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					                                              Friends of
                                              Friends of
                                              the Earth
                                              the Earth

July 16, 2009
July 16,2009
                                                                                              VVL   ] 7 pn09
                                                                                              JUL   I 7 2009 i),,,
Mr. Charles Terreni
Mr. Charles Terreni
Chief Clerk and Administrator
Chief Clerk and Administrator
Public Service Commission
Public Service Commission      of South Carolina,
                               of South Carolina,
101 Executive Center Dr. Suite 100
101 Executive Center Dr.,, Suite 100
             29210
Columbia, SC 29210
Columbia,

     Articles on Financial DownRradinR
                           Down radin             to SCE&G         Pro'ect Docket 2008-196-E
                                              Due to SCE&G Nuclear Proiect (Docket 2008-196-E)

Dear Mr. Terreni,
Dear Mr. Terreni,


     writing to        behalf of Friends of the Earth, which maintains
I am writing to you on behalf of Friends of the Earth, which maintains
I                                                                                      on-going interest in
                                                                                    an on-going interest in
the matter of oversight of the S.C. Public Service Commission
the matter of oversight of the S.C. Public Service Commission            of the costly           nuclear
                                                                         of the costly and risky nuclear
reactor project    South Carolina Electric & Gas (SCE&G).
reactor project by South Carolina Electric & Gas (SCE&G).


For     docket         I request that the attached       be posted in docket 2008-196-E
For the docket record, I request that the attached items be posted in docket 2008-196-E on the
PSC website:
     website:

    1. Nuclear opponents,
    1. Nuclear opponents,       SCE&G debate        The State, July 16, 2009
                                SCE&G debate costs, The State, July 16, 2009


    2.       feels        bite                   Charlotte Business Journal, July 15, 2009
    2. SCANA feels rating bite on nuclear plant, Charlotte Business Journal, July 15, 2009


    3.
    3. Fitch Downgrades
             Downgrades            &
                             SCANA & Subsidiaries,                             25, 2009
                                                           Business Wire, June 25, 2009
                                                           Business Wire,

    4. Cover page of Moody's report New         Generation:         Pressure
    4. Cover page of Moody's report New Nuclear Generation: Ratings Pressure Increasing,
       June 2009
       June 2009

                   to formally maintain these items      part of the record, at least
It important to formally maintain these items as part of the record, at least via what is posted
It is important                                                                         what     posted
     the docket website,       the nuclear project                    the event that scheduling
                                                         forward. In the event that scheduling
on the docket website, as the nuclear project goes forward.
on
                 cost increases are subject to      review, these       other articles     reports will
slippage and cost increases are subject to PSC review, these and other articles and reports will
slippage
     essential     establishing the progress of the project,    noting the context     which the
be essential in establishing the progress of the project, in noting the context in which the
project                                            problems it encounters.
                                 documenting any problems it encounters.
project was pursued and in documenting
                pursued

Respectfully
Respectfully   Submitted—
               Submitted -




Tom Clements
Tom Clements




                             1112 Florence Street ~ Columbia,
                             1112 Florence Street • Columbia, SC 29201
                                                              SC 29201
               803.834.3084 phone & fax •~ tomclements329@cs.com corn • www.foe.org
               803.834.3084 phone 8 fax tomclements329@cs.             ~ www.
                                                                              foe. org
                                       100% post consumer waste       100%             .~
                        (_) Printed on 100% post consumer waste using 100% wind power. ®_,0   ~
?

                                                                    g6 ate
                                                                    Pbetgtate
                                                             COLUMBIA
                                                             COLUMBIA        ~•   SOUTH CAROLINA
                                                                                   SOUTH CAROLINA




                     BUSINESS
                                                     THURSDAY, JULY I 6, 2009 ~* PAGE 86
                                                     THURSDAY, JULY 16, 2009     PAGE 136




                                                                                                    NUKE
      Nuclear opponents,
     Nuclear opponents,                                                                             FROM PAGE
                                                                                                    FR(!M    PAG_E B6
                                                                                                                     86
                                                                                                          'I'hisS is not a cost overrun,    "
                                                                                                                  is
                                                                                                          'qhis is not a cost overrun,"
                                                                                                          "'


     SCE&G
     SCEkG debate costs                                                                              said
                                                                                                     spokesman
                                                                                                                 Eric
                                                                                                                 Eric

                                                                                                     based utility.
                                                                                                     based utility.
                                                                                                                          Boomhower,
                                                                                                                          Boomhower,
                                                                                                     spokesman for the Columbia-
                                                                                                                                            a


                                                                                                          In its report, the utility said the
                                                                                                          In its report, the utility said the
                                                                                                                                             a



                                                                                                     cost could be as much as $562 mil-
                                                                                                                           much           mil-
     Utility says there are no                      units harl climbed $561.9 million to
                                                            had climbed $561.9
             says there are                         $6.875 billion, the Office of Regulatory
                                                    $6.875 billion,
                                                                                                     lion over the initial estimate or
                                                                                                                                 estimate
     overruns in estimates it
     overruns in estimates it                       Staff on Wednesday attributed the higher
                                                              Wednesday attributed        higher
                                                                                                     $172 million under.
                                                                                                     S172 million under.
                                                                                                                     interest
                                                                                                          Current interest rates are lower
       made to get OK for 2
       made                                         figure to how the price was calculated.
                 get OK for                              Project opponents charge South Car-
                                                                             charge South
                                                                                                     and when the cost of money is
                                                                                                     and when the cost of money is
      new Jenkinsville units
      new Jenkinsville units                        olina Electric 8t Gas Co. low-balled the
                                                     olina Electric &            Iow-balled the
                                                                                                     spread out over the life of the pro-
                                                                                                     spread out over the life of the pro-
                                                                                                     ject, SCE8EG's share of the project
                                                                                                    ject, SCE&G's share of the project
                                                                                          for
                                                    estimate when it sought approval for the         should         closer to its initial
                                                                                                     should be closer to its initial esti-
                                                    project              state Public Service
                                                    project from the state Public Service
              By            CRUMBO
                   CHUCK CRUMBO
              By CHUCK
                                                    Commission.                                      mate of $6.3 billion, regulators
                                                                                                     mate of $6.3 billion, regulators
               ccrumbo(,  thestate.com
               ccrumho(iithestote. corn             Commission.
                                                                                                     said.
                                                                                                     said.
                                                         The estimate vvas based        using a
                                                         The estimate was based on using a
                                                                                                          The overall cost of the project,
                                                                                                         The overall cost of the project,
                      by state regulators of
        A review by state regulators           of   five-year average of commodity
                                                    five-year average of commodity costs, in- in-
                                                                                                     which SCE8EG is sharing with
                                                                                                     which SCE&G is sharing with
    SCE&G's first quarterly report on the cost
    SCESEG's first quarterly report on the          cluding interest on construction loans,
                                                     cluding interest      construction loans,
                                                                                                     state-operated Santee Cooper, is
                                                                                                     state-operated Santee Cooper, is
    of the Jenkinsville nuclear project trig-
    of the Jenkinsville nuclear project trig-        according to the SCE8 G report. The
                                                    according to the SCE&G report. The
    gered debate Wednesday over whether                                                              $9.8 billion.
                                                                                                     $9.8 billion. .
    gered debate Wednesday over whether              lower price is figured on a 10-year aver-
                                                    lower price is figured on a 10-year aver-
                                                                                                          Opponents of the plant, though,
                                                                                                         Opponents of the plant, though,
    the utility is facing hefty cost overruns.
    the         is facing hefty cost overruns.      age, it added.
                                                     age, added.                                     said SCE&G has underestimated
                                                                                                     said SCE&G has underestimated
        While it appears in the report that
        While it appears iii the report that
                                                                                                     the project's cost.
                                                                                                    the project's cost.
    SCE&G's costs for adding two i'eactor
    SCE8EG's costs for adding two reactor                        NUKE PAGF. 87
                                                             SEF NUKE PAGE B7
                                                             SEE                                          "I take this report as a warning
                                                                                                         "I take this report as a warning
                                                                                                     of greater problems this project is
                                                                                                    of greater problems this project is
                                                                                                     going to run into, said Tom
                                                                                                                                "
                                                                                                    going to run into," said Tom
                                                                                                                      with Friends of the
                                                                                                     Clements with Friends of the
                                                                                                    Clements
                                                                                                     Earth. "It's affirmation that we are
                                                                                                    Earth. "It's affirmation that we are
                                                                                                     getting into unknown and very
                                                                                                    getting into unknown and very
                                                                                                     risky territory.
                                                                                                                         "
                                                                                                    risky territory."
       SOUTH CAROLINA OFFICE OF REGULATORY STAFF'S                                                        Dukes Scott, Regulatory Staff
                                                                                                         Dukes Scott, Regulatory Staff
       SOUTH CAROUNA OFFICE OF REGULATORY STAFF'S                                                    executive director, said "construc-
                                                                                                    executive director, said "construc-
       REVIEW OF THE SOUTH CAROLINA ELECTRIC & GAS COMPANY
       REVIEW OF THE SOUTH CAROLINA ELECTRIC 8E GAS COMPANY                                          tion is progressing in accordance
                                                                                                    tion is progressing in accordance
       MARCH 31, 2009 QUARTERLY REPORT
        MARCH 31, 2009 QUARTERLY REPORT                                                              with the approved schedule and al-
                                                                                                    with the approved schedule and al-
       ON THE BUDGET AND SCHEDULE                                                                    lowed 18-month milestone devia-
                                                                                                    lowed 18-month milestone devia-
       ON THE BUDGET AND SCHEDULE                                                                   tion.""
                                                                                                     tion.
       OF V.C. SUMMER UNITS 2 & 3 CONSTRUCTION
       OF V. C. SUMMER UNITS 2 gE 3 CONSTRUCTION                                                          SCE8EG is required by state
                                                                                                         SCE&G is required by state
                                                                                                    regulators to file quarterly reports
                                                                                                      regulators to file quarterly reports
                                                                                                      on the project's progress.
                                                                                                    on the project's progress.
        July 14, 009
       July 14, 009
                                                                                                           In February, state regulators
                                                                                                         In February, state regulators
                                                                                                      approved the power company's
                                                                                                    approved the power company's
                                                                                                      plans to build two reactor units.
        http: //www. regulatorystaff. sc.gov/ORSReport33109. pdf
       http://www.regulatorystaff.sc.gov/ORSReport33109.pdf                                         plans to build two reactor units.
                                                                                                      SCE8EG now needs the OK from
                                                                                                    SCE&G now needs the OK from
                                                                                                      the federal Nuclear Regulatory
                                                                                                    the federal Nuclear Regulatory
                                                                                                      Commission to proceed.
                                                                                                    Commission to proceed.
                                                                                                          The first unit is scheduled to
                                                                                                         The first unit is scheduled to
                                                                                                      begin commercial operation some-
                                                                                                    begin commercial operation some-
                                                                                                     time in 2016; the second unit in
                                                                                                    time in 2016; the second unit in
                                                                                                      2019.
                                                                                                    2019.
 Charlotte Business Journal
Charlotte Business Journal


 http: //charlotte. bizjournals. corn/charlotte/blog/power           city/2009/07/scana
http://char__tte.bizj_urna_s.c_m/char__tte/b__g/p_wer-city/2__9/_7/scana-fee_s-rating-bite-   feels rating bite
 on nuclear plant.
on_nuclear_plant.html html


SCANA feels rating bite on nuclear plant
SCANA feels rating bite on nuclear plant

 John Downey
John Downey
 jdowney@bizjournals.
jdowney@bizjournals.com corn


Wednesday, July 15, 2009
Wednesday, July 15, 2009


Moody's Investor Services lowered SCANA Corp.'s 's bond rating this week and listed the outlook
Moody's Investor Services lowered SCANA Corp. bond rating this week and listed the outlook
as negative because of the S.C. utility's joint ownership of a $12 billion nuclear project under
as negative because of the S.C. utility's joint ownership of a $12 billion nuclear project under
construction.
construction.


Moody's warned investors two weeks ago that it was likely to take a negative view on nuclear
Moody's warned investors two weeks ago that it was likely to take a negative view on nuclear
             by power companies. Some in the nuclear industry have taken          with that
development by power companies. Some in the nuclear industry have taken issue with that
development
policy. But Moody's stood     it when explaining its decision on SCANA.
policy. But Moody's stood by it when explaining its decision on SCANA.

"We remain concerned with the ..
"We remain concerned with the .... risks associated with a project of this magnitude
                                         associated with a project of this magnitude                 for
                                                                                                    for a
company of this size, "     Moody's Senior Vice President     Hempstead.
company of this size," said Moody's Senior Vice President Jim Hempstead.


      subsidiary
SCANA subsidiary S.C. Electric &        expanding the V.C. Summer Nuclear Station with Santee
                 S.C. Electric & Gas is expanding the V.C. Summer Nuclear Station with Santee
                                                                        the existing nuclear
Cooper. The power companies are adding two AP100 nuclear reactors at the existing nuclear
Cooper.     power companies        adding two AP100 nuclear reactors
plant.
plant.


Schedule slips
Schedule slips


Meanwhile, the S.C. Office of Regulatory Staff notes in a report filed Tuesday that several parts
Meanwhile,     the S.C. Office of Regulatory Staff notes      report filed        that
of the project have slipped off schedule. The staff points out that SCE&G says none of the
of the project                 off schedule. The staff points out that SCE&G says       of
delays are serious enough to affect the anticipated completion date for each unit.
                     enough to affect the anticipated    completion        for    unit.

"SCE&G indicates that this is a result of the creation of the first fully integrated project schedule
 "SCE&G indicates         this is a result of    creation of the first fully integrated    project
    its contractors and is not a trend, " the staff writes. "If these changes do indicate a pattern,
by its contractors
 by                      is not a trend," the staff writes. "If these changes         indicate a pattern,
then a trend of this sort this early in the project is cause for concern.
then a trend of this sort this early in the project is         for concern."
                                                                                   "
Overall, the staff says, the project appears to be on budget and on time. SCE&G now estimates
 Overall, the staff says, the project appears to be on budget and on time. SCE&G now estimates
                                                                              —
its share of the project may cost more than originally projected -- $6.8 billion rather than $6.3
 its share of the project may cost more than originally projected      $6.8 billion rather than $6.3
billion. But that is not the result of any cost overruns. The company updates its calculations of
  billion. But that is not the result of any cost overruns. The company updates its calculations of
future prices and financing charges every quarter, and those new calculations account for the
 future prices and financing charges every quarter, and those new calculations account for the
higher costs.
  higher costs.
Costrecoverv concerns
Cost recovery concerns

    uncertainties
But uncertainties    surrounding
                     surrounding     nuclear
                                     nuclear construction       clearly having              the
                                                            are clearly having an impact in the capital
markets.     those issues are reflected in Moody's downgrade.
markets. And those issues are reflected in Moody's downgrade.

The rating agency reduced         senior unsecured
The rating agency reduced SCANA's senior unsecured            debt rating one notch to Baa2 from Baa1.
                                                              debt rating one notch to Baa2 from Baa2.


The report cites weakened
The report cites a weakened         balance sheet for SCANA     its subsidiary.
                                    balance sheet for SCANA and its subsidiary.    It notes South
                                                                                   It notes South
                                in 2007, creates
Carolina's Baseload Act, passed in 2007, creates a supportive
Carolina's Baseload Act,                           supportive         regulatory
                                                                      regulatory   environment
                                                                                   environment   for
                                                                                                 for
construction
construction   of the nuclear plant. But it warns that it does not believe          guaranteed
               of the nuclear plant. But it warns that it does not believe SCANA is guaranteed         to
                                                                                                       to
recover all of its construction
recover     of its construction     costs.
                                    costs.


Two weeks ago, Fitch              downgraded
Two weeks ago, Fitch Ratings also downgraded                 to BBB+ from A-. Fitch also cited
                                                       SCANA to BBB+ from A-. Fitch also cited
"financial pressure     increased          risk from SCE&G's       to construct     finance two
"financial pressure and increased business risk from SCE&G's plans to construct and finance two
nuclear
nuclear generating    units.
                      units."
                                "
     25, 2009
June 25,2009


Business Wire
Business Wire

Fitch Downgrades
Fitch Downgrades             SCANA & Subsidiaries'
                             SCANA & Subsidiaries'               IDRs to BBB+
                                                                 IDRs to BBB+

NEW YORK--(BUSINESS WIRE)-Fitch Ratings has downgraded
NEW YORK-(BUSINESS WIRE)--Fitch             downgraded               the Issuer Default Ratings (IDRs)
                                                                    the Issuer Default Ratings (IDRs)
of
of SCANA Corp.
         Corp.                its subsidiaries
                  (SCANA) and its subsidiaries South Carolina Electric & Gas Co. (SCE&G) and
                                               South  Carolina Electric &         Co. (SCE&G)
 Public Service Co. of North Carolina        to 'BBB+' from     'A-'. Fitch also downgraded
 Public Service Co. of North Carolina (PSNC) to 'BBB+' from 'A-'. Fitch also downgraded the   the
                  ratings one notch    shown     the list of rating actions at the end of this release.
individual issue ratings one notch as shown in the list of rating actions at the end of this release.
individual
                        of
The short-term IDRs of SCANA, SCE&G and PSNC and commercial paper ratings of SCE&G, PSNC
The short-term                    SCE&G                   commercial paper ratings of SCE&G,
      South Carolina       Company are affirmed at   'F2'. The Rating Outlook for each entity is
and South Carolina Fuel Company are affirmed at 'F2'. The                 Outlook for each entity
Stable.
Stable.

The downgrades
The downgrades     are driven    the financial pressure     increased          risk from SCE&G's
                   are driven by the financial pressure and increased business risk from SCE&G's
      to construct and finance two nuclear                units for service     2016
plans to construct and finance two nuclear generating units for service in 2016 and 2019,2019,
                            in credit         measures over         past 18
respectively, and a decline in credit quality measures over the past 18 months. SCE&G will own
                                                                                     SCE&G
55% of                   an estimated cost of $6. billion.
55% of the two units at an estimated cost of $6.33 billion. The nuclear investment, together with
             two units                                                     investment, together
                                     of                $500
maintenance capital expenditures of approximately $500 million annually, will more than
                                                              million annually,
       SCE&G's existing
double SCE&G's existing net investment         in property             equipment.
                                                             plant and equipment.     Expenditures
                                                                                      Expenditures   are
expected to         the years 2012 to 2014. Management
expected to peak in the years 2012 to 2014. Management             expects to fund approximately
                                                                   expects                            50%
                                                                                                      50%
of
of the expenditures             debt.
                       with new debt.


The credit impact of the incremental
The credit impact of the incremental     debt burden
                                         debt burden        softened
                                                         is softened by legislation
                                                                        legislation       South Carolina,
                                                                                       in South Carolina,
the Base Load Review Act         which permits utilities to recover capital costs, including
the Base Load Review Act (BLRA), which permits utilities to recover capital costs, including           a
return    equity, during construction.
return on equity, during construction.    Other risk mitigants
                                          Other risk mitigants     include        contract that fixes
                                                                   include an EPC contract that fixes a
portion of the plant cost       substantial
portion of the plant cost and a substantial      equity commitment.
                                                 equity commitment.     Although
                                                                        Although    the credit quality of
                                                                                    the credit quality of
subsidiary
subsidiary   PSNC    not directly affected    the events at SCE&G, the weakening
             PSNC is not directly affected by the events at SCE&G, the weakening           consolidated
                                                                                           consolidated
credit quality of       accounts for the lower rating for
credit quality of SCANA accounts for the lower rating for PSNC.


Fitch has downgraded
Fitch has downgraded     SCANA and     subsidiaries'
                         SCANA and its subsidiaries'                follows:
                                                         ratings as follows:
                                                         ratings

      Corporation
SCANA Corporation
-IDR to 'BBB+' from 'A-';
--IDR to 'BBB+' from 'A-';
-Senior Unsecured debt to 'BBB+' from 'A-'.
--Senior Unsecured debt to 'BBB+' from 'A-'.
SCE&G
SCE&G
— to 'BBB+' from 'A-';
--IDR to 'BBB+' from 'A-';
   IDR
-First Mortgage bonds to 'A' from 'A+';
--First Mortgage bonds to 'A' from 'A+';
-Senior Unsecured debt to 'A-' from 'A';
--Senior Unsecured debt to 'A-' from 'A';
-Preferred Stock to 'BBB+' from 'A-'.
--Preferred Stock to 'BBB+' from 'A-'.
PSNC
PSNC
-IDR to 'BBB+' from 'A-';
--IDR to 'BBB+' from 'A-';
-Senior Unsecured
--Senior Unsecured    debt to 'A-' from 'A'.
                      debt to 'A-' from 'A'.
Fitch has affirmed SCANA andits subsidiaries' ratingsasfollows:
Fitchhasaffirmed SCANA its subsidiaries'ratings as follows:
                         and

SCANA Corporation
SCANA    Corporation
—
--Short-termIDRat 'F2'.
  Short-term IDR at 'F2'.
SCE&G
SCE&G
--Short-termIDRat 'F2';
-Short-term IDR at 'F2';
— Commercial Paper at 'F2'.
--CommercialPaperat 'F2'.
PSNC
PSNC
--Short-termIDRat 'F2';
-Short-term IDR at 'F2';
-Commercial Paperat 'F2'.
--CommercialPaper at 'F2'.

 Fitch's rating definitions and the termsof use of such ratings are available on the agency's
Fitch'sratingdefinitionsandthe terms of useof suchratingsareavailableon the agency's
 public site, www.fitchratings.com.Published ratings, criteria and methodologies
publicsite, www. fitchratings. corn. Publishedratings,criteriaand methodologies are available
                                                                                      are available
from this site, at all times. Fitch'scodeof conduct, confidentiality, conflicts of interest, affiliate
from this site, at all times. Fitch's code of conduct,confidentiality,conflictsof interest, affiliate
firewall, complianceandother relevant policiesandproceduresare alsoavailablefrom the
firewall, compliance and other relevant policies and procedures are also available from the
'Codeof Conduct'sectionof this site.
'Code of Conduct' section of this site.

Contacts
Contacts

Fitch Ratings, New York
Fitch Ratings, New York
Robert Hornick, 212-908-0523
Robert Hornick, 212-908-0523
     Schmidt, 212-908-0644
Jill Schmidt, 212-908-0644
or
or
Media Relations:
Media Relations:
Francoise Alos, +33 1 44 29 91 22,
Francoise Alos, +33 1 44 29 91 22, Paris
Email: francoise. alosofitchratings.
Emaih francoise.alos@fitchratings.com   corn



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http://www.businesswire.c_m/p_rta_/site/g__g_e/?ndmview_d=news-view&news_d=2__9_625
006060&newsLang=en
O06060&newsLang=en
f




                                                                                                                ~ ~ ~                  ~ ~ e


    Special Comment
    Special Comment
                                                      june 2009
                                                      June 2009


          of Cordents:
    Table of Contenls:                                New Nuclear Generation:
                                                      New Nuclear Generation:
    Summary
    Summary                                      1
                                                 1
    Overview
    Overview                                     2
                                                 2    Ratings Pressure Increasing
                                                      Ratings Pressure Increasing
    Nuclear's "bet~farm"
    Nuclear's "bet-the-farm" risk                2
                                                 2
               rating trends are
    Historical rating trends are not good        3
                                                 3
          consbuction      pressure
    Plant construction can pressure metrics      5
                                                 5
    Piecedents olfer limited insight
    Precedents offer limited insight             5
                                                 5    Summary
                                                      Summary
                    meaningful improvement
    Metrics show no meaningful improvement       7
                                                 7
                                                 8    w      Moody's    considering taking a      negative view for those issuers
                                                             Moody's is considering taking a more negative view for those issuers
    Benefits of near4erm               limited
    Benefits of near-term recovery are limited   8
            Power
    Public Power and Cooperatives are                        seeking to build     nudear power plants
                                                             seeking to build new nuclear power plants
    positioned with fiexible cost recovery
    positioned with flexible cost recove_
                                                      •      Rationale    premised on material increase in business and operating risk
                                                             Rationale is premised on a material increase in business and operating risk
    mechanisms        rale pressure is       8
    mechanisms but rate pressure is expected 8
    Is size an issue?
    Is size an issueV                        9
                                             9        tI                                                        once operating, nudear
                                                             Longer-term value proposition appears intact, and, once operating, nudear
                                                             Longer-term value proposition         intact,
    Conclusion
    Conclusion                                   9
                                                 9                      viewed favorably due    their economics and no-carbon emission
                                                             plants are viewed favorably due to their economics and no-carbon emission
                                                             plants
             A: Historical rating ac@one
    Appendix A: Historical rating actions        11
                                                 11          footprint
                                                             footprint
    Moody's Related Research
    Moody's                                      13
                                                 13
                                                             Historically, most nudear-building  utilities suifered ratings downgrades-
                                                             Historically, most nuclear-building utili0es suffered ratings downgrades_
                                                                                      —                 facilities
                                                             and sometimes several while building these facilities
                                                             and sometimes several_while building

    Analyst Contacts:
    Analyst                                                                                                                   nudear
                                                             Poli_cal and policy conditions are spurring applications for new nuclear
                                                             Polical      policy conditions     spumng applications for
                                                                                      first time in years
                                                             power generation for the first time in years
                                                             power generation for
     New York
     New York                 1.212.553.1653
                              1.212.553.1653
                                                      s      Nevertheless, most utilities now seeking to build nuclear generation do not
                                                             Nevertheless, most utilities     seeking    build nuclear generation    not
    Jim Hempstead
    Jim Hempstead                                                                         financial policies, a        negative
                                                             appear to be adjusting their financial policies, a credit negative
                                                                    to    adjusting
    Senior Vice President
    Senior Vice President
                                                                                                            away, and economic, political
                                                             First federal approvals are at least two years away, and economic, political
                                                                   federal approvals
        Aschenbach
    Dan Aschenbach                                                                                    before
                                                             and policy equations could easily change before then
                                                             and        equations
    Senior Vice President
    Senior Vice President
                                                                                slowly on              Guarantees, which will provide
                                                             Progress continues slowly on Federal Loan Guarantees, which will provide
       J.
    A. Sabatelle
    A.J. Sabatelle
                                                               lower-cost source of funding but      only modestly mitigate incieasing
                                                             a lower-cost source of funding but will only modesthj mitigate increasing
     Senior Vice President
     Senior      President                                   business
                                                             business and opera_ng risk profile
                                                                          operating risk profile
    Mike Haggarty
    Mike Haggarty
                                                      =      Partnerships,               strengthening, bolstering liquidity reserves and
                                                             Partnerships, balance sheet strengthening, bolstering liquidity reserves and
     Vice President —               Oscar
     Vice President - Senior Credit O#'¢er
                      Senior                                                             to core
                                                             "back-to-basics" approaches to core operations could help would-be
                                                             =back-to-basics"                               could
           Schumacher
     Laura Schumacher                                                                         ratings
                                                             nuclear utilities maintain their ratings
                                                                     utilities maintain
     Vice President- —
     Vice President   Senior Analyst
                      Senior Analyst
                                                      This _cial   Comment is    addendum        prior research re_
                                                      This Special comment is an addendum to our prior resea_           associated
                                                                                                                reports associated
    WIlliam L. Hess
    William L. Hess
                                                                                                                                     the U. S. These
                                                                      implications of building new
                                                      with the credit implications of building new nuclear generation
                                                      with                                                                        in the U.S. These
     Team Managing
     Team Managing Director
                                                                         entitled "New Nuclear
                                                          prior reports, entitled =New Nuclear Generating       Capacity:
                                                                                                                Capacity:   Potential Credit
                                                                                                                            Potential Credit
                                                                                                                                     "New
                                                          Implications for U. S. Investor Owned Utilities" published in May 2008 and "New
                                                          Implications     U.S. Investor        Utilities" published    May 2008
                                                          Nudear Generation
                                                          Nuclear Generation      the        States:                 Open    Addressing
                                                                               in the United States: Keeping Options Open vs Addressing
                                                                                            October 2007 are referenced in the back
                                                      An Inevitable Necessity" published in October 2007 are referenced in the back
                                                         inevitable Necessity" published
                                                                                            Research.
                                                          under the section Moody's Related Research.
                                                                    section Moody's




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                                                                                                                        Investors Service
                                                                                                          MoocIy's Investors
                                                                                                          Moody's

				
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