Energy Generation and Pricing Strategy

OF INDIANA Witness/Party CAPM Morin/PSI 10.20-10.70% Summary of ROE Estimates and Areas of Disagreement Inman/IURC 9.21% STATE Gorman / PSI- Kaufman/OUCC IG 7.98 -8.59% 9.50 -9.80% Original Updated DCF RP ARP 10.70 -13.60% 10.90-12.30% 11.30-11.40% 10.42 -13.52% 7.94 10.12% 10.10% 9.69 - 11.02% 11.30-11.40% NA NA NA 9.40 10.90% Recommendation 11.50% 10.25 -10.50% 9.15% 10.00% CAPM 10.90 -11.40% NA 8.48-9.09% NA DCF 10.30-12.10% NA 8.02-9.67% NA RP 10.90-12.50% NA NA NA ARP 11.30-11.40% NA NA NA Recommendation 11.20% 10.35 -10.55% 9.25% NA Major Areas of Disagreement - All Models All Floatation costs Adjustment 0.30% 0.15% 0.05 -0.10% 0.00% Beta 0.72 0.72 0.65 -0.70 0.64 CAPM Market Risk Premium Mean "Arithmetic vs. Geometric Arithmetic Both Both Arithmetic ECAPM Accept Reject Reject Reject Half - vs. Full-Year Div. Growth Full-Year Half-Year Half-Year Full-Year DCF Quarterly Compounding Adj. 0.20% 0.20% 0.00% 0.00% RP Risk Premium Mean "Arithmetic vs. Geometric" Arithmetic Both NA NA 6

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