda), Bison
                                      Insurance Co. Ltd.
                                      (Bermuda)

Reliant          John L. Wortham      No
Energy Inc.      & Son, property;
                 Lockton, casualty
                 and financial

Company Name     Risk Exposure:

Constellation    Because it buys and sells electricity on
Energy Group     the wholesale markets, Constellation is
                 exposed to risk due to price volatility.
                 In addition, operators of power generation
                 facilities exposes the company to start-up
                 risks, breakdowns or failures of equipment
                 and environmental compliance concerns.
                 Equipment breakdowns can lead to liability
                 for liquidated damages.

Dominion         The company's exposure to credit risk is
Resources Inc.   concentrated primarily within its core
                 energy marketing activities, as the company
                 transacts with a smaller, less diverse
                 group of counterparties and transactions
                 may involve large notional volumes and
                 potentially volatile commodity prices.

Exelon Corp.     Exelon has price risk from commodity price
                 movements. Commodity price risk is
                 associated with price movements resulting
                 from changes in supply and demand, fuel
                 costs, market liquidity, weather,
                 governmental regulation and environmental
                 policies and other factors.

Southern Co.     A number of Southern Company's
                 subsidiaries have investments in the
                 Gulf Coast. Subsidiaries such as Gulf Power
                 and Alabama Power suffered significant
                 disruption and damage due to Hurricane Ivan
                 in September 2004 and hurricanes Dennis and
                 Katrina in the late summer of 2005.

American         AEP is vulnerable to increases in prices for
Electric         such items as coal, natural gas and emissions
Power Co.        allowances. As a holding company with subsidiaries
                 in numerous states, AEP's financial structure can
                 be impacted by varying regulations from state to
                 state.

Edison           Edison International is exposed to changes in
International    interest rates primarily as a result of
                 its borrowing and investing activities used for
                 liquidity purposes, to fund business operations
                 and to finance capital expenditures.

PG&E Corp.       The utility is exposed to a concentration of
                 credit risk associated with receivables
                 from the sale of natural gas and electricity
                 to residential and small commerical customers
                 in north and central California. PG&E also has
                 a concentration of credit risk associated  with
                 its  wholesale customers and counterparties mainly
                 in the energy industry.

Public Service   The company is subject to liability under
Enterprise       environmental laws for the costs of
Group Inc.       remediating environmental contamination for
                 property now or formerly owned by the company.
                 In addition, as an operator of nuclear power
                 generating facilities, the company could also be
                 held liable for environmental damage to
                 property held by others from hazardous
                 materials the utility may generate.

Duke Energy      As an owner of nuclear facilities Duke Energy
Corp.            is exposed to risks stemming from potential
                 harmful effects on human health and the
                 environment from the operation of nuclear
                 facilities and the storage, handling and
                 disposal of radioactive materials and
                 limitations on the types of insurance
                 commercially available to cover losses that
                 might arise in connection with nuclear
                 operations.

Reliant          The Houston-based electricity generator counts
Energy Inc.      property losses--from hurricanes, for
                 example--and directors' and officers'
                 coverage as its two primary exposures and
                 most expensive risks from an insurance
                 standpoint

Company Name     Risk Strategies:

Constellation    The company manages retail credit risk
Energy Group     through established credit policies,
                 monitoring customer exposures and the
                 use of credit mitigation measures such
                 as letters of credit or prepayment
                 arrangements. Because I has operations
                 in Canada, Constellation manages foreign
                 currency risk using a comprehensive
                 foreign currency hedging program.

Dominion         Energy marketing and price risk management
Resources Inc.   activities include trading of energy-related
                 commodities, marketing of merchant generation
                 output, structural transactions and the use of
                 financial contracts for enterprisewide
                 hedging purposes. Gross credit exposure for
                 each counterparty is calculated as outstanding
                 receivables plus an unrealized on or off-balance
                 sheet exposure, taking into account contractual
                 netting rights.

Exelon Corp.     Exelon's risk management committee approves
                 risk management policies and objectives
                 for risk assessment, control and valuation,
                 counterparty, credit approval, and the
                 monitoring and reporting of risk exposures.
                 The risk management committee is chaired
                 by the chief risk officer and includes
                 the CFO, general counsel, treasurer, vice
                 president of strategy, vice president of
                 audit  services, corporate controller and
                 officers of the various business units.

Southern Co.     To manage the volatility attributable to
                 market risk exposures Southern Company
                 nets the exposures to take advantage
                 of natural offsets and enters into
                 various derivative transactions for the
                 remaining exposures pursuant to the
                 company's policies.

American         The company uses various hedges and other
Electric         trading formulas to manage interest rate
Power Co.        and credit risk. It is a member of the
                 industry's Committee of Chief Risk
                 Officers, which works to develop
                 standard disclosures for risk management
                 activities around risk management
                 contracts.

Edison           The company enters into energy options,
International    tolling arrangements and forward contracts
                 to mitigate its exposure to spot-market
                 prices.

PG&E Corp.       The utility actively manages market risks
                 through risk management programs designed
                 to support business objectives,
                 discourage unauthorized risk taking,
                 reduce commodity cost volatility
                 and manage cash flows. The utility uses
                 derivative instruments only for non-
                 trading purposes (.e. risk mitigation)
                 and not for speculative purposes.

Public Service   PSEG manages credit risk through
Enterprise       policies that evaluate potential
Group Inc.       counterparties' financial condition
                 (including credit rating) collateral
                 requirements under certain circumstances
                 and the use of standardized agreements,
                 which may allow for the netting of
                 positive and negative exposures
                 associated with a single counterparty.

Duke Energy      Duke energy employs established
Corp.            policies and procedures to manage
                 its risk associated with market
                 fluctuations using various
                 commodities and financial instruments,
                 including swaps, futures and options.

Reliant          The company says it employs the
Energy Inc.      tenants of "risk management 101"
                 to identify the exposures, analyze
                 the exposures, examine the various
                 techniques that can address the
                 exposures (be they retentions, transfer
                 and/or avoidance), then selecting the
                 technique, implementing it and
                 monitoring it.

COMPILED BY DAN REYNOLDS FROM THE FOLLOWING SOURCES: HOOVER'S, RISK
AND INSURANCE MANAGEMENT SOCIETY INC. DATABASES; COMPANY FILINGS AND
REPRESENTATIVES.