**EXHIBIT        99.1**

**REPORT        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

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**ELWOOD              ENERGY LLC**

**CONSOLIDATED              STATEMENTS OF INCOME AND COMPREHENSIVE              INCOME**

|                                                                               |   | **For                    the Years Ended September 30,**  |
|-------------------------------------------------------------------------------|--------|----------------------------------------------------------------|
| (thousands)                                                                   |   |  **2006**                                                 |   |  **2005** |   |  **2004** |   |
|                                                                          |   |                                                           |   |   |   |   |   |   |   |   |
| **Operating                    revenues**                                     |   |                                                           |   |   |   |   |   |   |   |   |
|    Electric                    sales                           |   | $                                                              | 103,115 |   | $ | 128,910 |   | $ | 95,427 |   |
|    Other                    revenues                           |   |                                                           | 97 |   |   | 95 |   |   | 102 |   |
| **                        Total revenues**                |   |                                                           | 103,212 |   |   | 129,005 |   |   | 95,529 |   |
|                                                                          |   |                                                           |   |   |   |   |   |   |   |   |
| **Operating                    expenses**                                     |   |                                                           |   |   |   |   |   |   |   |   |
|    Fuel                    - external                          |   |                                                           | 3,883 |   |   | 5,180 |   |   | 4,918 |   |
|    Fuel                    - affiliated                        |   |                                                           | 20,427 |   |   | 44,204 |   |   | 13,758 |   |
|    Depreciation                                                |   |                                                           | 11,673 |   |   | 16,124 |   |   | 14,869 |   |
|    Operations                    - external                    |   |                                                           | 2,040 |   |   | 2,160 |   |   | 2,618 |   |
|    Operations                    - affiliated                  |   |                                                           | 4,723 |   |   | 3,715 |   |   | 3,378 |   |
|    General                    and administrative - external    |   |                                                           | 334 |   |   | 395 |   |   | 402 |   |
|    General                    and administrative - affiliated  |   |                                                           | 296 |   |   | 166 |   |   | 176 |   |
|    Other                    taxes                              |   |                                                           | 427 |   |   | 418 |   |   | 410 |   |
|      **Total                    operating expenses** |   |                                                           | 43,803 |   |   | 72,362 |   |   | 40,529 |   |
|                                                                          |   |                                                           |   |   |   |   |   |   |   |   |
| **Income                    from operations**                                 |   |                                                           | 59,409 |   |   | 56,643 |   |   | 55,000 |   |
|                                                                          |   |                                                           |   |   |   |   |   |   |   |   |
| **Interest                    income (expense)**                              |   |                                                           |   |   |   |   |   |   |   |   |
|    Interest                    expense - external              |   |                                                           | (28,831 | ) |   | (30,301 | ) |   | (31,581 | ) |
|    Interest                    expense - affiliated            |   |                                                           | (16 | ) |   | (21 | ) |   | (5 | ) |
|    Interest                    income                          |   |                                                           | 1,454 |   |   | 710 |   |   | 114 |   |
| **Net                    interest expense**                                   |   |                                                           | (27,393 | ) |   | (29,612 | ) |   | (31,472 | ) |
|                                                                          |   |                                                           |   |   |   |   |   |   |   |   |
| **Net                    income**                                             |   |                                                           | 32,016 |   |   | 27,031 |   |   | 23,528 |   |
|                                                                          |   |                                                           |   |   |   |   |   |   |   |   |
| Other                    comprehensive income:                                |   |                                                           |   |   |   |   |   |   |   |   |
| Losses                    on hedging activities reclassified to net income    |   |                                                           | 921 |   |   | 937 |   |   | 939 |   |
| **Comprehensive                    income**                                   |   | $                                                              | 32,937 |   | $ | 27,968 |   | $ | 24,467 |   |

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**ELWOOD              ENERGY LLC**

**CONSOLIDATED              BALANCE SHEETS**

|  (thousands)                                                                                             |   |  **September                    30,****2006** |     |  **September                    30,****2005** |   |
|---------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|----------|----------------------------------------------------|--------|
|                                                                                                          |   |                                               |
| **ASSETS**                                                                                                    |   |                                               |     |                                               |   |   |   |
|                                                                                                          |   |                                               |     |                                               |   |   |   |
| **Current                    assets**                                                                         |   |                                               |     |                                               |   |   |   |
|    Cash                    and cash equivalents                                                |   | $                                                  | 661      |                                               | $      | 256 |   |
|    Restricted                    cash                                                          |   |                                               | 41,725   |                                               |   | 43,245 |   |
|    Accounts                    receivable                                                      |   |                                               | 14,711   |                                               |   | 24,735 |   |
|    Inventories                                                                                 |   |                                               | 638      |                                               |   | 462 |   |
|    Prepaid                    assets                                                           |   |                                               | 908      |                                               |   | 309 |   |
|      **Total                    current assets**                                     |   |                                               | 58,643   |                                               |   | 69,007 |   |
|                                                                                                          |   |                                               |     |                                               |   |   |   |
| **Property,                    plant and equipment**                                                          |   |                                               |     |                                               |   |   |   |
|    Plant                    and equipment                                                      |   |                                               | 537,329  |                                               |   | 535,800 |   |
|    Land                                                                                        |   |                                               | 1,591    |                                               |   | 3,765 |   |
|    Accumulated                    depreciation                                                 |   |                                               | (104,045 | )                                                  |   | (94,887 | ) |
| **       Total                    property, plant and equipment, net**     |   |                                               | 434,875  |                                               |   | 444,678 |   |
|                                                                                                          |   |                                               |     |                                               |   |   |   |
| **Deferred                    charges, net**                                                                  |   |                                               | 4,615    |                                               |   | 5,032 |   |
|                                                                                                          |   |                                               |     |                                               |   |   |   |
|      **Total                    assets**                                             |   | $                                                  | 498,133  |                                               | $      | 518,717 |   |
|                                                                                                          |   |                                               |     |                                               |   |   |   |
|                                                                                                          |   |                                               |     |                                               |   |   |   |
| **LIABILITIES                    AND MEMBERS’ CAPITAL**                                                 |   |                                               |     |                                               |   |   |   |
|                                                                                                          |   |                                               |     |                                               |   |   |   |
| **Current                    liabilities**                                                                    |   |                                               |     |                                               |   |   |   |
|    Current                    portion of long-term debt                                        |   | $                                                  | 18,649   |                                               | $      | 18,404 |   |
|    Accounts                    payable                                                         |   |                                               | 981      |                                               |   | 1,548 |   |
|    Payables                    to affiliated companies                                         |   |                                               | 2,504    |                                               |   | 13,389 |   |
| Notes                    payable to affiliates                                                                |   |                                               | 219      |                                               |   | - |   |
|    Accrued                    interest                                                         |   |                                               | 6,370    |                                               |   | 6,746 |   |
|    Other                    accrued expenses                                                   |   |                                               | 123      |                                               |   | 79 |   |
|    Deferred                    sales tax liability - current                                   |   |                                               | 801      |                                               |   | 793 |   |
| **     Total                    current liabilities**                                |   |                                               | 29,647   |                                               |   | 40,959 |   |
|                                                                                                          |   |                                               |     |                                               |   |   |   |
| **Long-term                    liabilities**                                                                  |   |                                               |     |                                               |   |   |   |
| Long-term                    debt                                                                             |   |                                               | 311,494  |                                               |   | 330,143 |   |
| Deferred                    sales tax liability - long-term                                                   |   |                                               | 10,587   |                                               |   | 11,357 |   |
| **     ****Total                    long-term liabilities**                          |   |                                               | 322,081  |                                               |   | 341,500 |   |
|                                                                                                          |   |                                               |     |                                               |   |   |   |
| **     Total                    liabilities**                                        |   |                                               | 351,728  |                                               |   | 382,459 |   |
|                                                                                                          |   |                                               |     |                                               |   |   |   |
| **Members’                    capital**                                                                 |   |                                               |     |                                               |   |   |   |
|    Members’                    capital                                                   |   |                                               | 156,492  |                                               |   | 147,266 |   |
|    Accumulated                    other comprehensive loss                                     |   |                                               | (10,087  | )                                                  |   | (11,008 | ) |
|      **Total                    members’ capital**                             |   |                                               | 146,405  |                                               |   | 136,258 |   |
|                                                                                                          |   |                                               |     |                                               |   |   |   |
| **       Total                    liabilities and members’ capital** |   | $                                                  | 498,133  |                                               | $      | 518,717 |   |

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**ELWOOD              ENERGY LLC**

**CONSOLIDATED              STATEMENTS OF CASH FLOWS**

|                                                                                                             |   | **For                    the Years Ended September 30,** |
|------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|
| (thousands)                                                                                                      |   |  **2006**                                           |   |  **2005** |   |  **2004** |   |
|                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |
| **Operating                    Activities:**                                                                     |   |                                                     |   |   |   |   |   |   |   |   |
| Net                    income                                                                                    |   | $                                                        | 32,016 |   | $ | 27,031 |   | $ | 23,528 |   |
| Adjustments                    to reconcile net income to net cash from operating                    activities: |   |                                                     |   |   |   |   |   |   |   |   |
|   Depreciation                    and amortization                                                     |   |                                                     | 12,090 |   |   | 16,548 |   |   | 15,295 |   |
|   Losses                    on hedging activities reclassified to net income                           |   |                                                     | 921 |   |   | 937 |   |   | 939 |   |
|   Other                    adjustments for non-cash items                                              |   |                                                     |  |   |   | (39 | ) |   | 600 |   |
|   Changes                    in current assets and liabilities:                                        |   |                                                     |   |   |   |   |   |   |   |   |
|     Accounts                    receivable                                                   |   |                                                     | 10,024 |   |   | (8,424 | ) |   | (1,163 | ) |
|     Other                    current assets                                                  |   |                                                     | (774 | ) |   | 307 |   |   | (344 | ) |
|     Accounts                    payable                                                      |   |                                                     | (567 | ) |   | 576 |   |   | 28 |   |
|     Payables                    to affiliated companies                                      |   |                                                     | (10,885 | ) |   | 7,130 |   |   | 1,934 |   |
|     Other                    accrued expenses                                                |   |                                                     | (332 | ) |   | (452 | ) |   | (772 | ) |
|     Deferred                    sales tax liability                                          |   |                                                     | (762 | ) |   | (778 | ) |   | (769 | ) |
|       **Net                    cash provided by operating activities**             |   |                                                     | 41,731 |   |   | 42,836 |   |   | 39,276 |   |
|                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |
| **Investing                    Activities:**                                                                     |   |                                                     |   |   |   |   |   |   |   |   |
|   Property                    additions                                                                |   |                                                     | (4,045 | ) |   | (28 | ) |   | (37 | ) |
|   Temporary                    investment of restricted cash funds, net                                |   |                                                     | 1,520 |   |   | (4,292 | ) |   | 93 |   |
|       **Net                    cash provided by (used in) investing activities**   |   |                                                     | (2,525 | ) |   | (4,320 | ) |   | 56 |   |
|                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |
| **Financing                    Activities:**                                                                     |   |                                                     |   |   |   |   |   |   |   |   |
|   Dividends                    paid                                                                    |   |                                                     | (20,616 | ) |   | (22,316 | ) |   | (24,259 | ) |
|   Payment                    of long-term debt                                                         |   |                                                     | (18,404 | ) |   | (16,771 | ) |   | (14,741 | ) |
|                      Issuance of affiliated notes payable                                                   |   |                                                     | 219 |   |   | - |   |   | - |   |
|       **Net                    cash used in financing activities**                 |   |                                                     | (38,801 | ) |   | (39,087 | ) |   | (39,000 | ) |
|                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |
|       **Increase                    (decrease) in cash and cash equivalents**      |   |                                                     | 405 |   |   | (571 | ) |   | 332 |   |
|       Cash                    and cash equivalents at beginning of period          |   |                                                     | 256 |   |   | 827 |   |   | 495 |   |
|       Cash                    and cash equivalents at end of period                |   | $                                                        | 661 |   | $ | 256 |   | $ | 827 |   |
|                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |
|                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |
| **Supplemental                    Cash Flow Information:**                                                       |   |                                                     |   |   |   |   |   |   |   |   |
| Cash                    paid during the year for:                                                                |   |                                                     |   |   |   |   |   |   |   |   |
|     Affiliated                    interest                                                   |   | $                                                        | 16 |   | $ | 21 |   | $ | 2 |   |
|     External                    interest                                                     |   |                                                     | 27,867 |   |   | 29,282 |   |   | 30,517 |   |
| Noncash                    transactions from investing and financing activities:                                 |   |                                                     | - |   |   |   |   |   |   |   |
|     Exchange                    of assets for accrued long-term liability                    |   |                                                     |   |   |   | - |   |   | 2,800 |   |
|                        Noncash dividend of land to members                                        |   |                                                     | 2,174 |   |   | - |   |   | - |   |
|                                                                                                             |   |                                                     |   |   |   |   |   |   |   |   |

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**ELWOOD              ENERGY LLC**

**CONSOLIDATED              STATEMENTS OF MEMBERS’ CAPITAL**

|  (thousands)                                   |   |  **Total** |        |  **Dominion****Elwood,                    Inc.** |   |  **Peoples****Elwood,                    LLC** |   |
|-----------------------------------------------------|--------|-----------------|-------------|-------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                |   |            |        |                                                  |   |                                                |   |   |   |   |
| **Balance                    - September 30, 2003** |   | **$**           | **130,398** |                                                  | **$**  | **65,199**                                          |   | **$** | **65,199** |   |
|                                                |   |            |        |                                                  |   |                                                |   |   |   |   |
| Dividends                                           |   |            | (24,259     | )                                                     |   | (12,129                                             | )      |   | (12,130 | ) |
| Comprehensive                    income:            |   |            |        |                                                  |   |                                                |   |   |   |   |
| Net                    income                       |   |            | 23,528      |                                                  |   | 11,764                                              |   |   | 11,764 |   |
| Other                    comprehensive income       |   |            | 939         |                                                  |   | 469                                                 |   |   | 470 |   |
| **Balance                    - September 30, 2004** |   | **$**           | **130,606** |                                                  | **$**  | **65,303**                                          |   | **$** | **65,303** |   |
|                                                |   |            |        |                                                  |   |                                                |   |   |   |   |
| Dividends                                           |   |            | (22,316     | )                                                     |   | (11,158                                             | )      |   | (11,158 | ) |
| Comprehensive                    income:            |   |            |        |                                                  |   |                                                |   |   |   |   |
| Net                    income                       |   |            | 27,031      |                                                  |   | 13,515                                              |   |   | 13,516 |   |
| Other                    comprehensive income       |   |            | 937         |                                                  |   | 469                                                 |   |   | 468 |   |
| **Balance                    - September 30, 2005** |   | **$**           | **136,258** |                                                  | **$**  | **68,129**                                          |   | **$** | **68,129** |   |
|                                                |   |            |        |                                                  |   |                                                |   |   |   |   |
| Dividends                                           |   |            | (22,790     | )                                                     |   | (11,395                                             | )      |   | (11,395 | ) |
| Comprehensive                    income:            |   |            |        |                                                  |   |                                                |   |   |   |   |
| Net                    income                       |   |            | 32,016      |                                                  |   | 16,008                                              |   |   | 16,008 |   |
| Other                    comprehensive income       |   |            | 921         |                                                  |   | 460                                                 |   |   | 461 |   |
| **Balance                    - September 30, 2006** |   | **$**           | **146,405** |                                                  | **$**  | **73,202**                                          |   | **$** | **73,203** |   |
|                                                |   |            |        |                                                  |   |                                                |   |   |   |   |

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**ELWOOD              ENERGY LLC**

**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note        1 - Nature of Operations**

**Note        2 - Summary of Significant Accounting Policies**

***General***

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**ELWOOD              ENERGY LLC**

**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS              (Continued)**

***Cash        and Restricted Cash***

*One        Group Institutional Prime Money Market Fund.*

***Inventory***

***Property,        Plant & Equipment***

***Deferred        Charges***

***Income        Taxes***

***Revenue        Recognition***

*Revenue        Recognition of Long-Term Power Sales Contracts. *

***Derivatives***

*Accounting        for Derivative Instruments and Hedging Activities, *

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**ELWOOD          ENERGY LLC**

**NOTES          TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**Note        3 - Related Parties**

|                                                                                                                       |   | **For                  the Years Ended****September                  30,** |
|----------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|
|                                                                                                                       |   |  **2006**                                                             |   |  **2005** |   |  **2004** |   |
|                                                                                                                       |   | (in                  thousands)                                       |
| Costs                  incurred with DELCO for the quarterly maintenance fee related to the                  GE CSA   |   | $                                                                          | 328 |   | $ | 318 |   | $ | 306 |   |
| Costs                  incurred with DEI for participation in spare parts pool related to                  the GE CSA |   |                                                                       | 658 |   |   | 658 |   |   | 658 |   |

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**ELWOOD              ENERGY LLC**

**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS              (Continued)**

**Note        4 - Sale of Partnership Interest**

**Note        5 - Long-Term Debt and Working Capital Credit Facility **

**Note        6 - Derivatives and Hedge Accounting **

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**ELWOOD              ENERGY LLC**

**NOTES              TO CONSOLIDATED FINANCIAL STATEMENTS              (Continued)**

**Note        7 - Fair Value of Financial Instruments **

**Note        8 - Property, Plant and Equipment**

| At                  September 30,                    |   |  2006 |    |  2005 |   |
|------------------------------------------------------|--------|------------|---------|------------|--------|
| (thousands)                                          |   |       |    |       |   |   |   |
| Plant                                                |   | $          | 536,024 |       | $      | 534,488 |   |
| Other                  Property and Equipment        |   |       | 1,305   |       |   | 1,312 |   |
| Total                  property, plant and equipment |   | $          | 537,329 |       | $      | 535,800 |   |

**Note        9 -**
** **
**Quarterly        Financial Data (unaudited) **

|                                            |   |  **2006** |    |  **2005** |   |
|-------------------------------------------------|--------|----------------|---------|----------------|--------|
| (thousands)                                     |   |           |
|                                            |   |           |    |           |   |   |   |
| **Operating                  revenues**         |   |           |    |           |   |   |   |
| First                  Quarter                  |   | $              | 12,775  |           | $      | 8,640 |   |
| Second                  Quarter                 |   |           | 9,116   |           |   | 9,816 |   |
| Third                  Quarter                  |   |           | 18,384  |           |   | 28,476 |   |
| Fourth                  Quarter                 |   |           | 62,937  |           |   | 82,073 |   |
| Year                                            |   | $              | 103,212 |           | $      | 129,005 |   |
| **Income                  from operations**     |   |           |    |           |   |   |   |
| First                  Quarter                  |   | $              | 6,067   |           | $      | 5,508 |   |
| Second                  Quarter                 |   |           | 4,555   |           |   | 4,897 |   |
| Third                  Quarter                  |   |           | 11,875  |           |   | 12,072 |   |
| Fourth                  Quarter                 |   |           | 36,912  |           |   | 34,166 |   |
| Year                                            |   | $              | 59,409  |           | $      | 56,643 |   |
| **Net                  income (loss)**          |   |           |    |           |   |   |   |
| First                  Quarter                  |   | $              | (940    | )              | $      | (2,129 | ) |
| Second                  Quarter                 |   |           | (2,333  | )              |   | (2,510 | ) |
| Third                  Quarter                  |   |           | 5,135   |           |   | 4,775 |   |
| Fourth                  Quarter                 |   |           | 30,154  |           |   | 26,895 |   |
| Year                                            |   | $              | 32,016  |           | $      | 27,031 |   |
| **Other                  comprehensive income** |   |           |    |           |   |   |   |
| First                  Quarter                  |   | $              | 240     |           | $      | 242 |   |
| Second                  Quarter                 |   |           | 223     |           |   | 227 |   |
| Third                  Quarter                  |   |           | 230     |           |   | 234 |   |
| Fourth                  Quarter                 |   |           | 228     |           |   | 234 |   |
| Year                                            |   | $              | 921     |           | $      | 937 |   |
|                                            |   |           |    |           |   |   |   |

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**ELWOOD          ENERGY LLC**

**NOTES          TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

**Note        10 - Commitments and Contingencies**

**Note        11 - Concentration of Credit Risk**

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