Q2 forecast

Attached is a spreadsheet that compares our original plan (budget plus
overview) to our forecast for the 2nd quarter with actuals for April and May
and last months forecast for June. We are in the process of completing our
May closing but the IBIT number for May is 99% complete. The June forecast
was prepared last month and we are now in the process of updating our forecast
of power cost and IBIT for June. We should complete that next week. Curves
in the west continue to come down which will potentially reduce our IBIT for
June, but I will know more next week.

The spreadsheet shows 70.1 million IBIT compared to what I provided you early
this week of 65 million. The primary difference is power cost and our view
that given the current movement in wholesale prices from May 8 that power cost
could rise by an additional 5 million from that level. We are currently in
the dead band zone for the PCA so any change in power cost go right to IBIT.
There is one other issue related to power cost concerning our need to
potentially increase our reserves for the California receivables. AA
continues to push us on this issue to increase the amount of reserves. If we
have a good June we might want to increase our reserves, however this is
something we will talk with Bob Butz about early next month when June results
are available.

Please call if you would like to discuss this further. We will have a better
look at June next week once the updated forecast is completed.