ICC Study on Competition

I just had the opportunity to review a report issued by the ICC assessing
retail and wholesale competition in Illinois. If you would like a hard copy,
let me know. Salient facts/ conclusions are as follows:

1. Switching rates are high in Com Ed territory only. By end of 2000, 22%
of eligible customers had switched, representing 62% of usage. Larger usage
customers are switching with greater frequency than smaller usage customers.
Approximately 40% of delivery service customers were using the PPO. Approx.
8 marketers are active in Com Ed with only 3or 4 acquiring significant
numbers of customers.

2. ICC believes retail prices may increase dramatically in 2005 by the time
the general rate freeze expires.

3. ICC is concerned about wholesale competition noting that utilization of
the PPO evidences little physical delivery by suppliers. ICC is also
concerned about the ability of the Illinois transmission system to support a
competitive wholesale market within and between utilities. The number of
TLR's attained record levels last years and there are concerns about managing
load pockets. If the situation remains unchanged, retail prices will be
higher than they would have been had the market structure supported wholesale
competition.

4. Non-Coincident Peak demand in Illinois in 1999 was 29,561Mw and 28,040MW
in 2000, however overall growth in demand is 1.4%.

5. The most successful suppliers are either Illinois utilities or affiliates
of Illinois gas and electric utilities, raising market power concerns.

6. ICC is investigating the capacity of the Illinois utilities' transmission
and distribution systems. As part of the study, the ICC will be developing a
comprehensive computer simulation model of the regional transmission grid to
identify problem spots on the grid including potential load pockets as well
as inter-utility constraints that may limit wholesale deliveries during
critical peak hours. This will assist in state and federal proceedings.

7. The ICC is concerned about the market power exercised by utilities and
has been collecting data on each utility's interconnection and transmission
queues to watch for signs of favoritism directed towards their affiliates or
any other violations of FERC Order 888.

Hope this is useful.

Janine