Fitch EEI Wrap-Up Report: Political & Regulatory Issues Drive Utility Capital Spending

Business Wire, Nov 12, 2007

NEW YORK -- Fitch Ratings, on Nov. 9, 2007, published its wrap-up report for the 42nd Edison Electric Institute (EEI) Financial Conference, focusing on the utility industry's challenge of adapting to changing regulatory and political pressures related to the environment.

The utility industry remains on the verge of a large capital spending program. What has changed since 2006, however, is that increasing capital budgets, driven at least in part by inflationary pressures, focus attention on the execution risks and regulatory hazards of a major capital investment cycle. Moreover, participants at the conference recognize the political opposition toward new build coal due to green house gas emissions and climate change concerns, a marked reversal of the optimism regarding new coal-fired generation a year ago.

Fitch's 19th Annual Global Power Breakfast theme was 'Looking Back to the Future.' The topics covered the similarities and differences of this capital development cycle, noting that potential execution risk, cancellations and inflation, represent key challenges. Fitch also discussed shrinking reserve margins and hurdles to building new generation on a large enough scale to offset declining reserve margins. The slide presentations with text of the speakers' remarks are available on the Fitch website at www.fitchratings.com. The title of the presentation is 'Fitch Ratings 2007 Global Power Breakfast - Edison Electric Institute -- Amended,' dated 9 Nov. 2007.

Key issuer news from EEI, including the Entergy spin-off announcement, is also discussed in the report.

The full report is titled 'Carbon, Capital, Politics and Power: EEI 2007 Wrap-Up Report' and is available on the Fitch Ratings' web site www.fitchratings.com.

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