…While Investing To Achieve Excellence In Reliability

247

315 320

30%

Transmission capital investment03-06; $ millions

296

335 330

Distribution capital investment03-06; $ millions

13%

SAIDI1 benchmarks (non-storm)98-06E; Minutes

03 topquartile

TXU 04E per-formance

TXU 06Etarget

TXU 05Etarget

11%

77 78 6874

1 System Average Interruption Duration Index

TXU Electric Delivery

TXU Electric Delivery Has A Strong Competitive Position…

Large customer base03; Millions of customers

Large infrastructure03; Thousands of miles of primary distribution lines

High growth03-12E; Percent annual demand growth

TXU TXU

ERCOTFRCC

SERCECAR

WECCMAPP

MAACSPP

MAINNPCC

2.5 2.52.3 2.2 2.1

1.9 1.8 1.8 1.81.4

5.2 5.2

4.1 4.1

3.1 2.9 2.8 2.62.2 2.2

86 8573 69 67 62 57 53

39

Source: FERC

EXCPCG SO PGN ETR D DUKEDFPL

Source: NERC Source: PA Consulting

Source: Proprietary benchmarking study

143

Top quartile safety record03; Lost time incidents per 200,000 hours

0.12

0.21

0.14

0.25

0.43

0.28

0.40

0.27

0.12

TXU

…Focused On Providing The Lowest Cost…

T&D O&M expense/distribution customer03-04; $ per customer

TXU 03 performance

03 top quartile

03 top

decile

TXU 04E performance

2.71 2.46 2.19 2.19

TXU 03 performance

03 top quartile

03 top

decile

85

77 77 76

TXU 04E performance

T&D O&M expense per MWh delivered03-04; $/MWh delivered

$24.01

$24.27

$34.03

$25.89

TXU

Center-point

AEPCentral

AEP North

TNMP

$27.97

Monthly wires charges04; Dollars1

1 Assumes 1000 KWH monthly customer; Electric Delivery’s average residential consumption for 2003 was about 1300 kWh. Other non-operating charges,including system benefit fund, nuclear decommissioning charge, excess mitigation credit, retail clawback credit, transition charge on securitized regulatoryassets and merger savings/rate reduction riders have not been included.

03 05E 06E03 05E 06E

OKLAHOMA

TITUS

FRA NKLINCO LLINDEN TO N

G R AYSO N

CO O KE

M O NTA G UE

YO UNG

ARC HER

STE PHE NS PALO P INTO

PAR K ER

TAR RANT DALLAS

RO CKW ALL

HUN T

HO PKINS

RAINSW ISE

JACK

CLAY

FAN NIN

CHE RO KE E

RED R IV ER

CAM P

LAM AR

W O O DUPS HUR

SM ITH

HEN DERSO N

AND ERSO N

FRE ESTO NE

LIM ESTO NE

NAV A RRO

JO HNS O N

BO SQ U E

HILL

M cLE NNAN

FALLS

RO BERTS O N M ADISO NLEO N

HO USTO N

TRINITY

W ALKE R

G R IM ES

HO O D

CO M A NCHE

HAM ILTON

M ILLS

BRO W N

ERA TH

EAS TLAN D

CO RYELL

LAM PAS A S

BELL

M ILAM

BUR LESO N

BRA ZO STRA VIS

BUR NET

FO ARD

W ILBARG ER

BAY LO R

KNO X

CHILDRE SS

CO TTLE

KING

STO NEW A LL HAS K ELL

THR O CKM OR TO N

HAR DEM ANM O TLEYFLO YDHALELAM BBAILEY

CO CHRAN HO CKLEY LUBB O CK CRO SBY DICKE NS

KEN TG A RZALYNNTER RYYO AKUM

SHA CK E LF O RD

JO NE S

FISHE R

TAY LO R

CALLAH AN

NO LAN

G A IN ES DAW S O N BO RDEN SCU RRY

AND REW S M ARTIN

HO W ARD M ITC HELL

CO LEM ANRUN NELS

CO KE

STE RLING

IRIO N

TO M G R EEN

CO NCHO

M cC ULLO CH

G LA SSCO CK

M IDLAND

ECT O R

CRA NE UPT O N REA G AN

TER RELL

CRO CKET T

SAN S A BA

LLANOM ASO N

M ENAR DSCH LEICHER

SUT TO N

KIM BLE

BLAN CO

W ICHITA

W ILLIAM SO N

ELLIS

KAU FM AN

SO M E RVELL

VAN Z ANDT

CAS TRO

LEEW ASH IN G TO N

W ALLER

M O NTG O M ERY

HAY S

DELT A

G ILLES PIE

Previously planned projects New projects

Transmission Grid Enhancements Will Reduce Grid Congestion And Support Grid Reliability

99-03: DFW area increased imports by 2600 MW

00-03: 25GW of new generation capacity in ERCOT

Increased demand in DFW is being served by new generation located outside the Metroplex causing ~$100 million in congestion costs…

…TXU is undertaking an aggressive plan to enhance the grid and relieve the congestion…

TXU plans to spend $400 million in 04 and 05 on transmission systemupgrades across North Texas

TXU plans to spend $400 million in 04 and 05 on transmission systemupgrades across North Texas

1 2

3 4

Storm Restoration: Our Commitment to Customer Service

June 1, 2004 storm Worst storm in 100 year history of TXU (Category 1 hurricane winds) 500,000 lightning strikes across TXU Electric Delivery system More than 11,000 device outages affecting approximately 1.3 million

customers 90% of customer power restored within 60 hours

Enhanced customer service through remote and on demand meter reading without accessing premise

Technology will allow for automatic outage notification, power quality monitoring and real time customer access to consumption data

Enhanced customer service through remote and on demand meter reading without accessing premise

Technology will allow for automatic outage notification, power quality monitoring and real time customer access to consumption data

Automated Meter Reading Will Improve ProductivityAnd Safety

Load Control Transponder

DistributionSubstation

Voice Grade Communication

PowerLines

Substation Control Equipment

ServiceTo Home

Gas MeterWater Meter

Automated electric Meter

Client Workstation (PC)Mainframe

Communication FrontEnd Processors (FEPs)

Network Client Workstations (PCs)

IT Network Platform

Oracle

Billing/CIS Mainframe

SCADA, EMS, OMS,

etc

UTILITY ENTERPRISE NETWORK (WAN/LAN)

Distribution Automation Will Enhance Customer Service And Increase Operational Efficiency

Disruption occurs on delivery system causing an outage…

1 2

Operations Center gets notified of outage

DOC

Cell Tower

Switch & CellularModem

3 Dispatcher notifies field technician who has to inspect entire feeder; average restoration time of 30-45 minutes

3 Distribution automation technology immediately identifies location of disruption and reconfigures system to restore service to majority of customers, typically within minutes.

Old

Way

New Way

Where deployed, automation technology enhances customer serviceby reducing restoration time up to 80%

Where deployed, automation technology enhances customer serviceby reducing restoration time up to 80%

TXU Electric Delivery

5 6

7 8

These Initiatives Are Improving Electric Delivery’sFinancial Performance

9301,005

1,160

0.68

0.80

1.29

Operational EPS03-05; $ per share

EBITDA1

03-05; $ millions

25%25%

04E 05E03

90%90%

04E 05E03

1Results are from continuing operations excluding special items