1134016--3/7/2006--MIDWEST_GENERATION

related topics

{debt, indebtedness, cash}

{cost, regulation, environmental}

{operation, natural, condition}

{competitive, industry, competition}

Midwest Generation's operations are subject to market risks related to wholesale energy prices. Midwest Generation's financial results can be affected by changes in fuel prices, fuel transportation cost increases, and interruptions in fuel supply. Midwest Generation may not be able to hedge market risks effectively. Midwest Generation is exposed to credit and performance risk from third parties under supply and transportation contracts. Midwest Generation is subject to extensive energy industry regulation. Midwest Generation is subject to extensive environmental regulation and permitting requirements that may involve significant and increasing costs. Midwest Generation has a substantial amount of indebtedness, including long-term lease obligations. Midwest Generation's ability to meet its obligations under its long-term leases is dependent on payment of interest and principal on its notes receivable from EME. Competition could adversely affect Midwest Generation's business. Restrictions in the financing documents binding on Midwest Generation and its affiliates limit the ability of Midwest Generation to enter into specified transactions that it otherwise might enter into. The Illinois Plants may be affected by general operating risks and hazards customary to the power generation industry. Midwest Generation may not have adequate insurance to cover all these hazards.

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1134016--3/7/2006--MIDWEST_GENERATION_LLC