Black and Veatch Capital Markets Report

8/6/2019 Black and Veatch Capital Markets Report

1/18

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ACIATP

ATPGBKHCPACPN

CVEROCETEFEFTSNI

SUGWMB

July 12, 2011

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

Mergers & AcquisitionsCentral Vermont Public Service is being sought by two major Canadianutilities: Gaz Mtro, which also owns the other investor-owned utility inVermont, made an unsolicited bid for the company. This put on hold anagreement for Fortis Inc. to acquire Central Vermont PS.

Arch Coal and International Coal Group completed their merger, just twoeeks after Alpha Natural Resources closed on its acquisition of Massey

Energy.

Energy Transfer Equity outbid the Williams Cos. for Southern Union Co.

Stocks and CommoditiesThe Rudden Composite Index gained 0.96% for June, with all categoriesshowing gains. Master Limited Partnerships gained 2.8%, the strongestperformance. The Merchant Electric group was the second best, gaining 1.6%.The S&P 500 Index gained 0.46% for June.

The Rudden Index gained 21.5% for the 52 weeks ended June 30, comparedto the gain in the S&P 500 of 28.1%. All categories gained for the 52 weeks;Natural Gas T&D-Diversified had the strongest gain, up 31.2%. RegulatedTransmission & Distribution-Gas and Electric, was up 25.6%.

The Dow Jones Industrial Average ended June at 12,414.34, up 27% or2,640.32 points compared to the end of June 2010. The DJIA lost 1.2% or155.45 points for the month from 12,569.79 at the end of May.

Gold spot month futures prices showed volatility on the New York MercantileExchange, with prices dropping $52.40 over two days, June 23 and 24, butalso showing gains of $8 or $10 on other days. At months end, spot goldsettled at $1,502.30, down by $40.10 per ounce from June 1.

Silver opened June at $37.689/oz. for the spot month contract and ended themonth at $34.812/oz.

Light sweet crude oil ended June at $95.42/bbl. for the spot month futurescontract; the natural gas spot month futures contract was $4.37/mmBtu;Central Appalachian coal was $77.63/ton.

EEddiittoorrss::

Samuel GlasserMaggie Arecco-Stanco

631-348-4090William Kemp,Vice President

Address correspondence [email protected]


2/18

Ruddens Energy Capital Markets ReportPublished by Black & Veatch Management Consulting, Black & Veatch Corporation 2

Values

06/30/11

Monthly

Change

from

06/01/11

Annual

Change

from

06/30/10

52 Week

High

Change

from 52

Week High

All-Time

High Since

01/03/07

Change

from All-

Time High

S&P 1,320.64 0.46% 28.1% 1,363.61 (3.2%) 1,565.15 (15.6%)

Composite Index 97.66 0.96% 21.5% 98.34 (0.7%) 115.44 (15.4%)

Master Limited Partnerships (MLPs) 130.46 2.76% 17.8% 137.06 (4.8%) 137.06 (4.8%)

Natural Gas T&D (Diversified) 113.05 1.07% 31.2% 114.42 (1.2%) 124.46 (9.2%)Regulated T&D (Gas & Electric) 112.53 0.74% 25.6% 114.94 (2.1%) 114.94 (2.1%)

Electric (Merchant) 74.81 1.61% 7.8% 76.61 (2.3%) 158.58 (52.8%)

Regulated Electric (Integrated) 95.94 0.03% 16.6% 98.29 (2.4%) 106.95 (10.3%)

Electric (Diversified) 84.64 0.81% 13.2% 85.79 (1.3%) 126.65 (33.2%)

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FirstEnergy Corp. and subsidiaries entered into two new five-year syndicated revolving credit facilities withaggregate commitments of $4.5 billion, the company reported in an 8K Report filed with the U.S. Securities andExchange Commission on June 22. The credit facility is dated June 17.

An aggregate amount of $2 billion is available, with separate borrowing limits, to each corporate unit FirstEnergy,Cleveland Electric Illuminating Co., Metropolitan Edison Co., Ohio Edison Co., Pennsylvania Power Co., ToledoEdison Co. American Transmission Systems Inc., Jersey Central Power & Light Co., Monongahela Power Co.,Pennsylvania Electric Co., Potomac Edison Co., and West Penn Power. The Royal Bank of Scotland plc, is theadministrative agent for the group of 27 banks.

An additional $2.5 billion is available to FirstEnergy Solutions Corp. and Allegheny Energy Supply Co. LLC withJPMorgan Chase Bank, acting as administrative agent.

Commitments under each of the new facilities will be available until June 17, 2016, unless the lenders agree to up totwo additional one-year extensions.

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Hydro-Qubec negotiated a new bond issue of US$1 billion, Series JO, maturing on June 30, 2016.

The debentures are guaranteed by Qubec and will bear interest at 2%. The debentures are dated June 30, 2011, thecompany said on June 23.

The debentures will be distributed simultaneously on the American, Canadian, European and Asian markets by aninternational group of underwriters. It is Hydro-Qubecs second U.S. dollar global issue and its first issue in U.Scurrency since 2001.

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Central Vermont Public Service Corp. (NYSE: CV) on June 15 issued $40 million in aggregate principal amount ofits first mortgage 5.89% bonds, Series WW, due June 15, 2041.

The bonds have been issued as contemplated under the bond purchase agreement among the company andMetropolitan Life Insurance Co. and its affiliates dated as of February 4, 2011.


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Ruddens Energy Capital Markets ReportPublished by: Black & Veatch Management Consulting, Black & Veatch Corporation 3

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NiSource Inc. (NYSE: NI) said on June 10 that its finance subsidiary, NiSource Finance Corp., has completed thesale in an underwritten public offering of $400 million aggregate principal amount of 5.95% notes, due 2041.NiSource says it will fully and unconditionally guarantee NiSource Finance's obligations.

NiSource Finance intends to use the net proceeds from the sale of the notes to repay short-term bank borrowings

under its revolving credit facility.

CCPPNNCCaallppiinnee,, GGEE CCoommpplleettee $$884444..55 MMiilllliioonn PPoowweerr PPllaanntt FFiinnaanncciinnggFFoorr NNeewwGGeenneerraattiioonn iinn SSaann FFrraanncciissccoo BBaayy AArreeaaCalpine Corp. (NYSE:CPN) and General Electric Co.s (NYSE: GE) GE Energy Financial Services unit obtainedan $844.5 million credit facility to finance construction of the 619 megawatt, combined cycle Russell City EnergyCenter in Hayward, Calif., the companies said June 27. The power plant, now under construction, was the nation'sfirst to receive a federal air permit that includes a voluntary limit on greenhouse gas emissions, the companies said.

The project finance facility includes a construction loan that will convert to a 10-year term loan when commercialoperations begin, expected in mid-2013. The construction loan and term loan facility will initially be priced at

LIBOR plus 2.25%. The loan facility is non-recourse to Calpine and GE Energy Financial Services. It was jointlyarranged by MUFG Power & Utilities Group; ING Capital LLC; Lloyds Bank Corporate Markets; BMO CapitalMarkets and CoBank, ACB, Calpine said.

Pacific Gas and Electric has agreed to purchase the full output of electricity from Russell City upon completion andwill supply natural gas fuel to the plant under a 10-year power purchase agreement approved by the CaliforniaPublic Utilities Commission in September 2010.

The facility is expected to play a critical role in meeting the Bay Area's power needs as older, emissions-intensiveplants shut down and in supporting the integration of renewable energy projects into California's power grid.

A Calpine affiliate owns 75% of Russell City and a GE Energy Financial Services affiliate owns 25%.

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Calpine Corp. (NYSE: CPN) announced on June 17 that it closed on a $360 million first lien senior secured termloan. The loan amortizes at a rate of 1% per year and bears interest at LIBOR plus 3.25% per annum, subject to aLIBOR floor of 1.25%, and matures in 2018.

Calpine utilized the proceeds of the term loan to retire credit agreements totaling $340.4 million belonging to itssubsidiaries Deer Park Energy Center, LLC, and Metcalf Energy Center, LLC.

The refinanced project debt pertains to two of Calpines natural gas-fired, combined cycle power plants. The DeerPark Energy Center in Deer Park, Texas, commenced commercial operations in June 2003, has 1,001 megawatts ofelectricity capacity and supplies steam to Shell Chemical L.P. The Metcalf Energy Center in San Jose, Calif., begancommercial operations in June 2005 and can deliver up to 605 megawatts of energy.

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Black Hills Corp. (NYSE: BKH), on June 24 announced the closing of a $150 million, one-year, unsecured, single-draw, term loan with CoBank, Scotia Bank and U.S. Bank. The cost of borrowing under the loan is based on aspread of 125 basis points over LIBOR, Black Hills said.

This loan captures the benefits of low short-term interest rates now extant in the marketplace and reduces overallshort-term borrowing costs, Tony Cleberg, Black Hills executive vice president and chief financial officer said.


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Black Hills intends to use the term loan proceeds to reduce borrowings under its revolving credit facility.

Black Hills is based in Rapid City, S.D. It serves 762,000 natural gas and electric utility customers in Colorado, Iowa,Kansas, Montana, Nebraska, South Dakota and Wyoming. The companys non-regulated businesses generatewholesale electricity, produce natural gas, oil and coal, and market energy.

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ATP Oil & Gas Corp. (NASDAQ: ATPG) of Houston announced on June 20 that it has increased and closed its

previously announced public offering of Series B 8.0% convertible perpetual preferred stock.

Prior to this placement closing and pursuant to the underwriting agreement, the underwriters exercised their optionto purchase 225,000 additional shares of convertible perpetual preferred stock to cover over-allotments. Theexercise of the over-allotment expanded the transaction from 1.5 million shares to 1.725 million shares.

ATP Oil & Gas is engaged in the development and production of oil and natural gas in the offshore Gulf ofMexico, Mediterranean Sea and the North Sea.

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Eagle Rock Energy Partners, L.P. (NASDAQ: EROC) of Houston entered into a five-year senior secured credit

facility with a syndicate of banks; the initial commitments totaled $675 million, with the ability to increasecommitments up to $1.2 billion. The facility, which matures in June 2016, replaces Eagle Rock's former seniorsecured credit facility, which was scheduled to mature in December 2012.

The syndicate is led by Wells Fargo, N.A. as administrative agent, Bank of America, N.A. and Royal Bank ofScotland plc as co-syndication agents, and BNP Paribas as documentation agent. The company announced the newcredit facility on June 22.

In conjunction with the credit facility refinancing, Eagle Rock restructured certain commodity hedges to remove ascounterparties two institutions not continuing as lenders under the credit facility. It also restructured certain interestrate hedges to rebalance its fixed versus floating interest rate exposure following the issuance of the fixed-rate seniornotes in May.

The partnership is engaged in gathering and transporting natural gas, fractionating and transporting natural gasliquids; and marketing natural gas, condensate and natural gas liquids; and oil and gas exploration and production.

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At the end of May, Central Vermont Public Service (NYSE: CV), the largest utility in the state, and Fortis Inc.(TSX: FTS), the largest investor-owned utility in Canada, struck an agreement that would have Fortis acquire theU.S. utility for $35.10 per share. The deal included Fortis taking on Central Vermonts $230 million in debt.

Then, on June 23, Gaz Mtro Limited Partnership, the main gas utility in Quebec, made an unsolicited proposal to

acquire all of Central Vermonts outstanding common shares for $35.25 per share in cash. Gaz Mtro already ownsthe other investor owned utility in the state, Green Mountain Power Corp., having made that acquisition in 2007through its subsidiary, Northern New England Energy Corp. It is through the U.S. subsidiary that Gaz Mtro alsomade its solicitation for Central Vermont PS.

The Central Vermont PS board of directors said on June 27 that it had authorized discussions with Gaz Mtroregarding the proposal. Central Vermont PS said in a press release that its board had determined that the GazMtro proposal is reasonably likely to lead to a superior proposal. The transaction would create the largestelectricity distributor in Vermont serving nearly 250,000 customers, the companies said.


5/18


Central Vermont said if it terminates the agreement with Fortis, it would be required to pay Fortis a total ofapproximately $19.5 million, including expenses.

Fortis is the largest investor-owned distribution utility in Canada, serving more than 2 million gas and electricitycustomers. Its regulated holdings include electric utilities in five Canadian provinces and two Caribbean countriesand a natural gas utility in British Columbia. Fortis owns non-regulated hydroelectric generation assets acrossCanada and in Belize and upper New York State. It also owns hotels and commercial real estate in Canada. GazMtro is Quebec's leading regulated natural gas distributor with 182,000 customers in Quebec and 138,000customers in Vermont.

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Arch Coal, Inc. (NYSE: ACI), St. Louis, completed its acquisition of International Coal Group, Inc. (NYSE: ICO)on June 15, the company announced, with ICG becoming a subsidiary of Arch. Prior to the merger, Arch acquiredapproximately 92% of ICG's outstanding shares of common stock in connection with its previously disclosedtender offer. The aggregate value of the transaction totaled $3.4 billion.

It was the second major coal acquisition during June. Alpha Natural Resources completed its acquisition of Masseyon June 1.

The acquisition extends Arch's reach into every major U.S. coal supply basin, said Steven F. Leer, Arch chairman

and chief executive officer.With expected pro forma metallurgical sales of 11 million tons in 2011, Arch becomes the second largest U.S.metallurgical coal producer and a top 10 global met coal supplier.

The acquisition also adds nearly 13 million tons of low-cost Appalachian thermal production to Arch's domesticthermal coal portfolio, solidifying the company's No. 2 position among U.S.-based coal mining companies. Thecompany has dedicated throughput capacity, logistics capabilities and strategic relationships that can be used toexpand export shipments via the U.S. East Coast, West Coast and Gulf of Mexico to further penetrate globalgrowth markets.

Upon integration, Arch will operate 24 mining complexes across five U.S. coal supply basins.

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Energy Transfer Equity, LP (NYSE:ETE) saw the Williams Cos $39 per share offer for Southern Union Co. andthen raised it to $40, apparently winning the short-lived bidding war for the natural gas pipeline operator.

Energy Transfer and Southern Union announced on July 5 that they entered into an amended and restated mergeragreement under which ETE will acquire SUG for $8.9 billion, including $5.1 billion in cash and ETE commonunits.

Under the terms of the revised agreement, approved by both boards, SUG shareholders can elect to exchange theircommon shares for $40 in cash or 0.903 ETE common units. The maximum cash component is 60% of theaggregate consideration and the common unit component can fluctuate between 40% and 50%. Elections in excessof either the cash or common unit limits will be subject to proration.

The revised purchase price represents a significant increase in value being paid to SUG shareholders and more thana 42% premium to the closing price of SUG common stock on June 15, 2011, the last trading day prior to theannouncement of the original merger agreement.

Energy Transfer made a bid to acquire Southern Union for the equivalent of $33 per share, the companiesannounced on June 16, but the Williams Cos. (NYSE: WMB) jumped in a week later with a proposal to acquireSouthern Union for $39 per share in cash.


6/18


The Southern Union board had originally entered into a definitive merger agreement with Energy Transfer Equity,but it was announced on June 28 that the special committee of the board authorized Southern Union to enter intodiscussions with Williams. The Southern Union board has now decided to go with Energy Transfers higher offer.

Southern Union, of Houston, is a diversified natural gas company, engaged primarily in the transportation, storage,gathering, processing and distribution of natural gas. The company owns and operates one of the nations largestnatural gas pipeline systems with more than 20,000 miles of gathering and transportation pipelines and one ofNorth Americas largest liquefied natural gas import terminals, along with serving more than half a million naturalgas end-use customers in Missouri and Massachusetts.

Williams, of Tulsa, Okla., is an integrated natural gas company focused on exploration and production, midstreamgathering and processing, and interstate natural gas transportation primarily in the Rocky Mountains, Gulf Coast,Pacific Northwest, Eastern Seaboard and the Marcellus Shale in Pennsylvania. Most of the company's interstate gaspipeline and midstream assets are held through its 75% ownership interest (including the general-partner interest) inWilliams Partners L.P. (NYSE: WPZ), a leading diversified master limited partnership.

Energy Transfer Equity is a publicly traded partnership which owns the general partner and 100% of the incentivedistribution rights of Energy Transfer partners and Regency Energy Partners.

Energy Transfer Partners, L.P.(NYSE: ETP) is a publicly traded partnership owning and operating a diversifiedportfolio of energy assets including more than 17,500 miles of gathering and transportation pipelines, treating andprocessing assets, and three storage facilities located in Texas. ETP also holds a 70 percent interest in Lone StarNGL LLC, a joint venture that owns and operates NGL storage, fractionation and transportation assets in Texas,Louisiana and Mississippi. ETP is also one of the three largest retail marketers of propane in the United States,serving more than 1million customers across the country.

Regency Energy Partners LP (NASDAQ: RGNC) is a midstream energy partnership engaged in the gathering,contract compression, processing, marketing and transporting of natural gas and natural gas liquids; it also owns theremaining 30% interest in Lone Star.

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Atlantic Power Corp. (TSX: ATP) (NYSE: AT) of Boston and Capital Power Income L.P. (TSX: CPA.UN)

announced on June 20 that they entered into an arrangement agreement under which Atlantic Power will acquire allof the outstanding limited partnership units of Capital Power for C$19.40 per limited partnership unit, payable incash or shares of Atlantic Power.

The agreed price of C$19.40 represents a 4.1% premium to the Capital Power closing price of C$18.63 on June 17,and a 6.8% premium to the partnership's volume-weighted average trading price for the 30 days leading up toOctober 5, 2010, the day on which Capital Power announced it was undertaking a strategic review process, thecompany said.

Atlantic Power owns and operates a diverse fleet of power generation and infrastructure assets in the United Statesselling electricity to utilities and other large commercial customers under long-term power purchase agreementswhich seek to minimize exposure to changes in commodity prices.

Capital Powers portfolio includes 19 wholly-owned power generation assets located in Canada and the UnitedStates and a 50.15% interest in a power generation asset in Washington State. The companys assets have a total netgenerating capacity of 1,400 MW and more than 4 million pounds per hour of thermal energy.

The merger is expected to be completed in the fourth quarter of 2011, the companies said.

As a result of the transaction, Atlantic Power will emerge as a publicly traded, power generation and infrastructurecompany with a diversified portfolio of assets in the United States and Canada. The merger will increase the netgenerating capacity of the companys projects to approximately 2,116 MW from 871 MW. The combined portfolioof assets will consist of interests in 30 operational power generation projects across 11 states and two provinces, a


7/18


53-MW biomass project under construction in Georgia, and an 84-mile, 500-kilovolt electric transmission line inCalifornia.

Atlantic Power says it has obtained committed debt financing sufficient to enable it to pay the cash portion of themerger consideration, but plans to conduct public and/or private offerings of approximately C$423 million of debtand approximately C$200 million of equity prior to closing to fund the cash portion of the purchase price and torefinance certain existing short-term debt of CPILP.

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Crude Oil, Natural Gas, Coal Spot Month Futures PricesDollars per Million Btus

Source: New York Mercantile Exchange and Black & Veatch

WTI Crude Oil

Natural Gas, Henry Hub

CAPP Coal

$3.23($77.63/ton)

$4.37

$16.37($95.42/barrel)

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

$143.25/ton

Peak gas Jul 3,'08, $13.58

Peak oil, Jul 14,' 08, $24.90 mmBtu, $145.18/bbl June 30,2011

Coal, 74% ofgas, Btu basis

At Jul '08peaks,Gas:Oil

approx50%

Dec 24, 08Gas:Oil =97.5%

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

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June opened with spot month light sweet crude oil futures priced at $100 a barrel on the New York Mercantile

Exchange, and drifting down into the mid-$90s. On June 23, prices fell by more than $4 per barrel in response tothe unexpected announcement by the U.S. Department of Energy and International Energy Agency of the releaseof 60 million barrels from strategic inventories. The agencies said it was to make up for the loss of 1.5 millionbarrels per day of Libyan crude oil exports as the summer driving season was getting underway.

The decision to release the oil was coordinated on several levels, including the Saudis, particularly after the June 8decision by the Organization of Petroleum Exporting Countries not to increase production, which the Saudiswanted, said Michael Korn, an energy options trader in Princeton, NJ.

Crude oil futures prices began recovering within a couple of days of the DOE-IEA announcement, and by July 7were back above $98 per barrel.


8/18


Prices lost ground again by the end of the first full week of July on the release of an absolutely dismal U.S. jobsreport. The U.S. Bureau of Labor Statistics reported that nationwide only 18,000 new jobs were created during themonth of June, putting the unemployment rate at 9.2%. The April and May statistics were revised downward at thesame time.

The SPR (Strategic Petroleum Reserve) release was traded pretty much like any other market news in the futuresmarket, Korn said. Prices fell, found support, and retreated. Since that time the market has been more focused ona tightening supply of North Sea Brent crude, and now the jobs report, he said.

June ended with crude oil futures at $95.42 per barrel (the equivalent of $16.37 per million British thermal units ormmBtu), natural gas at $4.374 per mmBtu, and central Appalachian coal at $77.63 per ton, or $3.23 per mmBtu.

The energy futures are priced at the delivery points specified by the futures contracts: Cushing, Okla., for light sweetcrude oil; the Henry Hub at Erath, La., for natural gas; and barge loading points along a section of the Big SandyRiver for Central Appalachian coal.


9/18


SSttoocckk PPeerrffoorrmmaannccee

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Jun10 Aug10 Sep10 Nov10 Dec10 Feb11 Mar11 May11 Jun11

S&P 500 CMRINDEX

01Jun11:96.74 52WkHigh:98.34 30

Jun11:97.66 52WkLow: 79.14Change:

0.96%

Composite Index

DailyValues30Jun10to30Jun11

(03Jan07=100)

CompositeIndex:Consistsof100energycompanies,whicharefurtherorganizedintosixsubcategoriesasshowninthefollowinggraphs.


10/18


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

Index S&P 500

01Jun11:95.91 52WkHigh:98.29

6/31/2011:95.94 52WkLow: 80.17

Change:0.03%

RegulatedElectric Integrated

DailyValues30Jun10to6/31/2011

(03Jan07=100)

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

ALLETEInc. ALE NorthWesternCorp. NWEAlliantEnergy LNT NVEnergy NVEAmerenCorp. AEE PG&ECorp. PCGAmericanElectricPowerCo. AEP PinnacleWestCapitalCorp. PNWAvistaCorp. AVA PNMResourcesInc. PNMCentralVermontPublicService CV SCANACorp. SCGClecoCorp. CNL SouthernCo. SOCMSEnergyCorp. CMS TECOEnergyInc. TEDPLInc. DPL UILHoldingsCorp. UILDTEEnergyCo. DTE UniSourceEnergyCorp. UNSElPasoElectricCo. EE VectrenCorp. VVCEmpireDistrictElectricCo. EDE WestarEnergyInc. WRGreatPlainsEnergy GXP WisconsinEnergyCorp. WECIDACORPInc. IDA XcelEnergyInc. XELMGEEnergyInc MGEE


11/18


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Index S&P 500

01Jun11:73.63 52WkHigh:76.61

6/31/2011:74.81 52WkLow: 62.51

Change:1.61%

Electric Diversified


(03Jan07=100)

DiversifiedElectric:Companiesthatareinvolvedinthegeneration,transmissionanddistributionofelectricity;morethan20%oftotalassetsareunregulated.

AESCorp. AES FirstEnergyCorp. FEAlleghenyEnergyInc. AYE HawaiianElectricIndustries HEBlackHillsCorp BKH IntegrysEnergyGroupInc. TEGConstellationEnergyGroupInc CEG NextEraEnergyInc. NEEDominionResourcesInc. D OGEEnergyCorp. OGEDukeEnergyCorp DUK OtterTailCorp. OTTREdisonInternational EIX PPLCorp. PPLEntergyCorp. ETR PublicSvcEnterpriseGroup PEGExelonCorp. EXC SempraEnergy SRE


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Index S&P 500

01Jun11:73.63 52WkHigh:76.61

6/31/2011:74.81 52WkLow: 62.51

Change:1.61%

Electric Merchant


(03Jan07=100)

MerchantElectric:Companieswhoseprimaryactivityisthegenerationofelectricityonanunregulatedbasis.

CalpineCorp. CPNCovantaHoldingCorp. CVADynegyInc. DYNGenOnEnergyInc GENNRGEnergyInc. NRGOrmatTechnologiesInc. ORA


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Index S&P 500

01Jun11:111.71 52WkHigh: 114.94

30Jun11:112.53 52WkLow: 87.09

Change:0.74%

RegulatedT&D(Gas&Electric)


(03Jan07=100)

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

CHEnergyGroupInc. CHGConsolidatedEdisonInc. EDITCHoldingsCorp. ITCNortheastUtilities NUNSTAR NSTPepcoHoldingsInc. POMUnitilCorp. UTL


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Index S&P 500

01Jun11:111.86 52WkHigh: 114.42

6/31/2011:113.05 52WkLow: 77.01

Change:1.07%

NaturalGasT&D(Diversified)


(03Jan07=100)

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

AGLResources AGL NiSourceInc. NIAtmosEnergyCorp. ATO NorthwestNaturalGasCo. NWNCenterPointEnergyInc. CNP ONEOKInc. OKEChesapeakeUtilitiesCorp. CPK PiedmontNaturalGasCo. PNYDeltaNaturalGasCo. DGAS QuestarCorp. STRElPasoCorp. EP RGCResourcesInc. RGCOEnergenCorp. EGN SouthJerseyIndustriesInc. SJIEQTCorp. EQT SouthernUnionCo. SUGLacledeGroupInc. LG SouthwestGasCorp. SWXMDUResourcesGroupInc. MDU SpectraEnergyCorp SENationalFuelGasCo. NFG UGICorp. UGINewJerseyResourcesCorp. NJR WGLHoldingsInc. WGLNicorInc. GAS WilliamsCos.Inc. WMB


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65

75

85

95

105

115

125

135

145


Index S&P 500

01Jun11:126.9652WkHigh: 137.06

6/31/2011:130.46 52WkLow: 108.40

Change:2.76%

MasterLimitedPartnerships (MLPs)


(03Jan07=100)

MasterLimitedPartnerships:Primarilyownersandoperatorsofnaturalgaspipelinepropertieswithanemphasisonmidstreamassets.

AtlasPipelinePartnersLP APLBoardwalkPipelinePartnersLP BWPChesapeakeMidstreamPartners CHKMCopanoEnergyLLC CPNOCrosstexEnergyL.P. XTEXDCPMidstreamPartnersLP DPMElPasoPipelinePartnersLP EPBEnergyTransferPartnersLP ETPEnterpriseProductsPartners EPDKinderMorganEnergyPartners KMPONEOKPartnersLP OKSRegencyEnergyPartnersLP RGNCSpectraEnergyPartnersLP SEP


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NOTES,NEWS &VIEWS

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Black & Veatch and Chemtex will design and build two new liquefied natural gas (LNG) facilities in ShaanxiProvince, China featuring Black & Veatchs patented PRICO process. The plants will be used to provide naturalgas for peak shaving and vehicle fuel in the region.

The Black & Veatch-Chemtex team has won five LNG projects in China since the beginning of 2011, and 13 since2006.

The PRICO process has become very successful in China because of its simplified operations, lower capital andoperating costs and its flexibility in feed gas composition, said Brian Price, Vice President and LNG TechnologyManager for Black & Veatchs energy business. The Black & Veatch-Chemtex team has won more than half of allnew LNG projects in China since 2006, all of which use the PRICO process.

The two facilities will be located in Jingbian City and Yulin City, Shaanxi Province. They will liquefy natural gas for

vehicle fuel in the region, off-setting the use of diesel and gasoline. The use of LNG for vehicle fuel provides bothenvironmental and economic benefits since natural gas has lower emissions than either diesel fuel or gasoline.

Our sustained growth in China is fueled by the success of earlier projects that continue to exceed our clientsexpectations, said Hoe Wai Cheong, Managing Director for Asia and Middle East, India, Europe and Africaregions in Black & Veatchs global energy business. Chinas natural gas pipeline infrastructure is developing, andthe countrys size presents challenges in supplying much-needed clean fuel to local residents and businesses.

The Jingbian Xingyuan LNG Project is located in Jingbian City and owned by Shaanxi Jingbian Xingyuan IndustryLtd. When completed, the facility will have a capacity of 53 million cubic feet (1.5 million cubic meters) per day.

The Yulin Yuanheng LNG Peak Shaving Project is located in Ma Huangliang Industrial Park in Yulin City. Whencompleted, the facility will have a capacity of 35.3 million cubic feet (1 million cubic meters) per day.

PRICO is an innovative process developed by Black & Veatch to liquefy natural gas, making it available fortransport via truck or ocean tanker. The process uses a Black & Veatch-patented, single-mixed refrigerant loop fornatural gas liquefaction. The process provides the lowest capital cost of competing technologies, a simplifiedrefrigeration system that requires minimal equipment, and simplified control and maintenance.

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A major refurbishment of the largest water treatment works for Dee Valley Water PLC, a major UK water utility,will provide long-term security and quality of water supplies to Wrexham, UK, and the surrounding area. Tenderedas a single project, Black & Veatch has been appointed as the design and build partner to upgrade and replace theageing water treatment assets at the Llwyn Onn water treatment works.

A prominent consideration in our design will be to minimize operational cost and energy consumption which is ofcritical importance. Black & Veatch Bid Manager Mat Fairfax said. Additionally, we are committed to minimizethe works environmental impact through waste-efficient design and construction execution that fulfils carbonreduction and waste-to-landfill objectives.

Dee Valley Water PLC operates in an area of 831 square kilometers covering Chester and North East Wales andNorth West England. It supplies 23 million cubic meters of drinking water per year to a population of 258,000,including domestic, commercial, industrial and business customers. The water utilitys asset base consists ofapproximately 2,000 kilometers of water mains, six treatment works and more than 50 water storage tanks andpumping stations.


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The rebuilt works will be constructed within the constraints of the existing site. The 16 million upgrade forms thelargest single project being delivered under Dee Valley Waters five-year capital investment program, which ismainly targeted at the renewal of assets that are approaching the end of their useful lives.

The contract will be executed in two phases. The six-month design period began in April 2011, and will be followedby an 18-month construction period. All works are planned to be complete by April 2013.

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Black & Veatch released the results of its fifth annual Strategic Directions in the Electric Utility Industrysurvey on June 13in which more than 700 U.S. utility leaders took part. Among the top findings, participants believe that energy andcommodity prices will rise significantly in the next five years, and water has become the top environmental andbusiness issue.

More than 70% of survey participants agreed or strongly agreed that energy and commodity prices would risesignificantly in the next five years, signifying tremendous capital investment needs across the nations electric utilitysystem, said Rodger Smith, President of Black & Veatchs management consulting business.

There is also a growing awareness of the nexus of water and energy issue within the industry, he said. For thefirst time, water supply has become the top environmental concern among survey participants and watermanagement was rated as the business issue that could have the greatest impact on the utility industry.

Other highlights include:

Lack of national energy policy impedes investment in new technology. Smart Grid programs are hamstrung by a lack of customer interest and knowledge. Coal will remain an important part of the U.S. energy mix. More than 77% of respondents virtually the

same percentage as last years survey results believe when fiscal realities are considered, coal remains key inthe U.S. energy portfolio.

Natural gas leapfrogs nuclear and wind as the top environmentally friendly technology among all surveyparticipants, although utility respondents still prefer nuclear.

Survey participants are optimistic that electric vehicles will account for approximately 8% of their annualenergy load by 2025. They estimate that electric vehicles will account for 1% of their annual energy load byas early as next year. Nationwide, 1% of annual energy load equates to approximately 5,300 megawatts ofbaseload capacity, the energy equivalent to power more than 5 million homes.

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

(C) Copyright 2011, Black & Veatch Holding Company. All rights reserved worldwide. This report is prepared for general circulation and is circulated for general informationonly. Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any security or any option, future or otherderivative related to such security. The information provided here is for general informational purposes only and should not be considered an individualized recommendationor personalized advice about investments. Data contained here are obtained from what are considered reliable sources; however, its accuracy, completeness or reliabilitycannot be guaranteed. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.

Black & Veatchs management consulting group is among the worlds premier strategic, economic and management consulting companies specializing in energy, waterinformation and government matters. We encourage our professionals to publish individual commentary on key industry issues. Any opinions offered are those of the authorand not necessarily official viewpoints of the company or its other employees. Additional information is available at www.bv.com.


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