930835--2/27/2008--EDISON_MISSION

related topics

{gas, price, oil}

{cost, regulation, environmental}

{debt, indebtedness, cash}

{loss, insurance, financial}

{competitive, industry, competition}

{acquisition, growth, future}

EME has substantial interests in merchant energy power plants which are subject to market risks related to wholesale energy prices. EME's financial results can be affected by changes in fuel prices, fuel transportation cost increases, and interruptions in fuel supply. EME may not be able to hedge market risks effectively. EME is exposed to credit and performance risk from third parties under supply and transportation contracts. EME is subject to extensive energy industry regulation. EME is subject to extensive environmental regulation and permitting requirements that may involve significant and increasing costs. EME's development projects or future acquisitions may not be successful. A substantial portion of wind turbines purchased by EME may not perform as expected during start-up or operations, thereby adversely affecting the expected return on investment. Competition could adversely affect EME's business. EME may not be able to raise capital on favorable terms, to refinance its or its subsidiaries' existing indebtedness, or to fund operations, capital expenditures, and future acquisitions and development activities, which could adversely affect its results of operations. EME and its subsidiaries have a substantial amount of indebtedness, including long-term lease obligations. Restrictions in the instruments governing EME's indebtedness and the indebtedness of its subsidiaries limit EME's and its subsidiaries' ability to enter into specified transactions that EME or they otherwise may enter into. EME's projects may be affected by general operating risks and hazards customary in the power generation industry. EME may not have adequate insurance to cover all these hazards. The accounting for EME's hedging and proprietary trading activities may increase the volatility of its quarterly and annual financial results.

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930835--2/27/2008--EDISON_MISSION_ENERGY