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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002

Commission File Number 333-59348

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MIDWEST GENERATION, LLC(Exact name of registrant as specified in its charter)

|Delaware(State or other jurisdiction of incorporation
or organization)                                             |  | 33-0868558(I.R.S. Employer Identification No.)           
|------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------------------
|One Financial Place
440 South LaSalle Street, Suite 3500
Chicago, Illinois(Address of principal executive offices) |  | 60605(Zip Code)                                          
|Registrant's telephone number, including area code:(312) 583-6000                                                 
|Securities registered pursuant to Section 12(b) of the Act:                                                       
|None(Title of Class)                                                                                               |  | Not Applicable(name of each exchange on which registered)

Securities
registered pursuant to Section 12(g) of the Act:

8.30% Series A Pass-Through Certificates due 2009
8.56% Series B Pass-Through Certificates due 2016(Title of Class)

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Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. YES ý NO o

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. o

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the
Act). YES o NO ý

Aggregate
market value of the registrant's common equity held by non-affiliates of the registrant as of June 28, 2002: $0. Number of units outstanding of the
registrant's Membership Interests as of March 27, 2003: 100 units (all units held by an affiliate of the registrant).

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TABLE OF CONTENTS

|         |  |                                                                                       |  | Page
|-------- |  | ------------------------------------------------------------------------------------- |  | ----
|PART I  
|Item 1.  |  | Business                                                                              |  | 1   
|Item 2.  |  | Properties                                                                            |  | 21  
|Item 3.  |  | Legal Proceedings                                                                     |  | 23  
|Item 4.  |  | Submission of Matters to a Vote of Security Holders                                   |  | 23  
|PART II 
|Item 5.  |  | Market for Registrant's Common Equity and Related Stockholder Matters                 |  | 23  
|Item 6.  |  | Selected Financial Data                                                               |  | 24  
|Item 7.  |  | Management's Discussion and Analysis of Results of Operations and Financial Condition |  | 25  
|Item 7a. |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 58  
|Item 8.  |  | Financial Statements and Supplementary Data                                           |  | 59  
|Item 9.  |  | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  |  | 59  
|PART III
|Item 10. |  | Managers and Executive Officers of the Registrant                                     |  | 92  
|Item 11. |  | Executive Compensation                                                                |  | 93  
|Item 12. |  | Security Ownership of Certain Beneficial Owners and Management                        |  | 93  
|Item 13. |  | Certain Relationships and Related Transactions                                        |  | 93  
|Item 14. |  | Controls and Procedures                                                               |  | 93  
|PART IV 
|Item 15. |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                       |  | 95  
|         |  | Signatures                                                                            |  | 104 
|         |  | Certifications                                                                        |  | 105 

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PART I

ITEM 1. BUSINESS

The Company

Midwest Generation, LLC, which is referred to as Midwest Generation in this annual report, was formed on July 12, 1999 as a special-purpose Delaware
limited liability company with Edison Mission Midwest Holdings Co. as the sole owner. Edison Mission Midwest Holdings is a wholly owned subsidiary of Midwest Generation EME, LLC, which is in turn a
wholly owned subsidiary of Edison Mission Energy, which is referred to as EME in this annual report. EME is a wholly owned subsidiary of Mission Energy Holding Company, which is referred to as MEHC in
this annual report, and is an indirect wholly owned subsidiary of Edison International. Midwest Generation was formed for the purpose of owning or leasing, making improvements to and operating the
power generation assets it purchased from Commonwealth Edison, which are referred to as the Illinois Plants. Midwest Generation acquired these power generation assets on December 15, 1999 for a
purchase price of approximately $4.9 billion, with adjustments for changes in the book value of inventories and pro-rations related to specific items, including but not limited to
taxes, rents and fees. Prior to the acquisition of these power generation assets, Midwest Generation had no significant business activity.

Concurrent
with the acquisition, Midwest Generation assigned its right to purchase the Collins Station, a 2,698 megawatt (MW) gas and oil-fired generating station located in
Illinois, to four third-party entities. After this assignment, and the purchase of the facility by the third parties, an affiliate of Midwest Generation leased and Midwest Generation subleased the
Collins Station. Each of the leases and subleases has an initial term of 33.75 years. These subleases have been accounted for as a lease financing for accounting purposes.

As
of December 31, 2002, Midwest Generation had $5.6 billion of debt and lease financings, including $911 million of debt maturing in December 2003, as
described in Notes 5 and 10 to the financial statements included in Part II to this annual report on Form 10-K. Midwest Generation's debt obligations to Edison Mission
Overseas Co. are on terms matching those of a credit agreement between Edison Mission Midwest Holdings and commercial lenders. Midwest Generation is a guarantor of Edison Mission Midwest Holdings'
obligations, which include $911 million of debt maturing in December 2003 that will need to be repaid, extended or refinanced. Edison Mission Midwest Holdings is not expected to have
sufficient cash to repay the $911 million debt due in December 2003, and there is no assurance that it will be able to extend or refinance this debt obligation on similar terms and rates
as the existing debt, on commercially reasonable terms, on the terms permitted under the financing documents entered into by MEHC in July 2001 or at all. Midwest Generation's independent
accountants' audit opinion for the year ended December 31, 2002 contains an explanatory paragraph that indicates the financial statements included in Part II of this annual report have
been prepared on the basis that Midwest Generation will continue as a going concern and that the uncertainty about Edison Mission Midwest Holdings' ability to repay, extend or refinance its obligation
raises substantial doubt about Midwest Generation's ability to continue as a going concern. Accordingly, the financial statements do not include any adjustments that might result from the resolution
of this uncertainty. See "Liquidity and Capital Resources" and "Risk Factors" in "Item 7. Management's Discussion and Analysis of Results of Operations and Financial
Condition."

Midwest
Generation currently owns or leases approximately 9,287 MW as a result of the acquisition, consisting of the following:



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In
connection with the acquisition of these power generation assets, Midwest Generation entered into three five-year power purchase agreements for the coal-fired
stations, the Collins Station and the peaker stations with Commonwealth Edison. Subsequently, Commonwealth Edison assigned its rights and obligations under these power purchase agreements to Exelon
Generation. For the past three years, Midwest Generation derived the substantial majority of its revenue from the sale of energy and capacity to Exelon Generation under these power purchase
agreements. As permitted by the power purchase agreements, Exelon Generation has released 4,548 MW of Midwest Generation's coal-fired, Collins and peaker stations from the power purchase
agreements for 2003, thereby increasing the amount of Midwest Generation's energy and capacity to be sold into the wholesale market. Midwest
Generation has entered into a contract with a marketing affiliate to market energy that is to be sold into the wholesale market, to engage in hedging activities, and to provide scheduling and other
services. The marketing affiliate also purchases fuel, other than coal, and enters into fuel hedging arrangements on Midwest Generation's behalf.

In
August 2000, Midwest Generation completed a sale-leaseback transaction with respect to the Powerton and Joliet power facilities to third-party lessors for an
aggregate purchase price of $1.367 billion. In connection with this transaction, Midwest Generation facilitated the issuance of $333.5 million 8.30% Series A
Pass-Through Certificates and $813.5 million 8.56% Series B Pass-Through Certificates through a private placement. In 2001, these certificates were subsequently
exchanged for certificates that were registered with the Securities and Exchange Commission, and identical in all material respects to the privately held certificates, pursuant to an exchange offer.

EME,
MEHC and Edison International are each registered with the Securities and Exchange Commission and have financial statements that are filed in accordance with rules enacted by the
Securities and Exchange Commission. For more information regarding each of these companies, see their respective Form 10-K for the year ended December 31, 2002.

Midwest
Generation's principal executive offices are located at One Financial Place, 440 South LaSalle Street, Suite 3500, Chicago, Illinois 60605, and its telephone number is
(312) 583-6000.

Forward-Looking Statements

This annual report on Form 10-K contains forward-looking statements that reflect Midwest Generation's current expectations and projections
about future events based on Midwest Generation's knowledge of present facts and circumstances and assumptions about future events. Other information distributed by Midwest Generation that is
incorporated in this annual report, or that refers to or incorporates this annual report, may also contain forward-looking statements. In this annual report and elsewhere, the words "expects,"
"believes," "anticipates," "estimates," "intends," "plans," "probable" and variations of such words and similar expressions are intended to identify forward-looking statements. Such statements
necessarily involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Some of the risks, uncertainties and other important factors that could cause
results to differ, or that otherwise could impact Midwest Generation, are:



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Additional
information about the risk factors listed above and other risks and uncertainties is contained throughout this annual report and in the Notes to Financial Statements and
Management's Discussion and Analysis of Results of Operations and Financial Condition that appear in Part II of this annual report. Readers are urged to read this entire annual report and
carefully consider the risks, uncertainties and other factors that affect Midwest Generation's business. The information contained in this annual report is subject to change without notice, and
Midwest Generation is not obligated to publicly update or revise forward-looking statements. Readers should review future reports filed by Midwest Generation with the Securities and Exchange
Commission.

Description of Business

Industry Overview

Until the enactment of the Public Utility Regulatory Policies Act of 1978, utilities and government-owned power agencies were the only producers of bulk electric
power intended for sale to third parties in the United States. The Public Utility Regulatory Policies Act encouraged the development of independent power by removing regulatory constraints relating to
the production and sale of electric energy by certain non-utilities and requiring electric utilities to buy electricity from certain types of non-utility power producers, known
as qualifying facilities, under certain conditions. The passage of the Energy Policy Act of 1992 further encouraged the development of independent power by significantly expanding the options
available to independent power producers with respect to their regulatory status and by liberalizing transmission access. As a result, a significant market for electric power produced by independent
power producers, such as Midwest Generation, developed in the United States.

Beginning
in the mid-1990s, industry restructuring and opening of retail markets to competition in several states led some utilities to divest generating assets, which
created new opportunities for growth of independent power in the United States. In those jurisdictions that have deregulated retail markets, industry trends and regulatory initiatives resulted in a
new set of market relationships in which independent generators and marketers compete with incumbent distribution utilities for sales to end-users on the basis of price, reliability and
other factors. As a result of the 2000-2001 California power crisis and related volatility in wholesale markets, some states have either discontinued or delayed implementation of
initiatives involving deregulation and some utilities have delayed or cancelled plans to divest their generating assets. These developments have generally not affected the progress of industry
restructuring in Illinois, where Midwest Generation's power plants are located. However, as discussed further below, competition, regulatory uncertainty and lower energy prices have adversely affected
independent power producers, including Midwest Generation. See "Item 7. Management's Discussion and Analysis of Results of Operations and Financial ConditionCurrent Developments."

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Facilities Overview

The Collins Station

The Collins Station is a 2,698 MW gas and oil-fired power plant located in Grundy County, near Morris, Illinois. The plant was built in 1977 and
occupies approximately 3,723 acres, inclusive of a portion of Heideke Lake, the station's cooling lake. Collins Station contains five dual-fueled boilers originally fired using
No. 6 fuel oil, but now capable of burning natural gas or oil. This dual fuel capacity gives Collins Station flexibility to switch between natural gas and fuel oil. Beginning in
January 2003, operations at Units 4 and 5 were suspended until market conditions improve. See "Current Developments" and "Market Risk Exposures" in the "Management's Discussion and Analysis of
Results of Operations and Financial Condition" section for additional discussion of the market conditions leading up to the decision to suspend operations at Units 4 and 5.

Natural
gas is procured in the monthly and daily spot markets, shipped at the seller's risk to Chicago, and then delivered to Collins Station by Nicor Gas Company under a delivery
contract that runs through 2003. Nicor Gas Company manages storage inventory and purchases gas for Midwest Generation under an agency agreement that runs concurrently with the delivery contract.

The Crawford Station

The Crawford Station is a 542 MW coal-fired power plant located in Cook County, Illinois, and is within the city limits of Chicago. The original plant
was built in 1925 and occupies approximately 72 acres, inclusive of the switchyard. The original generating units have been retired. Units 7 and 8 began operations in 1958 and 1961, respectively.

Southern
Powder River Basin coal is loaded into barges at the Will County Station and delivered by barge via the Chicago Sanitary and Ship Canal to Crawford Station. Natural gas is used
for ignition and combustion support and for full boiler operation, when desired and economical. Peoples Gas delivers natural gas under a delivery contract that includes balancing storage, which is
also shared by Fisk Station.

The Fisk Station

The Fisk Station is a 326 MW coal-fired power plant located in Cook County, Illinois, and is within the city limits of Chicago. The plant is located
on approximately 44 acres, inclusive of the switchyard. The operating unit is referred to as Unit 19 and began operations in 1959.

Southern
Powder River Basin coal is loaded into barges at the Will County Station, delivered by barge on a "just-in-time" basis. There are no river locks and dams
to prevent the timely delivery of coal.
Natural gas is used for ignition and combustion support and for full boiler operation, when desired and economical. Peoples Gas delivers natural gas under a delivery contract that includes balancing
storage, which is shared by the Crawford Station.

The Joliet Station

The Joliet Station is located in Joliet, Will County, Illinois, approximately 40 miles southwest of Chicago on a combined approximately 467 acre site on the Des
Plaines River near Interstate 80. The operating generating units are referred to as Units 6, 7 and 8. Only Units 7 and 8 are subject to the leveraged lease transactions described in this annual
report. The operation of Units 6, 7 and 8 began in 1959, 1965 and 1966, respectively. Joliet Unit 6 is a 314 MW coal-fired unit located adjacent to, but across the river from, Joliet Units
7 and 8. Joliet Units 7 and 8 are coal-fired and have a combined capacity of 1,044 MW.

4

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The
Joliet Station burns Southern Powder River Basin coal which is received by unit trains delivered by the Chicago, Central, and Pacific Railroad Company from interchange points with
the Union Pacific or Burlington Northern Santa Fe Railroads. With the completion of a new rail spur, in early 2003, direct deliveries from the Union Pacific Railroad will commence. Natural gas is
delivered for the boilers as a startup and stabilizing fuel by Nicor Gas Company under a delivery contract.

The Powerton Station

The Powerton Station is a 1,538 MW coal-fired station located in Pekin, Tazwell County, Illinois, approximately 16 miles southwest of Peoria or 166
miles from Chicago on an approximately 568 acre site on the Illinois River near Illinois Route 29. The site also includes an approximately 1,440 acre lake. The operating units are referred to as Units
5 and 6 and began operations in 1972 and 1975, respectively.

The
Powerton Station currently burns Southern Powder River Basin coal which is received by unit trains delivered by the Illinois and Midland Railroad Company from interchange points with
the Union Pacific Railroad.

The Waukegan Station

The Waukegan Station is a 789 MW coal-fired power plant located in Waukegan, Lake County, Illinois, on Lake Michigan. The plant occupies approximately
194 acres, inclusive of the switchyard. The operating units are referred to as Units 6, 7 and 8 and began operations in 1952, 1958 and 1962, respectively.

Unit
6 utilizes oil for ignition and startup, while Unit 7 utilizes oil or natural gas and Unit 8 utilizes natural gas for ignition and startup. The station burns Southern Powder River
Basin coal which is received by unit trains delivered by the Union Pacific Railroad.

The Will County Station

The Will County Station is a 1,092 MW coal-fired power plant located in Romeoville, Will County, Illinois. The station is located on approximately 215
acres, inclusive of the switchyard and other coal-fired boilers. Units 1, 2, 3 and 4 began operations between 1955 and 1963. Beginning in January 2003, operations at Units 1 and 2
were suspended until market conditions improve. See "Current Developments" and "Market Risk Exposures" in the "Management's Discussion and Analysis of Results of Operations and Financial Condition"
section for additional discussion of the market conditions leading up to the decision to suspend operations at Units 1 and 2.

The
Will County Station burns Southern Powder River Basin coal which is delivered in unit trains by the Elgin, Joliet & Eastern Railway Company from interchange points with the
Union Pacific. Will County uses No. 2 fuel oil for ignition and combustion support, which is delivered by tanker truck to a 100,000 gallon storage tank. Will County has no natural gas service.

On-Site and Off-Site Peaking Facilities

The on-site peaking units consist of four peaking facilities: Crawford, Fisk, Waukegan and Joliet. The on-site peaking units were
commissioned in 1968, except for Joliet, which was commissioned in 1969.

The
off-site peaking units consist of five peaking facilities: Calumet, Bloom, Electric Junction, Lombard and Sabrooke. The off-site peaking units were
commissioned in 1969, except for Electric Junction, which was commissioned in 1970.

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Both
the on-site peaking units and the off-site peaking units burn either No. 2 fuel oil, No. 1 fuel oil (jet fuel) or natural gas. Natural gas is
purchased in the monthly and daily spot markets and is shipped at the seller's risk to Chicago. Peoples Gas provides delivery services, including balancing storage, to the site under tariffs approved
by the Illinois Commerce Commission.

Midwest
Generation purchases No. 1 fuel oil and No. 2 fuel oil from bids taken annually. Shipments to the site are in tanker trucks and inventory is replenished as needed
by the site. The oil price is tied to the Oil Price Information Service posted price (the market price) on the date of delivery. Truck delivery charges are at fixed agreed-upon prices.

Power Markets

For the past three years, Midwest Generation has derived substantially all of its revenue from the sale of energy and capacity to Exelon Generation under power
purchase agreements. Midwest Generation's energy and capacity that are not purchased under power purchase agreements are generally sold at market prices to neighboring utilities, third-party
electricity retailers and power marketers through a marketing affiliate.

While
an independent system operator does not yet oversee operations of the Commonwealth Edison control area, a number of other utilities in the region participate in the Midwest
Independent System Operator, a Regional Transmission Organization authorized pursuant to FERC Order No. 2000, and a bilateral market is already present. The regional market is supported by open
access transmission under various utility company transmission tariffs, the Midwest Independent System Operator Tariff, as well as retail access electricity tariffs currently available to end use
customers in many states, including Illinois and Ohio. Open access transmission tariffs and retail access tariffs allow companies which do not own transmission and distribution systems to utilize the
transmission and distribution systems of others to sell power at wholesale and retail on a non-discriminatory basis relative to the system owners. Such tariffs are vital to allow
companies, such as Midwest Generation, which own or control generation but not transmission and distribution systems, to compete in the deregulated electricity markets. These documents provide a
uniform set of standards that have been approved by regulatory agencies and are publicly available. Both Commonwealth Edison and American Electric Power are seeking to have their control areas placed
under the operation of PJM Interconnection, LLC, which is commonly known as PJM, and, if they are successful, will be subject to the PJM Tariff and Market Rules. PJM is a prominent independent system
operator providing system operations and market settlement throughout the Mid-Atlantic States. Consequently, Midwest Generation's plant operations and future power sales may conform to
future PJM requirements. Some of Midwest Generation's coal units may have a portion of their revenue derived from forward sales to regional utilities and power marketers. The remainder of the
available coal-fired generation output, together with available output from the Collins Station and the peaking units, may be sold on a spot basis. See "Regulatory
MattersMidwest Deregulation StatusIndependent System Operator/Regional Transmission Organization" for further discussion on developing electricity markets.

During
2003, the primary markets available to Midwest Generation for wholesale sales of electricity are expected to be "wholesale customer" and
"over-the-counter." Wholesale customer transactions are bilateral sales for resale to regional buyers, including investor-owned utilities, municipal utilities, rural electric
cooperatives and retail energy suppliers. Wholesale customer transactions include real-time, daily and longer term structured sales; they are not arranged through brokers and may be
tailored to meet the specific requirements of wholesale electricity consumers. Over-the-counter markets are generally accessed through third-party brokers and electronic
exchanges, and include forward sales of electricity. The most liquid over-the-counter markets in the Midwest region are "Into Cinergy," and, to a lesser extent, "Into ComEd."
Liquidity in the over-the-counter markets is lower than it has been in prior years as a consequence of the decision by many trading entities to discontinue operations and the
financial problems of others resulting in far fewer creditworthy participants in these electricity markets.

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"Into
Cinergy" and "Into ComEd" are bilateral markets for the sale or purchase of electrical energy for future delivery. The emergence of "Into Cinergy," and "Into ComEd" as commercial
hubs for the trading of physical power has not only facilitated transparency of wholesale power prices in these markets but also provides liquidity required to support risk management strategies
utilized to mitigate exposure to electricity price volatility. Energy is traded in the form of physically delivered megawatt-hours. Delivery is either made (1) into the receiving control area's
transmission system (i.e., Cinergy's or ComEd's transmission system) by the seller's daily election of control area interface, or (2) by procuring energy generated from a source within the
receiving control area. Almost all of Midwest Generation's plants are capable of meeting the current "Into ComEd" delivery criteria. Performance of transactions in these markets is subject to
contracts that generally provide for liquidated damages supported by a variety of credit requirements, which may include independent credit assessment, parental guarantees, letters of credit and cash
margining arrangements. As noted, however, liquidity in all of these markets has been adversely affected by recent financial problems among trading and marketing entities.

For
a discussion of the risks related to Midwest Generation's sale of electricity, see "Item 7. Management's Discussion and Analysis of Results of Operations and Financial
ConditionMarket Risk Exposures."

Power Purchase Agreements

On December 15, 1999, Midwest Generation entered into three separate five-year power purchase agreements with Commonwealth Edison that expire
on December 31, 2004. In January 2001, Commonwealth Edison assigned these agreements to Exelon Generation. Under these agreements, Midwest Generation has agreed to make the capacity of
its power generation stations available to Exelon Generation. These agreements allow Midwest Generation to sell any excess electric energy, including energy not dispatched by Exelon Generation, to
other purchasers under specified conditions. Payments under these power purchase agreements constituted approximately 99% of Midwest Generation's energy and capacity revenues during all three years
ended December 31, 2002, 2001 and 2000, with the balance coming from third-party sales of electric energy. As discussed in detail below, Exelon Generation has released 4,548 MW of Midwest
Generation's generating capacity from the
power purchase agreements for 2003. 4,739 MW of Midwest Generation's generating capacity remains subject to power purchase agreements with Exelon Generation.



Under this agreement, Exelon Generation purchases capacity and thus has the right to take from Midwest Generation energy generated by the coal-fired
stations. The agreement provides for capacity payments for the units under contract, whether or not energy is generated, and for energy payments for energy generated by Midwest Generation and taken by
Exelon Generation. The capacity payments provide Midwest Generation revenue for fixed charges such as debt service, labor and insurance, and the energy payment compensates Midwest Generation for
variable costs of actual electricity production. Exelon Generation also compensates Midwest Generation for the cost of startups, shutdowns and some low-load operations, which are not
covered by the normal energy charge rate. Midwest Generation, for its part, supplies ancillary services with respect to such units. If Exelon Generation does not request all available energy from the
units under contract, Midwest Generation may sell the excess energy to third parties, subject to several conditions.

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The agreement identifies the units that are contracted to Exelon Generation and for each contract year denominates them either as committed units or option units for that contract year.
Committed units for each contract year remain subject to the agreement for that contract year, but Exelon Generation has the option to retain, subject to the agreement, all or part of the capacity of
those units denominated as option units for a contract year. Any capacity of the option units which Exelon Generation does not elect to retain for a contract year is released from the terms of the
agreement for that and subsequent contract years. The capacity of the committed units for both of 2003 and 2004 is 1,696 MW. For 2003, Exelon Generation has elected to retain 1,265 MW of the capacity
of those units that were denominated as option units for that contract year. For contract year 2004, Exelon Generation has the option to terminate one or more option units by giving Midwest Generation
notice of its exercise of its option by July 3, 2003.

The
following table lists the committed coal units, the option units for which Exelon Generation has exercised its call option for 2003 but which may be released for 2004, and the units
which, as of January 1, 2003, were released from the terms of the power purchase agreement, along with related pricing information set forth in the power purchase agreement.

Coal-Fired Units

|                  |                       |       |     | Summer(1)
Capacity Charge
($ per MW Month) |        | Non-Summer(1)
Capacity Charge
($ per MW Month) |        | Energy Prices
($/MWhr)
|----------------- | --------------------- | ----- | --- | ------------------------------------------ | ------ | ---------------------------------------------- | ------ | ----------------------
|
|
|Committed Units   |                       |       |     |                                            |        |                                                |        |                       
|                  | Waukegan Unit 7       |       | 328 |                                            | 11,000 |                                                | 11,000 |                       
|                  | Crawford Unit 8       |       | 326 |                                            | 11,000 |                                                | 11,000 |                       
|                  | Will County Unit 4    |       | 520 |                                            | 11,000 |                                                | 11,000 |                       
|                  | Joliet Unit 8         |       | 522 |                                            | 11,000 |                                                | 11,000 |                       
|                  |                       |       |     |                                            |        |                                                |        |                       
|                  |                       | 1,696 |     |                                            |        |                                                |        |                       
|Option Units(2)   |                       |       |     |                                            |        |                                                |        |                       
|                  | Waukegan Unit 6       |       | 100 |                                            | 21,300 |                                                | 21,300 |                       
|                  | Waukegan Unit 8       |       | 361 |                                            | 21,300 |                                                | 21,300 |                       
|                  | Fisk Unit 19          |       | 326 |                                            | 21,300 |                                                | 21,300 |                       
|                  | Crawford Unit 7       |       | 216 |                                            | 21,300 |                                                | 21,300 |                       
|                  | Will County Unit 3    |       | 262 |                                            | 21,300 |                                                | 21,300 |                       
|                  |                       |       |     |                                            |        |                                                |        |                       
|                  |                       | 1,265 |     |                                            |        |                                                |        |                       
|Released Units(3) |                       |       |     |                                            |        |                                                |        |                       
|                  | Will County Unit 1(4) |       | 156 |                                            |        |                                                |        |                       
|                  | Will County Unit 2(4) |       | 154 |                                            |        |                                                |        |                       
|                  | Joliet Unit 6         |       | 314 |                                            |        |                                                |        |                       
|                  | Joliet Unit 7         |       | 522 |                                            |        |                                                |        |                       
|                  | Powerton Unit 5       |       | 769 |                                            |        |                                                |        |                       
|                  | Powerton Unit 6       |       | 769 |                                            |        |                                                |        |                       
|                  |                       |       |     |                                            |        |                                                |        |                       
|                  |                       | 2,684 |     |                                            |        |                                                |        |                       
|                  |                       |       |     |                                            |        |                                                |        |                       
|                  |                       | 5,645 |     |                                            |        |                                                |        |                       
|                  |                       |       |     |                                            |        |                                                |        |                       

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The
coal-fired units power purchase agreement sets forth different capacity charges for the summer months and the non-summer months. The capacity payments are
based on the contracted amounts identified in the power purchase agreement and are adjusted by a factor that is in part based on the group equivalent availability factor. If the group equivalent
availability factor is higher than a specified threshold, then the adjustment factor calculation provides Midwest Generation with the opportunity to increase the normal monthly capacity payment, but
if the group equivalent availability factor is lower than the minimum, then Midwest Generation is penalized by a loss in the monthly capacity payment. The monthly capacity payment adjustment factor
provides Midwest Generation with an incentive to maintain the individual units at high equivalent availabilities. The group equivalent availability factor required in the calculation for potentially
achieving the full monthly capacity payment for the coal-fired units is 65% for the summer months and 55% for the non-summer months.



Under the Collins Station power purchase agreement, Exelon Generation purchases capacity and thus has the right to take from Midwest Generation electric energy
generated by the units at the Collins Station. The agreement provides for capacity payments for the units under contract, whether or not energy is generated, and for energy payments for energy
generated by Midwest Generation and taken by Exelon Generation. The capacity payments provide Midwest Generation revenue for fixed charges such as debt service, labor and insurance, and the energy
payment compensates Midwest Generation for variable costs of actual electricity production. The agreement also includes the requirement that Midwest Generation supply ancillary services with respect
to units under contract. Exelon Generation is obligated to dispatch and purchase a specified minimum amount of electric energy or pay an additional payment calculated under the agreement to meet this
minimum purchase requirement. If Exelon Generation does not request all available energy from the units under contract, Midwest Generation may sell the excess energy to third parties, subject to
several conditions.

Pursuant
to the provisions of the agreement, Exelon Generation has elected to retain, for contract year 2003, 1,084 MW of capacity of the units at the Collins Station, thus releasing
from the contract 1,614
MW of capacity. For contract year 2004, Exelon Generation has the option to terminate one or more option units by giving Midwest Generation notice of its exercise of its option by October 3,
2003.

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The
following table lists the generating units at the Collins Station for which Exelon Generation has not exercised its option to terminate for 2003 but which may be released for 2004,
and the generating units which, as of January 1, 2003, were, as a result of the exercise by Exelon Generation of its option to terminate, released from the terms of the power purchase
agreement, along with related pricing information set forth in the power purchase agreement.

Collins Station

|                  |                   |       |     | Summer(1)
Capacity Charge
($ per MW Month) |       | Non-Summer(1)
Capacity Charge
($ per MW Month) |       | Energy Prices
($/MWhr)
|----------------- | ----------------- | ----- | --- | ------------------------------------------ | ----- | ---------------------------------------------- | ----- | ----------------------
|
|
|Option Units(2)   |                   |       |     |                                            |       |                                                |       |                       
|                  | Collins Unit 1    |       | 554 |                                            | 8,333 |                                                | 8,333 |                       
|                  | Collins Unit 3    |       | 530 |                                            | 8,333 |                                                | 8,333 |                       
|                  |                   |       |     |                                            |       |                                                |       |                       
|                  |                   | 1,084 |     |                                            |       |                                                |       |                       
|Released Units(3) |                   |       |     |                                            |       |                                                |       |                       
|                  | Collins Unit 2    |       | 554 |                                            |       |                                                |       |                       
|                  | Collins Unit 4(4) |       | 530 |                                            |       |                                                |       |                       
|                  | Collins Unit 5(4) |       | 530 |                                            |       |                                                |       |                       
|                  |                   |       |     |                                            |       |                                                |       |                       
|                  |                   | 1,614 |     |                                            |       |                                                |       |                       
|                  |                   |       |     |                                            |       |                                                |       |                       
|                  |                   | 2,698 |     |                                            |       |                                                |       |                       
|                  |                   |       |     |                                            |       |                                                |       |                       

---

The
Collins Station power purchase agreement divides the capacity charges into summer months and non-summer months. The capacity payments are based on the contracted amounts
identified in the agreement and are adjusted by a factor that is in part based on the group equivalent availability factor. With respect to all electricity purchased under the agreement, Exelon
Generation is obligated to pay: a monthly capacity charge for the reserved units which varies according to the time of year; a per megawatt-hour energy charge; various charges for
start-up of the reserved units; low load charges that apply at any hour in which Exelon Generation schedules a reserved unit to operate at an output below
a level specified in the agreement; and an annual settlement amount to the extent natural gas prices exceed a specified amount and Exelon Generation dispatches a minimum amount of electric energy.



Under the peaking units power purchase agreement, Exelon Generation purchases capacity and thus has the right to take from Midwest Generation electric energy
generated by the peaking units.

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The
agreement provides for capacity payments for the units under contract, whether or not energy is generated, and for energy payments for energy generated by Midwest Generation and taken by Exelon
Generation. If Exelon Generation does not request all available energy from the units under contract, Midwest Generation may sell the excess energy to third parties, subject to several conditions.

Pursuant
to the provisions of the agreement, Exelon Generation has elected to retain, for contract year 2003, 694 MW of capacity of the peaking units, thus releasing from the contract
250 MW of capacity. For contract year 2004, Exelon Generation has the option to terminate one or more option units by giving Midwest Generation notice of its exercise of its option by
October 3, 2003.

The
following table shows the peaking units as to which Exelon Generation has not exercised its option to terminate for 2003 but which may be released for 2004, and the peaking units
which were, as a result of the exercise by Exelon Generation of its option to terminate, released from the terms of the power purchase agreement, along with related pricing information set forth in
the power purchase agreement.

Peaking Units

|                  |  |     |  | Summer(1)
Capacity Charge
($ per MW Month) |  | Non-Summer(1)
Capacity Charge
($ per MW Month) |  | Energy Prices
($/MWhr)
|----------------- |  | --- |  | ------------------------------------------ |  | ---------------------------------------------- |  | ----------------------
|
|
|Option Units(2)   |  | 694 |  | 9,500                                      |  | 9,500                                          |  | 1,500                 
|Released Units(3) |  | 250 |  |                                            |  |                                                |  |                       
|                  |  |     |  |                                            |  |                                                |  |                       
|                  |  | 944 |  |                                            |  |                                                |  |                       
|                  |  |     |  |                                            |  |                                                |  |                       

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Fuel Supply

Coal is the fuel for 5,645 MW of Midwest Generation's generating capacity. The coal is purchased from several suppliers that operate mines in the Southern Powder
River Basin of Wyoming. The coal is purchased under a variety of supply agreements ranging from one year to ten years in length. The total volume of coal consumed annually is approximately 15,500,000
to 16,500,000 tons.

All
coal is transported under long-term transportation agreements with the Union Pacific Railroad and various delivering carriers. The coal is delivered in unit trains of 115
to 126 railcars each. As of December 31, 2002, Midwest Generation leased approximately 3,600 railcars to transport the coal from the mines to the generating stations. The railcar leases have
terms that range from as short as one-and-a-half years up to seventeen years, with options to extend or purchase certain railcars at the end of the lease term. The
coal is transported nearly 1,200 miles from the mines to the stations which are located in the greater Chicago metropolitan area, except for the Powerton Station, which is located near Pekin,
Illinois.

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Coal is delivered to two stations via chartered river barges. The coal is first delivered to the Will County Station in Romeoville, Illinois, by unit trains where it is transferred from
the railcars, blended as necessary to meet station specifications, and loaded into river barges. These barges are towed by an independent contractor under a transportation agreement with Midwest
Generation to the stations located inside the city limits of Chicago.

The
2,698 MW Collins Station is a gas-fired steam generating station which may also burn fuel oil. Approximately 3,000,000 barrels of usable on-site fuel oil
storage exist at the station. Edison Mission Marketing & Trading, Midwest Generation's marketing affiliate, purchases the natural gas and provides price risk management services for both fuel
oil and natural gas. All fuel oil purchasing is done, as necessary, by Edison Mission Energy Services, Inc., another affiliate.

Approximately
944 MW of peaking capacity in the form of simple cycle combustion turbines are located throughout the northern part of Illinois. These units are fueled with either natural
gas or distillate fuel oils, depending on the specific site. The natural gas is purchased by Edison Mission Marketing & Trading. The distillate fuel oil is purchased by Edison Mission Energy
Services, Inc. under annual contracts with local suppliers, and the residual fuel oil is purchased as required by generation forecasts.

See
"Item 7. Management's Discussion and Analysis of Results of Operations and Financial ConditionContractual Obligations, Commitments and Contingencies," for additional
discussion of contractual commitments related to Midwest Generation's fuel supply contracts.

Operation of the Stations

The operating performance of the stations, based on equivalent availability factors for the years 2000 to 2002, is shown below. The equivalent availability
factor, a ratio expressed as a percentage, is the number of megawatt-hours that each station is available to generate electricity divided by the product of the capacity of each station (in megawatts)
and the number of hours in the period.



Facility

2000

2001

2002Collins

86.9%

83.0%

92.5%Crawford

82.0%

79.6%

88.1%Fisk

93.9%

85.0%

77.4%Joliet Unit 6

81.7%

78.5%

89.7%Joliet Units 7 and 8

74.8%

73.1%

88.6%Powerton

80.8%

88.8%

80.2%Waukegan

83.7%

91.9%

79.0%Will County

74.0%

79.4%

91.2%


Operation and Maintenance

Midwest Generation's operating and maintenance plan, as well as several planned overhauls of major equipment and controls, are consistent with Midwest
Generation's goal of prudently operating and maintaining the units. Midwest Generation utilizes state-of-the-art computerized maintenance systems to plan and
schedule all maintenance activities. Midwest Generation also employs a preventative maintenance program complemented by new predictive maintenance technologies such as lubrication analysis, thickness
testing, thermography, vibration analysis and acoustic analysis. Reliability-centered maintenance techniques are currently being developed for critical systems to better define condition monitoring
parameters and redefine maintenance strategies.

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Transmission and Interconnection

Station units at Joliet, Will County, Crawford, Waukegan and Fisk Stations and off-site peakers located at Electric Junction, Lombard, Calumet, Bloom
and Sabrooke are connected to Commonwealth Edison's 138kV transmission system. The offsite peakers are connected via transmission substations, and the remaining units are connected through various
circuit breakers and transformers. Power output from the Collins Station's units is connected to Commonwealth Edison's 765kV transmission system and 345kV transmission system. The two Joliet units
subject to the lease transactions and the two Powerton units deliver their power into Commonwealth Edison's 345kV transmission system.

Insurance

Midwest Generation maintains insurance coverages consistent with those normally carried by companies engaged in similar business and owning similar properties.
Midwest Generation's insurance program includes all-risk property insurance, including business interruption, covering real and personal property, including losses from boilers, machinery
breakdowns, and the perils of earthquake and flood, subject to specific sublimits. Midwest Generation also carries general liability insurance covering liabilities to third parties for bodily injury
or property damage resulting from operations, automobile liability insurance and excess liability insurance. Further, Midwest Generation has the benefit of title insurance. Limits and deductibles in
respect of these insurance policies are comparable to those carried by other electric generating facilities of similar size.

Seasonality

Under the terms of the power purchase agreements with Exelon Generation, Midwest Generation receives significantly higher capacity payments during June through
September, the summer months. Accordingly, Midwest Generation's operating results are substantially higher during these months and lower, including expected losses, during non-summer
months. In addition, Midwest Generation expects that future electric revenues will be higher in the third quarter of each year due to higher demand for electricity resulting from warmer weather in the
summer months.

Competition

Federal

The Energy Policy Act of 1992 laid the groundwork for a competitive wholesale market for electricity. Among other things, the Energy Policy Act expanded the
Federal Energy Regulatory Commission's authority to order electric utilities to transmit, or wheel, third-party electricity over their transmission lines, thus allowing qualifying facilities under the
Public Utility Regulatory Policies Act of 1978, power marketers and those qualifying as exempt wholesale generators under the Public Utility Holding Company Act of 1935 to compete more effectively in
the wholesale market.

In
April 1996, the Federal Energy Regulatory Commission issued Order No. 888, also known as the Open Access Rules, which require utilities to offer eligible wholesale
transmission customers non-discriminatory open access on utility transmission lines on a comparable basis to the utilities' own use of the lines. In addition, the Open Access Rules
directed jurisdictional public utilities that control a substantial portion of the nation's electric transmission networks to file uniform, non-discriminatory open access tariffs
containing the terms and conditions under which they would provide such open access transmission service. On March 4, 1997, the Federal Energy Regulatory Commission issued Order
No. 888-A, reaffirming its basic determinations in Order No. 888, promoting wholesale competition through open access non-discriminatory transmission services by
public utilities.

In
December 1999, the Federal Energy Regulatory Commission issued Order No. 2000, which required all transmission-owning utilities to file by December 15, 2000, a
statement of their plans with

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respect to placing operating control over their transmission assets under a Regional Transmission Organization, or RTO, meeting certain criteria set forth in the Order. Although Order No. 2000
did not mandate that a utility join an RTO, it set forth various incentives for voluntary joining and required utilities to explain in detail their reasons for deviating from the objectives set forth
in the Order. RTOs
meeting the Commission's criteria in Order No. 2000 were required to be operationally independent of the transmission-owning utilities whose assets they controlled and to possess other
essential attributes, such as regional scope and configuration, the authority to receive and rule upon requests for service, a separate tariff governing all transactions of the RTO, a market
monitoring capability, and other features. In subsequent orders, the Commission has progressively tightened its policies in favor of RTO formation, including an explicit proposal that approvals of
market-based rate authority for affiliates of utilities owning transmission should be tied to the utilities' placing functional control over their transmission assets in an RTO meeting the criteria of
Order No. 2000. On January 15, 2003, the Federal Energy Regulatory Commission proposed to allow additional percentage points on a utility's return on equity when it participates in a
RTO, divests its RTO-operated transmission assets, or pursues additional measures that promote efficient operation and expansion of the transmission grid. As outlined below, the Commission
has also proposed to establish a standard market design that would govern transmission service and energy trading arrangements in all regions of the country. These and other regulatory initiatives by
the Federal Energy Regulatory Commission are continuing to unfold at the present time, and it is not possible to predict how far or how fast they will go. However, the direction of regulatory policy
at the Commission at the present time appears generally positive for continued progress toward competitive wholesale electricity markets.

Over
the past few years, Congress has considered various pieces of legislation to restructure the electric industry which would require, among other things, customer choice, repeal of
the Public Utility Holding Company Act and of the Public Utility Regulatory Policies Act. In January 2001, President Bush appointed a Cabinet level task force, headed by Vice President Cheney,
to examine long-term energy policy. The task force was prompted in part by the California power crisis and its potential effect on neighboring states and other parts of the U.S. economy.
The task force has issued reports that form the basis for the Bush administration's energy legislative proposals. There are also a number of other proposals that have been introduced in Congress that
incorporate provisions related to restructuring electricity markets. It is unclear at this time which proposals, if any, will be enacted, and what the effects will be.

State

The Energy Policy Act did not preempt state authority to regulate retail electric service. Historically, in most states, competition for retail customers is
limited by statutes or regulations granting existing electric utilities exclusive retail franchises and service territories. Since the passage of the Energy Policy Act, the advisability of retail
competition has been the subject of intense debate in federal and state legislative and regulatory forums. Many states have taken steps to facilitate retail competition as a means to stimulate
competitive generation rates. Retail competition in Illinois commenced on October 1, 1999 for mostly large commercial and industrial customers, and full access, for all residential customers,
occurred by May 1, 2002.

Regulatory Matters

General

Federal laws and regulations govern, among other things, transactions by and with purchasers of power, including utility companies, the operations of a power
plant and the ownership of a power plant. Under limited circumstances where exclusive federal jurisdiction is not applicable or specific exemptions or waivers from state or federal laws or regulations
are otherwise unavailable, federal and/or state utility regulatory commissions may have broad jurisdiction over non-utility owned electric power plants.

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Energy-producing projects are also subject to federal, state and local laws and regulations that govern the geographical location, zoning, land use and operation of a project. Federal, state and
local environmental requirements generally require that a wide variety of permits and other approvals be obtained before the commencement of construction or operation of an energy-producing facility
and that the facility then operate in compliance with these permits and approvals.

Midwest
Generation is subject to a varied and complex body of laws and regulations that are in a state of flux and which both public officials and private parties may seek to enforce.
Intricate and changing environmental and other regulatory requirements may necessitate substantial expenditures and may create a significant risk of expensive delays or significant loss of value in a
power plant if it is unable to function as planned due to changing requirements or local opposition.

State Energy Regulation

State public utility commissions have broad jurisdiction over non-qualifying facility independent power projects, including exempt wholesale
generators, which are considered public utilities in many states. This jurisdiction often includes the issuance of certificates of public convenience and necessity and/or other certifications to
construct, own and operate a facility, engage in retail energy sales, as well as the regulation of organizational, accounting, financial and other corporate matters on an ongoing basis.

Some
states that have restructured their electric industries require generators to register to provide electric service to customers. Many states are currently undergoing significant
changes in their electric statutory and regulatory frameworks that result from restructuring the electric industries that may affect generators in those states. Although the Federal Energy Regulatory
Commission generally has exclusive jurisdiction over the rates charged by a non-qualifying facility independent power project to its wholesale customers, a state's public utility
commission has the ability, in practice, to influence the establishment of these rates by asserting jurisdiction over a purchasing utility's ability to pass the resulting cost of purchased power
through to its retail customers. In addition, states may assert jurisdiction over the siting and construction of independent power projects and, among other things, the issuance of securities, related
party transactions and the sale or other transfer of assets by these facilities. The actual scope of jurisdiction over independent power projects by state public utility commissions varies from state
to state.

Although
state public utility commissions do not have any jurisdiction to modify the terms of wholesale power sales, Midwest Generation cannot provide assurance that its power sales
contracts will not be subject to adverse consequences as a result of regulatory actions by a state commission even though it sells power exclusively at wholesale.

Midwest Deregulation Status

Illinois Restructuring

In December 1997, the Governor of Illinois signed into law the Electric Service Customer Choice and Rate Relief Law of 1997. Midwest Generation refers to
this law as the Illinois Electric Law. The Illinois Electric Law required electric utilities to file delivery services implementation plans for non-residential retail customers no later
than March 1, 1999 and for residential customers no later than August 1, 2001 and allowed utilities to recover the costs associated with the provision of delivery services. The Illinois
Electric Law also required the Illinois Commerce Commission to adopt reliability rules for the transmission and distribution systems of Illinois utilities. These rules have been adopted and include
reporting and penalty provisions that apply to Commonwealth Edison.

Illinois'
transition to retail electric competition was conducted in phases with approximately one-third of non-residential customers having had the opportunity
to purchase electricity from

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alternative retail electric suppliers or electric utilities serving retail customers outside their service areas, effective October 1, 1999. Choice of suppliers is now available to all
non-residential customers, and the retail market for residential electric customers was opened to competition on May 1, 2002. Currently, there are no alternative retail electric
suppliers certified to sell electricity to residential customers in Illinois. Alternative retail electric suppliers include any person or company, other than an Illinois electric utility, that sells
electricity to one or more retail electric customers in Illinois.

During
the transition to full open access, customers that switch to alternative retail electric suppliers or electric utilities serving retail customers outside their service areas may
be required to pay transition charges, also known as "stranded cost" charges, to compensate the utilities that previously supplied these customers for past investments, including investments in
generating plants. The Illinois Electric Law calls for these transition charges to end no later than December 31, 2006, although some utilities may petition the Illinois Commerce Commission to
extend the period for collection of transition charges until December 31, 2008.

Independent System Operator/Regional Transmission Organization

The Illinois Electric Law provides that each Illinois electric utility that owns or controls transmission facilities or provides transmission services in
Illinois, and is a member in the Mid-American Interconnected Network, shall submit for approval to the Federal Energy Regulatory Commission an application for establishing or joining an
independent system operator. On December 11, 2002, Commonwealth Edison, American Electric Power and others filed with the Federal Energy Regulatory Commission seeking permission to include
their transmission systems within the RTO proposed by PJM. The effect of the filing would be to transfer functional control of such systems to PJM and to eliminate so-called rate pancaking
for transmission and ancillary services over a region that would extend significantly beyond the current western boundaries of PJM and into electricity markets in the Midwest. Rate pancaking occurs
when energy must move through multiple, separately priced transmission systems to travel from its point of production to its point of delivery, and each transmission owner along the line charges
separately for the use of its system. The Federal Energy Regulatory Commission was requested by the parties to act on such filing by mid-February 2003. However, such action has now
been delayed by the unanticipated enactment of emergency legislation by the Virginia legislature that purports to prevent any Virginia utility (including American Electric Power's subsidiary,
Appalachian Power Company) from transferring control of its transmission assets to PJM until July 2004. The effect of such enactment is to create uncertainty regarding the timing, and possibly
the ultimate feasibility, of American Electric Power's and Commonwealth Edison's moving forward with their applications to place their transmission systems under the control of PJM. On
March 14, 2003, the states of Pennsylvania, Ohio and Michigan filed a motion with the Federal Energy Regulatory Commission seeking an order granting immediate approval of the pending
applications of Commonwealth Edison and American Electric Power to join PJM, or in the alternative for temporary control of such parties' transmission assets by PJM. On March 17, 2003,
Commonwealth Edison filed a motion requesting immediate approval of such applications, and opposing any temporary measures of the sort suggested by Pennsylvania, Ohio and Michigan. The outcome of such
efforts is uncertain.

U.S. Federal Energy Regulation

The Federal Energy Regulatory Commission has ratemaking jurisdiction and other authority with respect to interstate wholesale sales and transmission of electric
energy under the Federal Power Act and with respect to certain interstate sales, transportation and storage of natural gas under the Natural Gas Act of 1938. The Securities and Exchange Commission has
regulatory powers with respect to upstream owners of electric and natural gas utilities under the Public Utility Holding Company Act of 1935. The enactment of the Public Utility Regulatory Policies
Act of 1978 and the adoption of regulations under that Act by the Federal Energy Regulatory Commission provided incentives for the

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development of cogeneration facilities and small power production facilities using alternative or renewable fuels by establishing certain exemptions from the Federal Power Act and the Public Utility
Holding Company Act for the owners of qualifying facilities. The passage of the Energy Policy Act in 1992 further encouraged independent power production by providing additional exemptions from the
Public Utility Holding Company Act for exempt wholesale generators and foreign utility companies.

An
"exempt wholesale generator" under the Public Utility Holding Company Act is an entity determined by the Federal Energy Regulatory
Commission to be exclusively engaged, directly or indirectly, in the business of owning and/or operating specified eligible facilities and selling electric energy at wholesale or, if located in a
foreign country, at wholesale or retail.

The Federal Power Act.The Federal Power Act grants the Federal Energy Regulatory Commission exclusive jurisdiction over the
rates, terms and conditions of wholesale sales of electricity and transmission services in interstate commerce, including ongoing, as well as initial, rate jurisdiction. This jurisdiction allows the
Federal Energy Regulatory Commission to revoke or modify previously approved rates after notice and opportunity for hearing. These rates may be based on a cost-of-service
approach or, in geographic and product markets determined by the Federal Energy Regulatory Commission to be workably competitive, may be market based. As noted, most qualifying facilities are exempt
from the ratemaking and several other provisions of the Federal Power Act. Exempt wholesale generators and other non-qualifying facility independent power projects are subject to the
Federal Power Act and to the Federal Energy Regulatory Commission's ratemaking jurisdiction thereunder, but the Federal Energy Regulatory Commission typically grants exempt wholesale generators the
authority to charge market-based rates to purchasers which are not affiliated electric utility companies as long as the absence of market power is shown. In addition, the Federal Power Act grants the
Federal Energy Regulatory Commission jurisdiction over the sale or transfer of jurisdictional facilities, including wholesale power sales contracts, and in some cases jurisdiction over the issuance of
securities or the assumption of specified liabilities and some interlocking directorates. In granting authority to make sales at market-based rates, the Federal Energy Regulatory Commission typically
also grants blanket approval for the issuance of securities and partial waiver of the restrictions on interlocking directorates. The Federal Energy Regulatory Commission has indicated its intention to
review some of the waivers of financial reporting rules currently granted to some entities with market rate authority.

Midwest
Generation is subject to the Federal Energy Regulatory Commission ratemaking regulation under the Federal Power Act. In addition, the Federal Energy Regulatory Commission's
order, as is customary with market-based rate schedules, reserved the right to revoke Midwest Generation's market-based rate authority on a prospective basis if it is subsequently determined that
Midwest Generation or any of its affiliates possess excessive market power. If the Federal Energy Regulatory Commission were to revoke Midwest Generation's market-based rate authority, it would be
necessary for Midwest Generation to file, and obtain Federal Energy Regulatory Commission acceptance of, its rate schedule as a cost-of-service rate schedule. In addition, the
loss of market-based rate authority would subject Midwest Generation to the accounting, record keeping and reporting requirements that are imposed on utilities with cost-based rate
schedules.

The Public Utility Holding Company Act.Unless exempt or found not to be a holding company by the Securities and Exchange
Commission, a company that falls within the definition of a holding company must register with the Securities and Exchange Commission and become subject to Securities and Exchange Commission
regulation as a registered holding company under the Public Utility Holding Company Act. "Holding company" is defined in Section 2(a)(7) of the
Public Utility Holding Company Act to include, among other things, any company that owns 10% or more of the voting securities of an electric utility company. "Electric utility
company" is defined in Section 2(a)(3) of the Public Utility Holding Company Act to include any company that owns or operates facilities used for generation,
transmission or distribution of electric energy for sale. Exempt wholesale generators and foreign utility companies are not deemed to be electric utility companies, and ownership or operation of
qualifying

17

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facilities does not cause a company to become an electric utility company. Securities and Exchange Commission precedent also indicates that it does not consider "paper facilities," such as contracts
and tariffs used to make power sales, to be facilities used for the generation, transmission or distribution of electric energy for sale, and power marketing activities will not, therefore, result in
an entity being deemed to be an electric utility company.

A
registered holding company is required to limit its utility operations to a single integrated utility system and to divest any other operations not functionally related to the
operation of that utility system. In addition, a registered holding company will require Securities and Exchange Commission approval for the issuance of securities, other major financial or business
transactions, such as mergers, and transactions between and among the holding company and holding company subsidiaries.

Edison
International, Midwest Generation's ultimate parent company, is a holding company because it owns Southern California Edison Company, an electric utility company. However, Edison
International is exempt from registration pursuant to Section 3(a)(1) of the Public Utility Holding Company Act because the public utility operations of the holding company system are
predominantly intrastate in character. Consequently, Midwest Generation is not a subsidiary of a registered holding company so long as Edison International continues to be exempt from registration
pursuant to Section 3(a)(1) or another of the exemptions enumerated in Section 3(a). Midwest Generation is not a holding company under the Public Utility Holding Company Act, because it
does not own interests in any other company.

Under
the Energy Policy Act, a company engaged exclusively in the business of owning and/or operating a facility used for the generation of electric energy exclusively for sale at
wholesale may be exempted from regulation under the Public Utility Holding Company Act as an exempt wholesale generator. On November 9, 1999, the Federal Energy Regulatory Commission issued an
order determining that, based on the facts stated in Midwest Generation's application, Midwest Generation is an exempt wholesale generator.

If
a "material change" occurs in facts that might affect Midwest Generation's continued eligibility for exempt wholesale generator status, Midwest Generation must within 60 days
of this material change:



If
Midwest Generation were to lose its exempt wholesale generator status, it would become an electric utility company under the Public Utility Holding Company Act. This could cause EME
to become a holding company subject to registration and regulation under the Public Utility Holding Company Act. It also could cause Edison International to lose its exemption from regulation, and
require it to register, under the Public Utility Holding Company Act. This additional regulation would be difficult to comply with and could require EME and Edison International to restructure their
operations significantly to achieve compliance. Loss of exempt wholesale generator status also could trigger defaults under the covenants in Midwest Generation's agreements. If loss of exempt
wholesale generator status by Midwest Generation were to subject EME and/or Edison International to registration and regulation under the Public Utility Holding Company Act on a retroactive basis, it
could subject them to penalties or other burdens and could cause certain agreements and contracts they have entered into to become voidable.

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Natural Gas Act.Midwest Generation's Collins Station and peaking units have the dual capability of burning natural gas or
oil. Under the Natural Gas Act, the Federal Energy Regulatory Commission has jurisdiction over certain sales of natural gas and over transportation and storage of natural gas in interstate commerce.
The Federal Energy Regulatory Commission has granted blanket authority to all persons to make sales of natural gas without restriction but continues to exercise significant oversight with respect to
transportation and storage of natural gas services in interstate commerce.

Transmission of Wholesale Power

Generally, plants that sell power to wholesale purchasers other than the local utility to which the plant is interconnected require the transmission of
electricity over power lines owned by others. This transmission service over the lines of intervening transmission owners is also known as wheeling. The prices and other terms and conditions of
transmission contracts are regulated by the Federal Energy Regulatory Commission when the entity providing the wheeling service is a jurisdictional public utility under the Federal Power Act. Until
1992, the Federal Energy Regulatory Commission's ability to compel wheeling was very limited, and the availability of voluntary wheeling service could be a significant factor in determining whether a
site was viable for project development.

The
Federal Energy Regulatory Commission's authority under the Federal Power Act to require electric utilities to provide transmission service on a case-by-case
basis to qualifying facilities, exempt wholesale generators, and other power generators was expanded substantially by the Energy Policy Act. Furthermore, in 1996 the Federal Energy Regulatory
Commission issued Order No. 888, in which the Commission asserted the power, under its authority to eliminate undue discrimination in transmission, to compel all jurisdictional public utilities
under the Federal Power Act to file open access transmission tariffs consistent with a pro forma tariff drafted by the Federal Energy Regulatory Commission. The Federal Energy Regulatory Commission
subsequently issued Order Nos. 888-A, 888-B and 888-C to clarify the terms that jurisdictional transmitting utilities are required to include in their open access
transmission tariffs. The Federal Energy Regulatory Commission also issued Order No. 889, which required those transmitting utilities to abide by specified standards of conduct when using their
own transmission systems to make wholesale sales of power, and to post specified transmission information, including information about transmission requests and availability, on a publicly available
computer bulletin board.

In
issuing Order No. 888et al., the Federal Energy Regulatory Commission determined that the open-access rules set
forth in the order would apply to transmission with respect to wholesale sales and also with respect to retail transactions where the transmission component had been unbundled from the
retail sale by state regulatory action or voluntarily by the utility making the retail sale. The Commission declined to assert jurisdiction over retail transmission service whose costs were included
in the delivered price of energy to the end user (i.e., costs that remained "bundled" into the retail sale). Subsequent court appeals of Order No. 888 were brought by parties challenging the
order on the basis that the Commission had no authority to regulate the transmission of unbundled retail sales and by parties challenging the Commission's failure to include the transmission of
bundled retail sales in the order. On June 30, 2000, the U.S. Court of Appeals for the District of Columbia Circuit upheld the decision by the Federal Energy Regulatory Commission in both
respects, finding that the Commission did have jurisdiction to regulate transmission of unbundled retail transactions, and that it was not required to assert jurisdiction over transmission embedded in
bundled retail sales. In an opinion issued on March 4, 2002, the Supreme Court affirmed the decision of the U.S. Court of Appeals.

While
Order No. 888 was pending judicial review, it became apparent to the Federal Energy Regulatory Commission that relying exclusively on the Order No. 888 requirement to
file open access tariffs was not having the desired effects of eliminating discriminatory behavior by transmission-owning utilities and promoting the development of competitive wholesale electricity
markets. Accordingly, in an effort to remedy the shortcomings it perceived, the Commission on December 20, 1999, issued Order

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No. 2000, which required all jurisdictional transmission-owning utilities to file by December 15, 2000, a statement of their plans with respect to placing functional control over their
transmission assets under a Regional Transmission Organization, or RTO, meeting certain criteria set forth in the order. Although Order No. 2000 did not mandate that a utility join an RTO, it
set forth various incentives for voluntary action by utilities to take such action and required them to explain in detail their reasons for deviating from the objectives set forth in the Order. RTOs
meeting the Commission's criteria in Order No. 2000 were required to be operationally independent of the transmission-owning utilities whose assets they controlled and to possess other
essential attributes, such as regional scope and configuration, the authority to receive and rule upon requests for service, a separate tariff governing all transactions of the RTO, a market
monitoring capability, and other features. In subsequent orders, the Commission has progressively tightened its policies in favor of RTO formation, by such means as an explicit proposal that approvals
of market-based rate authority for affiliates of utilities owning transmission should be tied to such utilities' placing functional control over their transmission assets in an RTO meeting the
criteria of Order No. 2000.

On
July 31, 2002, the Federal Energy Regulatory Commission issued a Notice of Proposed Rulemaking having the stated purpose of remedying the remaining opportunities for undue
discrimination in transmission and establishing a standardized transmission service and wholesale market design (SMD) that would provide a "level playing field" for all entities that seek to
participate in wholesale electric markets. The SMD proposal includes a number of features that, taken together, should provide a flexible transmission service and an open and transparent spot market
design that convey the right pricing signals for investment in transmission and generation facilities, and for other purposes. Comments on certain features of the SMD proposal were filed by interested
parties in October 2002 and during the first quarter of 2003. The SMD proposal has also engendered considerable comment, and in some cases opposition, including in Congress, and the anticipated
timetable for issuance of a final rule is now unclear. The Federal Energy Regulatory Commission recently indicated its intention to publish a "White Paper" in April 2003 setting forth its plans
for SMD implementation. Whether adopted in its current or modified form, it may take several years before the SMD model becomes fully operational in all regions of the country. These and other
regulatory initiatives by the Federal Energy
Regulatory Commission are ongoing, and it is not possible to predict the extent of future developments or how they might affect the wholesale power business.

Retail Competition

In response to pressure from retail electric customers, particularly large industrial users, the state commissions or state legislatures of many states have
considered whether to open the retail electric power market to competition. Retail competition is possible when a customer's local utility agrees, or is required, to unbundle its distribution service
(for example, the delivery of electric power through its local distribution lines) from its transmission and generation service (for example, the provision of electric power from the utility's
generating facilities or wholesale power purchases). Several state commissions and legislatures have issued orders or passed legislation requiring utilities to offer unbundled retail distribution
service, which is called retail wheeling, and phasing in retail wheeling over the next several years.

The
competitive pricing environment that will result from retail competition may cause utilities to experience revenue shortfalls and deteriorating creditworthiness. However, Midwest
Generation expects that most, if not all, state plans will insure that utilities receive sufficient revenues, through a distribution surcharge if necessary, to pay their obligations under existing
long-term power purchase contracts with qualifying facilities and exempt wholesale generators. On the other hand, qualifying facilities and exempt wholesale generators may be subject to
pressure to lower their contract prices in an effort to reduce the stranded investment costs of their utility customers. Recent volatility in

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California and other regional power markets has resulted in several states slowing, and in some cases reversing, their plans to allow retail competition.

Environmental Matters

Midwest Generation is subject to environmental regulation by federal, state and local authorities in the United States. Midwest Generation believes that it is in
substantial compliance with environmental regulatory requirements and that maintaining compliance with current requirements will not materially affect its financial position or results of operations.
However, possible future developments, such as the promulgation of more stringent environmental laws and regulations, and future proceedings that may be taken by environmental authorities, could
affect the costs and the manner in which Midwest Generation conducts its business and could cause it to make substantial additional capital expenditures. There is no assurance that Midwest Generation
would be able to recover these increased costs from its customers or that its financial position and results of operations would not be materially adversely affected.

Typically,
environmental laws require a lengthy and complex process for obtaining licenses, permits and approvals prior to construction and operation of a project. Meeting all the
necessary requirements can delay or sometimes prevent the completion of a proposed project as well as require extensive modifications to existing projects, which may involve significant capital
expenditures.

For
more information on environmental regulation, see "Item 7. Management's Discussion and Analysis of Results of Operations and Financial ConditionEnvironmental Matters and
Regulations."

Employees

At December 31, 2002, Midwest Generation employed 1,075 employees, approximately 828 of whom are covered by a collective bargaining agreement. Under
Illinois law and as a result of agreements with the union representing the physical, technical, and clerical employees at the time Midwest Generation acquired the facilities, wages, benefits, and
working conditions are set. The collective bargaining agreement is due to expire on December 31, 2005. Most of Midwest Generation's employees were employees of Commonwealth Edison prior to
Midwest Generation's acquisition of its power generation assets from Commonwealth Edison. Midwest Generation employs a skilled and disciplined workforce that is well prepared to operate within a
competitive and deregulated environment. Midwest Generation's staffing levels are comparable with benchmark standards for facilities of a similar size and type.

Midwest
Generation also had a retirement health care and other benefits plan related to its union-represented employees that expired on June 15, 2002. In October 2002,
Midwest Generation reached an agreement with its union-represented employees on a new retirement health care and other benefits plan which extends from January 1, 2003 through June 30,
2005. Midwest Generation continued to provide benefits at the same level as those in the expired agreement until December 31, 2002.

ITEM 2. PROPERTIES

Midwest Generation owns a fee interest in the following sites, with the exception of the Collins Station, the Powerton Station and the Joliet Units 7 and 8, as
more particularly described below. The first eight listed sites are electric generating facilities, and the last nine listed sites are peaking units, the first four of which are located on the same
sites as some of Midwest Generation's electric generating facilities.

Midwest
Generation purchased all the properties, with the exception of the Collins Station, from Commonwealth Edison in December 1999. Midwest Generation assigned the right to
purchase Collins Station to third parties, who purchased the Collins Station, entered into leases with an affiliate of

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Midwest Generation, who in turn leased the plant to Midwest Generation. Commonwealth Edison sold only a portion of its then owned properties to Midwest Generation and retained the remaining portions
of its properties for its own uses. Midwest Generation and Commonwealth Edison have various reciprocal permanent and temporary easements over Midwest Generation's respective parcels for the location,
use, maintenance and repair of those facilities and equipment that are used in connection with the operations of Midwest Generation and Commonwealth Edison.

The
land at the Collins Station and the Collins Station facilities are encumbered by leases and a mortgage for a loan in an amount up to $774 million. The financing was structured
as a sale-leaseback transaction in December 1999. As a result of the sale-leaseback transaction, Midwest Generation leased the property on which the station is located
to the owner trusts under site leases. The owner trusts in turn subleased their undivided ground interest in the property to Midwest Generation's affiliate, Collins Holdings EME LLC, which in turn
sub-subleases the land back to Midwest Generation. The terms of the site leases and site subleases are 33.75 years, with renewal options. Rent is paid in advance and/or arrears on
each January 6, April 6, July 6 and October 6.

As
a result of the sale-leaseback of the Powerton Station and Joliet Units 7 and 8 in August 2000, Midwest Generation leased the property on which the generating units
are located to the owner trusts under site leases, and the owner trusts in turn subleased their undivided ground interest in the property back to Midwest Generation under site subleases. The terms of
the site leases and site subleases are 33.75 years for the Powerton property and 30 years for the Joliet property, with renewal options. Rent is paid in advance and/or arrears on each
January 2 and July 2.

Description of Properties

|Plant or Site                  |  | Location                  |  | Interest
In Land |  | Type    |  | Megawatts
|------------------------------ |  | ------------------------- |  | ---------------- |  | ------- |  | ---------
|Electric Generating Facilities |  |                           |  |                  |  |         |  |          
|Collins Station(1)             |  | Grundy County, Illinois   |  | owned            |  | oil/gas |  | 2,698    
|Crawford Station               |  | Chicago, Illinois         |  | owned            |  | coal    |  | 542      
|Fisk Station                   |  | Chicago, Illinois         |  | owned            |  | coal    |  | 326      
|Joliet Unit 6                  |  | Joliet, Illinois          |  | owned            |  | coal    |  | 314      
|Joliet Units 7 and 8           |  | Joliet, Illinois          |  | owned            |  | coal    |  | 1,044    
|Powerton Station               |  | Pekin, Illinois           |  | owned            |  | coal    |  | 1,538    
|Waukegan Station               |  | Waukegan, Illinois        |  | owned            |  | coal    |  | 789      
|Will County Station(1)         |  | Romeoville, Illinois      |  | owned            |  | coal    |  | 1,092    
|Peaking Units                  |  |                           |  |                  |  |         |  |          
|Crawford                       |  | Chicago, Illinois         |  | owned            |  | oil/gas |  | 121      
|Fisk                           |  | Chicago, Illinois         |  | owned            |  | oil/gas |  | 163      
|Joliet                         |  | Joliet, Illinois          |  | owned            |  | oil/gas |  | 101      
|Waukegan                       |  | Waukegan, Illinois        |  | owned            |  | oil/gas |  | 92       
|Calumet                        |  | Chicago, Illinois         |  | owned            |  | oil/gas |  | 129      
|Bloom                          |  | Chicago Heights, Illinois |  | owned            |  | oil/gas |  | 45       
|Electric Junction              |  | Aurora, Illinois          |  | owned            |  | oil/gas |  | 159      
|Lombard                        |  | Lombard, Illinois         |  | owned            |  | oil/gas |  | 64       
|Sabrooke                       |  | Rockford, Illinois        |  | owned            |  | oil/gas |  | 70       
|                               |  |                           |  |                  |  |         |  |          
|                               |  |                           |  | Total            |  |         |  | 9,287    
|                               |  |                           |  |                  |  |         |  |          

---

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ITEM 3. LEGAL PROCEEDINGS

No material legal proceedings are presently pending against Midwest Generation.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Inapplicable.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

All the outstanding membership interest is, as of the date hereof, owned by Edison Mission Midwest Holdings, which is an indirect wholly owned subsidiary of
Edison International. There is no market for the membership interest.

Dividends
on the membership interest will be paid when declared by Midwest Generation's board of managers. There were no cash dividends to Edison Mission Midwest Holdings in 2002, 2001
and 2000.

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ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth Midwest Generation's selected financial data for the periods indicated. On December 15, 1999,
Midwest Generation acquired the power generation assets from Commonwealth Edison for a purchase price of approximately $4.9 billion. Midwest Generation had no significant activity before the
acquisition. The selected financial data was derived from Midwest Generation's audited financial statements and is qualified in its entirety by the more detailed information and financial statements,
including the notes to the financial statements, included in this report.

|                           |  | Years Ended December 31, |         | Period from
Inception
(July 12, 1999) to
December 31, 1999 |  
|-------------------------- |  | ------------------------ | ------- | ---------------------------------------------------------- | -
|
|
|INCOME STATEMENT DATA      |  |                          |         |                                                            |  
|Operating revenues         |  | $                        | 1,148.7 |                                                            | $
|Operating expenses         |  |                          | 946.4   |                                                            |  
|                           |  |                          |         |                                                            |  
|Operating income (loss)    |  |                          | 202.3   |                                                            |  
|Interest and other expense |  |                          | (227.6  | )                                                          |  
|                           |  |                          |         |                                                            |  
|Loss before income taxes   |  |                          | (25.3   | )                                                          |  
|Benefit for income taxes   |  |                          | 9.5     |                                                            |  
|                           |  |                          |         |                                                            |  
|Net loss                   |  | $                        | (15.8   | )                                                          | $
|                           |  |                          |         |                                                            |  

|                            |  | As of December 31,
|--------------------------- |  | ------------------
|
|
|BALANCE SHEET DATA          |  |                   
|Assets                      |  | $                 
|Current liabilities         |  |                   
|Long-term debt              |  |                   
|Lease financing             |  |                   
|Other long-term obligations |  |                   
|Member's equity             |  |                   

|                                                |  | Years Ended December 31, |      
|----------------------------------------------- |  | ------------------------ | -----
|
|
|CASH FLOW DATA                                  |  |                          |      
|Cash provided by (used in) operating activities |  | $                        | 171.3
|Cash provided by (used in) financing activities |  |                          | (77.7
|Cash used in investing activities               |  |                          | (71.6

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following discussion contains forward-looking statements. These statements are based on Midwest Generation, LLC's (Midwest
Generation's) knowledge of present facts, current expectations about future events and assumptions about future developments. Forward-looking statements are not guarantees of performance; they are
subject to risks, uncertainties and assumptions that could cause actual future activities and results of operations to be materially different from those set forth in this discussion. Important
factors that could cause actual results to differ include risks set forth under "Market Risk Exposures" and "Risk Factors."

General

Midwest Generation is a special-purpose Delaware limited liability company formed on July 12, 1999 for the purpose of owning or leasing, making
improvements to and operating the power generation assets it purchased from Commonwealth Edison, which are referred to as the Illinois Plants. Midwest Generation is a wholly owned subsidiary of Edison
Mission Midwest Holdings Co., an indirect wholly owned subsidiary of Edison Mission Energy, which is referred to as EME. EME is a wholly owned subsidiary of Mission Energy Holding Company, which is
referred to as MEHC, and is an indirect wholly owned subsidiary of Edison International. Midwest Generation acquired the power generation assets on December 15, 1999 for a purchase price of
approximately $4.9 billion, with adjustments for changes in the book value of inventories and pro-rations related to specific items including but not limited to taxes, rents and
fees. Prior to the acquisition of these power generation assets, Midwest Generation had no significant business activity.

Concurrent
with the acquisition, Midwest Generation assigned its right to purchase the Collins Station, a 2,698 megawatt (MW) gas and oil-fired generating station located in
Illinois, to four third-party entities. After this assignment, and the purchase of the facility by the third parties, an affiliate of Midwest Generation leased and Midwest Generation subleased the
Collins Station. Each of the leases and subleases has an initial term of 33.75 years. These subleases have been accounted for as a lease financing for accounting purposes.

Midwest
Generation also completed sale-leaseback transactions with respect to the Illinois peaker units in July 2000 and the Powerton and Joliet power facilities in
August 2000. Midwest Generation sold these assets and entered into leasing agreements to control the use of the power plants during the terms of the leases while providing capital to finance
its acquisition. In August 2002, Midwest Generation exercised its option and repurchased the Illinois peaker units.

Midwest
Generation currently owns or leases 9,287 MW, consisting of the following:



In
connection with the acquisition of these power generation assets, Midwest Generation entered into three five-year power purchase agreements for the coal-fired
stations, the Collins Station, and the peaker stations, with Commonwealth Edison. Subsequently, Commonwealth Edison assigned its rights and obligations under these power purchase agreements to Exelon
Generation. Midwest Generation derived 99% of its energy and capacity revenues from Exelon Generation under these power purchase agreements for all three years ended December 31, 2002, 2001 and
2000. Midwest Generation has entered into a contract with a marketing affiliate to market energy that is to be sold into the wholesale

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market as permitted under the power purchase agreements, to engage in hedging activities and to provide scheduling and other services. The marketing affiliate also purchases fuel, other than coal,
and enters into fuel hedging arrangements on Midwest Generation's behalf.

Under
the terms of the power purchase agreements with Exelon Generation, Midwest Generation receives significantly higher capacity payments during June through September, the summer
months. In addition, due to higher electric demand resulting from warmer weather during the summer months, electric revenues are substantially higher during the third quarter. Accordingly, Midwest
Generation's operating results are substantially higher during these months and lower, including expected losses, during non-summer months.

Current Developments

A number of significant developments during late 2001 and 2002 have adversely affected independent power producers and subsidiaries of major integrated energy
companies that sell a sizable portion of their generation into the wholesale energy market (sometimes referred to as merchant generators). These developments included lower market prices in U.S.
wholesale energy markets, significant declines in the credit ratings of most major market participants, decreased availability of debt financing or refinancing, and a resulting decline of liquidity in
the energy markets due to growing concern about the ability of counterparties to perform their obligations. In response to these developments, many merchant generators and power trading firms have
announced plans to improve their financial position through asset sales, the cancellation or deferral of substantial new development, significant reductions in or elimination of trading activities,
decreases in capital expenditures, including cancellations of orders for new turbines, and reductions in operating costs. In early 2003, wholesale energy prices in the
MAIN region have increased primarily due to colder-than-normal weather and increases in the prices for natural gas. However, the recent changes in wholesale energy prices may
or may not continue throughout 2003. See "Market Risk Exposures" for more information regarding forward market prices.

Midwest Generation's Situation

Midwest Generation's plants were largely unaffected by these developments in 2002 because Exelon Generation was under contract with Midwest Generation to buy
substantially all of the capacity of its units during the entire year. However, as permitted by the power purchase agreements, Exelon Generation has advised Midwest Generation that it will not
purchase under contract 2,684 MW of capacity from Midwest Generation's coal-fired units and 1,864 MW of capacity from Midwest Generation's Collins Station and small peaking units for 2003
and 2004. Exelon Generation has the further right to release 1,265 MW of the capacity from Midwest Generation's coal-fired units and 1,778 MW of capacity from Midwest Generation's Collins
Station and small peaking units for 2004. As a result, beginning in 2003, the portion of Midwest Generation's generation that will be sold into the wholesale markets has significantly increased,
thereby increasing its merchant risk. As a result of these and other factors, both Moody's Investor Service and Standard & Poor's Rating Service downgraded Midwest Generation's credit rating
and the credit ratings of Midwest Generation's parent, Edison Mission Midwest Holdings, and Midwest Generation's indirect parent, EME, to below investment grade. See "Credit Ratings."

As
of December 31, 2002, Midwest Generation had $5.6 billion of debt and lease financings, including $911 million of debt maturing in December 2003. Midwest
Generation's debt obligations to Edison Mission Overseas Co. are on terms matching those of a credit agreement between Edison Mission Midwest Holdings and commercial lenders. Midwest Generation is a
guarantor of Edison Mission Midwest Holdings' obligations, which include $911 million of debt maturing in December 2003 that will need to be repaid, extended or refinanced. Edison
Mission Midwest Holdings is not expected to have sufficient cash to repay the $911 million debt due in December 2003, and there is no assurance

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that it will be able to extend or refinance this debt obligation on similar terms and rates as the existing debt, on commercially reasonable terms, on the terms permitted under the financing
documents entered into by MEHC in July 2001 or at all. Midwest Generation's independent accountants' audit opinion for the year ended December 31, 2002 contains an explanatory paragraph
that indicates the financial statements have been prepared on the basis that Midwest Generation will continue as a going concern and that uncertainty about Edison Mission Midwest Holdings' ability to
repay, extend or refinance its obligation raises substantial doubt about Midwest Generation's ability to continue as a going concern. Accordingly, the financial statements do not include any
adjustments that might result from the resolution of this uncertainty. Within Item 8, see "Report of Independent Accountants," "Notes to Financial StatementsNote 5.
Long-Term Debt" and "Notes to Financial StatementsNote 10. Lease Commitments."

Against
this background, Midwest Generation has undertaken actions to reduce its commitments and expenditures, thereby improving its cash flow. These actions included:



For
a discussion of risk factors that affect Midwest Generation's business and Midwest Generation's current financial condition, see "Risk Factors" and
"Liquidity and Capital Resources."

Results of Operations

Operating Revenues

Operating revenues increased $91.2 million in 2002 compared to 2001 and decreased $31.7 million in 2001 compared to 2000. The 2002 increase is due
to higher generation and energy prices, increased capacity revenue from higher availability, and lower losses from price risk management activities. The 2001 decrease is primarily due to losses from
price risk management activities. Virtually all of Midwest Generation's energy and capacity sales were made to Exelon Generation under the power purchase agreements. For the past three years, 99% of
Midwest Generation's total capacity and energy revenues were derived under its three power purchase agreements with Exelon Generation.

Midwest
Generation's coal plants sold 27,574 GWh, 26,627 GWh and 27,117 GWh of electricity during 2002, 2001 and 2000, respectively, and had availability factors of 84.8%, 82.9% and
79.6% during these periods. The availability factor is determined by the number of megawatt-hours the coal plants are available to generate electricity divided by the product of the capacity of the
coal plants (in megawatts) and the number of hours in the period. The coal plants are not available during periods of planned and unplanned maintenance. Midwest Generation generally refers to
unplanned maintenance as a forced
outage. Midwest Generation's coal plants had a forced outage rate of 6.5%, 9.5% and 9.8% during 2002, 2001 and 2000, respectively.

The
weighted average price for energy sold from the coal plants was $16.89/MWh, $16.06/MWh and $15.43/MWh in 2002, 2001 and 2000, respectively. The 2002 and 2001 increases in the
weighted average price for energy were due to capacity and energy price escalation from the power purchase agreement with Exelon Generation.

27

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Loss
from price risk management activities was $1.3 million and $21.3 million in 2002 and 2001, respectively. The 2002 loss was primarily due to the realized loss
recognized on the futures contracts discussed below that expired in August 2002. The 2001 loss primarily resulted from the change in market value of futures contracts with respect to a portion
of anticipated fuel purchases through 2002 that did not qualify for hedge accounting under SFAS No. 133. Income from price risk management activities was $5.7 million in 2000. The 2000
income resulted from a gain realized for calendar year 2001 financial options entered into beginning August 2000 as a hedge of Midwest Generation's price risk associated with expected natural
gas purchases at the plants. During the fourth quarter of 2000, Midwest Generation determined that it was no longer probable that it would purchase natural gas at the plants during 2001. This decision
resulted from sustained gas prices far greater than were contemplated when Midwest Generation originally projected its 2001 gas needs and the fact that it can use fuel oil interchangeably with natural
gas at some of its plants.

Operating Expenses

Operating expenses decreased $6.9 million in 2002 compared to 2001 and increased $17.3 million in 2001 compared to 2000. Operating expenses consist
of expenses for fuel, plant operations, depreciation and amortization and administrative and general expenses. The change in the components of operating expenses is discussed below.

Fuel
costs increased $41.9 million in 2002 compared to 2001, and decreased $49.6 million in 2001 compared to 2000. The 2002 increase was primarily due to increased coal
generation and increased coal prices offset by lower fuel prices at the Collins Station. The 2001 decrease is primarily due to lower fuel prices and proceeds from the sale of SO2 allowances to an
affiliate.

Plant
operations expenses decreased $52.7 million in 2002 compared to 2001, and increased $60.1 million in 2001 compared to 2000. The 2002 decrease was primarily due to
maintenance and security costs that were lower in 2002 compared to 2001 due to a strike during June through October 2001 offset by approximately $4.6 million of severance expense
recorded in 2002 due to cost reduction programs. In addition, rent expense related to the Illinois peaker power units synthetic lease was lower in 2002
compared to 2001 due to a decline in variable lease costs tied to changes in interest rates and from the termination of the synthetic lease in August 2002. The 2001 increase in plant operations
expense was primarily due to planned maintenance costs that were accelerated during the strike and costs of additional security related to the strike.

Asset
impairment and other charges in 2002 consisted of a $25.4 million impairment charge during the third quarter of 2002 for the write-off of capitalized costs
associated with the suspension of capital improvements at the Powerton Station and a $44.9 million loss during the fourth quarter of 2002 for future payments owed under the Chicago
In-City Obligation. See "Contractual Obligations, Commitments and ContingenciesChicago In-City Obligation," for additional information.

The
settlement of postretirement employee benefit liability in 2002 related to a retirement health care and other benefits plan for union-represented employees that expired on
June 15, 2002. In October 2002, Midwest Generation reached an agreement with its union-represented employees on new benefits plans, which extend from January 1, 2003 through
June 30, 2005. Midwest Generation continued to provide benefits at the same level as those in the expired agreement until December 31, 2002. The accounting for postretirement benefit
liabilities has been determined on the basis of a substantive plan under Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions." A substantive plan means that Midwest Generation assumed, for accounting purposes, that it would provide for postretirement healthcare benefits to union-represented employees following
conclusion of negotiations to replace the current benefits agreement, even though Midwest Generation had no legal obligation to do so. Under the new agreement, postretirement healthcare benefits will
not be provided. Accordingly, Midwest Generation

28

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treated this as a plan termination under SFAS No. 106 and recorded a pre-tax gain of $70.7 million during the fourth quarter of 2002.

Depreciation
and amortization expense increased $8.9 million in 2002 compared to 2001, and decreased $1.0 million in 2001 compared to 2000. The 2002 increase was primarily
due to the $300 million purchase of the peaker power units in August 2002 that were previously subject to the synthetic lease, in addition to other recurring capital expenditure
additions. Depreciation expense primarily relates to the acquisition of the power generation assets Midwest Generation purchased from Commonwealth Edison that are being depreciated over periods
ranging from 20 to 40 years and the peaker power units that are being depreciated over 15 years, effective August 2002. The amortization expense relates to the Powerton-Joliet
facilities sale-leaseback and the Collins Station sale-leaseback which are being amortized over the term of the leases.

Administrative
and general expenses decreased $4.8 million in 2002 compared to 2001, and increased $7.8 million in 2001 compared to 2000. The 2002 decrease was primarily
due to a $4.3 million bad debt allowance related to gas purchases with Enron Corp. that was recognized in 2001. The 2001 increase was primarily due to the same bad debt allowance and an
increase in the administrative services charge from Midwest Generation's parent due to higher levels of legal and labor costs.

Other Income (Expense)

|                                  |                     | Years Ended December 31, |         
|--------------------------------- | ------------------- | ------------------------ | --------
|
|
|Interest income and other expense |                     | (510                     | )       
|Interest income from affiliate    |                     | 118,879                  |         
|Interest expense                  |                     | (118,940                 | )       
|Interest expense to affiliate     |                     | (227,066                 | )       
|                                  |                     |                          |         
|                                  | Total other expense |                          | (227,637
|                                  |                     |                          |         

Interest
income from affiliate decreased $10.8 million in 2002 compared to 2001, and increased $78.7 million in 2001 compared to 2000. The 2002 decrease was due to lower
interest rates on the variable rate notes to EME and due to the repayment received from EME in August 2002 on the $300 million note in connection with Midwest Generation's purchase of
the peaker power units. The 2001 increase was due to a full year of interest earned on the EME notes in 2001 compared to a partial year in 2000 since the notes originated from the lease financing
transactions completed in July and August 2000.

Interest
expense decreased $12.5 million in 2002 compared to 2001, and increased $42.8 million in 2001 compared to 2000. Interest expense relates to the lease financings of
the Collins, Powerton and Joliet Stations. The 2002 decrease was due to lower interest rates on the variable component of the Collins lease financing. In 2001, interest expense increased due to the
fact that the lease financings were completed in July and August 2000.

Interest
expense to affiliate decreased $29.9 million in 2002 compared to 2001, and decreased $15.6 million in 2001 compared to 2000. Interest expense to affiliate relates
to borrowings from Edison Mission Overseas Co., a wholly owned subsidiary of Midwest Generation's parent, under subordinated loan agreements. The 2002 decrease was primarily due to lower interest
rates on the variable rate loan for the majority of 2002. The 2001 decrease was also primarily due to lower interest rates on the variable rate loan in 2001 compared to 2000.

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Benefit For Income Taxes

Midwest Generation had effective income tax benefit rates of 37.6%, 36.6% and 39.0% in 2002, 2001 and 2000, respectively. The effective tax rates were different
from the federal statutory rate of 35% due to state income taxes. The income tax benefit results from the tax-allocation agreement with Midwest Generation's parent, Edison Mission Midwest
Holdings.

Net Loss

Midwest Generation generated net losses for all three years ended December 31, 2002, 2001 and 2000. Although Midwest Generation expects to generate cash
flow from operations, it expects to incur losses after depreciation, amortization and interest expense for several years. Midwest Generation's future results of operations will depend primarily on
revenues from the sale of energy, capacity and other related products, and the level of its operating expenses.

Related Party Transactions



Midwest Generation entered into a Master Purchase, Sale and Services Agreement with its marketing affiliate effective March 23, 2001, pursuant to which
Midwest Generation's marketing affiliate arranges for purchases and sales of the following products, including services related thereto: (i) electric energy and capacity; (ii) natural
gas; (iii) fuel oil; and (iv) emissions allowances.

Midwest
Generation compensates its marketing affiliate in accordance with the following table with respect to these transactions, and reimburses its marketing affiliate for brokers fees,
taxes, and other
reasonably incurred direct out-of-pocket expenses. Payment for these services is due within 30 days of billing.

Service

CompensationElectric energy and/or capacity

$.02/MWh ($.02/MW-day for capacity)Natural gas

$.02/MMBtuFuel oil

$.05/bblEmissions allowances

$.25/SO2 allowance;
and $25/NOx allowance


The
net fees earned by the marketing affiliate were $1.2 million, $0.9 million and $1.5 million for the years ended December 31, 2002, 2001 and 2000,
respectively. The amount due from the marketing affiliate was $6.5 million and $5.7 million at December 31, 2002 and 2001, respectively.

Midwest
Generation also entered into several transactions through its marketing affiliate to sell or purchase surplus SO2 or NOx allowances to other EME affiliates. All transactions were
completed at market price on the date of the transaction. Net consideration received was $5.0 million and $10.2 million during 2002 and 2001, respectively.



Proceeds arising from the Powerton-Joliet sale-leaseback transaction were used by Midwest Generation to make a loan to EME. The loan is evidenced by
four intercompany notes amounting to $1.367 billion. EME is obligated to repay the principal on the notes in a series of installments on the dates and in the amounts set forth on a schedule to
each note. EME has paid and is required to pay interest on the notes on each January 2 and July 2 at an 8.30% fixed interest rate. All amounts due under the notes are due to be repaid in
full on January 2, 2016. Midwest Generation earned interest income of $118.9 million, $129.6 million, and $50.9 million during 2002, 2001 and 2000, respectively. In
addition to the four intercompany notes above relating to the Powerton-Joliet sale-leaseback, Midwest

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Generation loaned EME $300 million from the sale-leaseback of the peaker power units. EME paid off the $300 million note in August 2002 in connection with Midwest
Generation's repurchase of the peaker power units. For more information on the sale-leasebacks, see "Contractual Obligations, Commitments and Contingencies."



Edison Mission Midwest Holdings used the proceeds of the loan under the credit agreement that it entered into in December 1999 (a total of approximately
$1.8 billion) to make an equity investment in its wholly owned subsidiary, Edison Mission Overseas Co., which in turn lent the money to Midwest Generation. Edison Mission Overseas and Midwest
Generation entered into a subordinated loan agreement with terms matching the terms of Edison Mission Midwest Holdings' credit agreement. Under the terms of the subordinated loan agreement, Midwest
Generation is required to make payments to Edison Mission Overseas similar to those payments made by Edison Mission Midwest Holdings under its credit agreement. The obligations of Edison Mission
Midwest Holdings are guaranteed by Midwest Generation. As of December 31, 2002, the borrowings of Midwest Generation under the subordinated loan agreement were approximately
$1.7 billion; of which a total of $911 million matures in December 2003. In December 1999, Midwest Generation also entered into a subordinated revolving loan agreement with
Edison Mission Overseas for up to $2 billion, which was subsequently increased to $2.5 billion. See "Notes to Financial StatementsNote 5. Long-Term Debt,"
for more information about these loan agreements.



Midwest Generation is included in the consolidated federal and state income tax returns of Edison International and is party to a tax-allocation
agreement with its parent, Edison Mission Midwest Holdings. As long as Edison International continues to own, directly or indirectly, at least 80% of the voting power of the stock of EME and its
existing subsidiaries and at least 80% of the value of such stock, Midwest Generation will be included in the consolidated federal and state income tax returns of Edison International. In accordance
with the agreement and the tax-allocation procedures that have been in effect since Midwest Generation's formation, its current tax liability or benefit is generally determined on a
separate return basis, except for calculating consolidated state income taxes, for which Midwest Generation uses the long-term state tax apportionment factors of the Edison International
group. Also, while Midwest Generation is generally subject to separate return limitations for net losses, under the tax-allocation agreement it is permitted to transfer to Edison Mission
Midwest Holdings, or its subsidiaries, net operating loss benefits which would not yet be realized in a separate return in exchange for a reduction in Midwest Generation's intercompany account
balances (including subordinated loans).



Certain administrative services, such as payroll, employee benefit programs, insurance and information technology are shared among all affiliates of Edison
International, and the costs of these corporate support services are allocated to all affiliates. The cost of services provided by Edison International and EME, including those related to Midwest
Generation, are allocated based on one of the following formulas: percentage of the time worked, equity in investment and advances, number of employees, or multi-factor (operating revenues, operating
expenses, total assets and total employees). Midwest Generation participates in a common payroll and benefit program with all Edison International employees. In addition, Midwest Generation is billed
for any direct labor and out-of-pocket expenses for services directly requested for its benefit. Midwest Generation believes the allocation methodologies are reasonable. Costs
incurred for these programs, payroll funding, and other

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services during the years ended December 31, 2002, 2001 and 2000 were $124.7 million, $127.4 million and $149.4 million, respectively.

Midwest
Generation participates in the insurance program of Edison International, including property, general liability, workers compensation and various other specialty policies.
Midwest Generation's insurance premiums are generally based on its share of risk related to each policy. In connection with the property insurance program, a portion of the risk is reinsured by a
captive insurance subsidiary of Edison International.

Midwest
Generation recorded a receivable from EME of $169.9 million December 31, 2001 related to the tax due under the tax-allocation agreement. For the year
ended December 31, 2002, all outstanding receivables were realized through a reduction in amounts owed under Midwest Generation's affiliate subordinated loan agreement with Edison Mission
Overseas.



Midwest Generation EME, LLC is Midwest Generation's indirect parent in Illinois and provides executive management, legal, human resources, accounting and other
administrative services in Chicago on Midwest Generation's behalf without charge. In connection with regulations of the Securities and Exchange Commission, the costs of these services must be recorded
as part of Midwest Generation's financial results, although Midwest Generation does not have a cash obligation to pay for these activities. The costs of these services, after tax, were
$10.6 million, $11.3 million and $7.8 million for the periods ended December 31, 2002, 2001 and 2000, respectively. Midwest Generation has reflected these activities as a
non-cash contribution of services by its parent in the accompanying financial statements.



Midwest Generation entered into an agreement with its indirect parent, Midwest Generation EME, LLC to provide support services, including construction and
construction management, operations and maintenance management, technical services and training, environmental, health and safety services, administrative and IT support, and other managerial and
technical services needed to operate and maintain electric power facilities. Under the terms of the agreement, Midwest Generation reimburses Midwest Generation EME for actual costs incurred by
functional area in providing support services, or in the case of specific tasks Midwest Generation requests, the amount negotiated for the task. Actual costs billable under this agreement for the
years ended December 31, 2002, 2001 and 2000 were $6.8 million, $7.0 million and $8.3 million, respectively.



Midwest Generation entered into agreements with Edison Mission Energy Services, Inc. to provide fuel and transportation services related to coal and fuel
oil. Under the terms of these agreements, Midwest Generation pays a service fee of $.06 for each ton of coal delivered and $.05 for each barrel of fuel oil delivered, plus the actual cost of the
commodities. The amount billable under this agreement for the years ended December 31, 2002, 2001 and 2000 was $1.1 million, $1.3 million and $1.0 million, respectively.

Critical Accounting Policies and Estimates

The accounting policies described below are viewed by management as "critical" because their correct application requires the use of material judgments and
estimates and they have a material impact on Midwest Generation's results of operations and financial position.

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Derivative Financial Instruments and Hedging Activities

Midwest Generation uses derivative financial instruments for price risk management activities for non-trading purposes. Derivative financial
instruments are mainly utilized to manage exposure from changes in electricity and fuel prices. Midwest Generation follows Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS No. 133), which requires derivative financial instruments to be recorded at their fair value unless an exception
applies. SFAS No. 133 also requires that changes in a derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. For derivatives that qualify
for hedge accounting, depending on the nature of the hedge, changes in fair value are either offset by changes in the fair value of the hedged assets, liabilities or firm commitments through earnings,
or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value is immediately recognized in earnings.

Management's
judgment is required to determine if a transaction meets the definition of a derivative and, if yes, whether the normal sales and purchases exception applies or whether
individual transactions qualify for hedge accounting treatment. The majority of Midwest Generation's power sales and fuel supply agreements related to its generation activities either: (1) do
not meet the definition of a derivative as they are not readily convertible to cash, (2) qualify as normal purchases and sales and are, therefore, recorded on an accrual basis, or
(3) qualify for hedge accounting.

Determining
the fair value of derivatives under SFAS No. 133 is a critical accounting estimate because the fair value of a derivative is susceptible to significant change
resulting from a number of factors, including: volatility of energy prices, credits risks, market liquidity and discount rates. See "Market Risk Exposures" for a description of risk
management activities and sensitivities to change in market prices.

Impairment

Long-Lived Assets.Midwest Generation follows Statement of Financial Accounting Standards No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS No. 144).Midwest Generation evaluates long-lived
assets whenever indicators of impairment exist. This accounting standard requires that if the undiscounted expected future cash flow from a company's assets or group of assets (without interest
charges) is less than its carrying value, asset impairment must be recognized in the financial statements. The amount of impairment is determined by the difference between the carrying amount and fair
value of the asset.

The
assessment of impairment is a critical accounting estimate because significant management judgment is required to determine: (1) if an indicator of impairment has occurred,
(2) how assets should be grouped, (3) the forecast of undiscounted expected future cash flow over the asset's estimated useful life to determine if an impairment exists, and
(4) if an impairment exists, the fair value of the asset or asset group. Factors Midwest Generation considers important, which could trigger an impairment, include operating losses, projected
future operating losses, the financial condition of counterparties or significant negative industry or economic trends. During the fourth quarter of 2002, Midwest Generation assessed the impairment of
its long-lived assets. Midwest Generation has grouped its assets into three asset groups: coal-fired power plants, the Collins Station, and the small peaker plants. Management
judgment was required to make this assessment based on the lowest level of cash flow that was viewed by management as largely independent of each other. The expected future undiscounted cash flow from
Midwest Generation's power plants is a critical accounting estimate
because: (1) estimating future prices of energy and capacity in wholesale energy markets is susceptible to significant change, and (2) the period of the forecast is over an extended
period of time due to the remaining estimated useful life (15 to 31 years) of power plants, and (3) the impact of an impairment

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on Midwest Generation's financial position and results of operations would be material. The expected undiscounted future cash flow from long-lived assets exceeded the carrying value of
those asset groups.

Idle Facilities.Due to lower wholesale prices for energy during 2002 (see "Market Risk Exposures"), Midwest
Generation has suspended operations at Units 1 and 2 at Will County and Units 4 and 5 at the Collins Station. Midwest Generation continues to record depreciation on such assets during the period that
Midwest Generation has suspended operations. Accounting for these units as idle facilities requires management's judgment that these units will return to service. Midwest Generation has continued the
maintenance of these units in order to return them to service when market conditions improve on a sustained basis and future environmental uncertainties are resolved. If market conditions do not
improve on a sustained basis, environmental uncertainties are not resolved or are resolved unfavorably, or if a decision is made not to return them to service due to other factors, Midwest Generation
could sell or decommission one or more of these units. Such a decision could result in a loss on sale or a write down of the carrying value of these assets.

Income Taxes

SFAS No. 109, "Accounting for Income Taxes" (SFAS No. 109), requires the asset and liability approach for financial accounting and reporting for
deferred income taxes. Midwest Generation uses the asset and liability method of accounting for deferred income taxes and provides deferred income taxes for all significant income tax temporary
differences. See "Notes to Financial StatementsNote 7. Income Taxes" for additional details.

As
part of the process of preparing its financial statements, Midwest Generation is required to estimate its income taxes in each of the jurisdictions in which it operates. This process
involves estimating actual current tax exposure together with assessing temporary differences resulting from differing treatment of items, such as depreciation, for tax and accounting purposes. These
differences result in deferred tax assets and liabilities, which are included within Midwest Generation's balance sheet.

For
additional information regarding Midwest Generation's accounting policies, see "Notes to Financial StatementsNote 2. Summary of Significant Accounting Policies."

Liquidity and Capital Resources

Historical

At December 31, 2002, Midwest Generation had cash and cash equivalents of $74.7 million compared to $52.6 million at December 31,
2001. Net working capital at December 31, 2002 was $(853.3) million compared to $233.5 million at December 31, 2001. The change in working capital is the result of the
classification of $911 million of debt as a current liability due December 2003. Net cash provided by operating activities was $171.4 million in 2002. Net cash used in operating
activities was $39.1 million in 2001. Net cash provided by operating activities was $93.1 million in 2000. The changes in cash provided by operating activities are due to the timing of
working capital items.

Net
cash used in financing activities totaled $77.7 million in 2002. Net cash provided by financing activities totaled $132.3 million in 2001 and $1.4 billion in
2000. In 2002, Midwest Generation generated operating cash flow which enabled the paydown of debt. In 2001, Midwest Generation required debt financing to meet operating cash obligations and capital
expenditures. In 2000, Midwest Generation received $1.367 billion of proceeds from the Powerton-Joliet sale-leaseback which were used to make a loan to EME.

Net
cash used in investing activities totaled $71.6 million in 2002, $56.3 million in 2001 and $1.5 billion in 2000. In 2002, Midwest Generation received payment in
full for the $300 million loan to EME, repurchased the Illinois peaker power units and made upgrades to plant equipment. In 2001,

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Midwest Generation made upgrades to plant equipment. In 2000, Midwest Generation loaned $1.667 billion to EME, received proceeds of $300 million from the Illinois peakers
sale-leaseback and made upgrades to plant equipment following Midwest Generation's acquisition in 1999.

Purchase of Equipment Under Lease.On August 9, 2002, Midwest Generation exercised its option to purchase the Illinois
peaker power units that were subject to a lease with a third-party lessor. This operating lease was structured to maintain a minimum amount of equity (3% of the acquisition price) for the duration of
the lease term in accordance with existing guidance for leases involving special purpose entities (sometimes referred to as synthetic leases). In order to fund the purchase, Midwest Generation
received full payment of principal, interest and fees on its $300 million note receivable from EME, and then paid $300 million plus outstanding lease obligations to the owner-lessor.
These peaker units were recorded as assets and are being depreciated over their estimated useful lives of 15 years.

Current

Midwest Generation plans to spend approximately $53 million on capital expenditures for 2003. These capital expenditures are planned to be financed by cash
generated from operations. Midwest Generation's principal source of liquidity is cash on hand and future cash flow from operations. In addition, Midwest Generation has access to a $150 million
working capital facility through its parent.

Midwest
Generation had the following maturities of long-term debt to its affiliate at December 31, 2002:

Amount

Due Date(in millions)$
911.0

December 2003808.3

December 2004$
1,719.3


Midwest
Generation plans to extend or refinance the $911 million debt obligation at or prior to its expiration in December 2003, as part of its parent company's, Edison
Mission Midwest Holdings', refinancing plans. See "Notes to Financial StatementsNote 5. Long-Term Debt," for more information. Completion of this extension or
refinancing is subject to a number of uncertainties, including the ability of Midwest Generation to generate funds during 2003 and the availability of credit from financial institutions on acceptable
terms in light of industry conditions. Accordingly, there is no assurance that Edison Mission Midwest Holdings will be able to extend or refinance this debt when it becomes due or that the terms will
not be substantially different from those under the current credit facility. See "Risk Factors."

Edison Mission Midwest Holdings Credit Facility Covenants

Midwest Generation's parent company, Edison Mission Midwest Holdings, is the borrower under a $1.869 billion credit facility with a group of commercial
banks. Midwest Generation has guaranteed its parent company's obligations under this credit facility. The funds borrowed under this facility were used to fund Midwest Generation's original acquisition
and provide working capital to its operations. As part of the original acquisition, Midwest Generation entered into a sale-leaseback transaction for the Collins
Station and then subsequently entered into sale-leaseback transactions for the Powerton Station and the Joliet Station in August 2000. In order for Edison Mission Midwest Holdings
to make a distribution, Edison Mission Midwest Holdings and Midwest Generation must be in compliance with the covenants specified in these agreements, including maintaining a minimum credit rating.
Due to the downgrade of the credit rating of Edison Mission Midwest Holdings to below investment grade, no distributions can

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currently be made by Edison Mission Midwest Holdings to its parent company, and ultimately, to EME at this time. See "Credit Ratings."

Edison
Mission Midwest Holdings must maintain a debt service coverage ratio for the prior twelve-month period of at least 1.50 to 1 as long as the power purchase agreements with Exelon
Generation represent 50% or more of Edison Mission Midwest Holdings' and its subsidiaries' revenues. If the power purchase agreements with Exelon Generation represent less than 50% of Edison Mission
Midwest Holdings' and its subsidiaries' revenues, it must maintain a debt service coverage ratio of at least 1.75 to 1. Midwest Generation expects that revenues for 2003 from Exelon Generation will
represent 50% or more of its revenues. In addition, Edison Mission Midwest Holdings must maintain a debt-to-capital ratio no greater than 0.60 to 1. Failure to meet the
historical debt service coverage ratio and the debt-to-capital ratio are events of default under the credit agreement and Collins lease agreements, which, upon a vote by a
majority of the lenders could cause an acceleration of the due date of the obligations of Edison Mission Midwest Holdings and those associated with the Collins lease. Such an acceleration could result
in an event of default under the Powerton and Joliet leases. During the 12 months ended December 31, 2002, the historical debt service coverage ratio was 4.04 to 1 and the
debt-to-capital ratio was 0.51 to 1.

There
are no restrictions on the ability of Midwest Generation to make payments on the outstanding intercompany loans from its affiliate, Edison Mission Overseas (which is also a
subsidiary of Edison Mission Midwest Holdings) or to make distributions directly to Edison Mission Midwest Holdings.

Credit Ratings

Downgrade of Midwest Generation and its Parent, Edison Mission Midwest Holdings

Midwest Generation has guaranteed the obligations of its parent, Edison Mission Midwest Holdings, under a $1.869 billion credit facility. On
October 1, 2002, Moody's downgraded Edison Mission Midwest Holdings' bank facility rating to Ba2 from Baa2 and Midwest Generation's lessor notes rating to Ba3 from Baa3. These ratings remain
under review for possible further downgrade. On November 25, 2002, Standard & Poor's downgraded the credit rating on Midwest Generation's lessor notes to BB- (below
investment grade) from BBB- (investment grade). Standard & Poor's also lowered its credit rating on Midwest Generation's parent, Edison Mission Midwest Holdings (bank facility,
guaranteed by Midwest
Generation, to BB- from BBB-). Standard & Poor's has assigned a negative rating outlook for each of the entities that were downgraded.

As
a result of the downgrades of Edison Mission Midwest Holdings below investment grade, provisions in the agreements binding on Edison Mission Midwest Holdings and Midwest Generation
restrict the ability of Edison Mission Midwest Holdings to make distributions to its parent company, and ultimately to EME. There are no limitations on Midwest Generation's ability to pay intercompany
loans or make distributions to Edison Mission Midwest Holdings or Edison Mission Overseas.

The
following table summarizes the provisions restricting cash distributions (sometimes referred to as cash traps) and the related changes in the cost of borrowing by Edison Mission
Midwest Holdings

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under the applicable financing agreements. The currently applicable provisions are those set forth in the same row as the Standard & Poor's rating "BB-."

|S&P Rating     |  | Moody's Rating |  | Cost of Borrowing Margin |  | Cash Trap                                                                                               
|-------------- |  | -------------- |  | ------------------------ |  | --------------------------------------------------------------------------------------------------------
|
|BBB- or higher |  | Baa3 or higher |  | 150                      |  | No cash trap                                                                                            
|BB+            |  | Ba1            |  | 225                      |  | 50% of excess cash flow trapped until six month debt service reserve is funded                          
|BB             |  | Ba2            |  | 275                      |  | 100% of excess cash flow trapped                                                                        
|BB-            |  | Ba3            |  | 325                      |  | 100% of excess cash flow trapped                                                                        
|B+             |  | B1             |  | 325                      |  | 100% cash sweep by lenders to repay debt (i.e., 100% of excess cash flow trapped and used to repay debt)

As
a result of the downgrades affecting Edison Mission Midwest Holdings, provisions in the agreements binding on Edison Mission Midwest Holdings require it to deposit, on a quarterly
basis, 100% of its defined excess cash flow into a cash flow recapture account held and maintained by the collateral agent. On October 31, 2002, Edison Mission Midwest Holdings deposited
$50.3 million into the cash flow recapture account in accordance with these provisions and deposited another $27.6 million on January 27, 2003. The funds in the cash flow
recapture account may be used only to meet debt service obligations of Edison Mission Midwest Holdings, which Midwest Generation has guaranteed, if funds are not otherwise available from working
capital. The deposit of funds into this account limits the amount of funds that would otherwise be available by Edison Mission Midwest Holdings to lend to Midwest Generation to meet working capital
requirements.

The
increase in the cost of the borrowings of Edison Mission Midwest Holdings resulted in an increase in Midwest Generation's cost of borrowing under its long-term debt with
Edison Mission Overseas, as the terms and conditions of Midwest Generation's loan agreement with Edison Mission Overseas mirror the terms of Edison Mission Midwest Holdings' credit agreement. Midwest
Generation estimates its annual increase in interest and lease costs as a result of both the Moody's and Standard & Poor's rating downgrades to be $46.1 million based on existing debt
and lease agreements as compared to the cost of borrowing margins prior to the downgrades.

Downgrade of Edison Mission Energy

On October 1, 2002, Moody's downgraded EME's senior unsecured rating to Ba3 (below investment grade) from Baa3 (investment grade). This rating remains
under review for possible further downgrade. On November 25, 2002, Standard & Poor's downgraded EME's senior unsecured rating to BB- (below investment grade) from
BBB- (investment grade). Standard & Poor's has assigned a negative rating outlook for EME.

As
part of the sale-leaseback of the Powerton and Joliet Stations, Midwest Generation loaned the proceeds (in the amount of $1.367 billion) to EME in exchange for
promissory notes in the same aggregate amount. Debt service payments by EME on the promissory notes may be used by Midwest Generation to meet its payment obligations under these leases in whole or
part. Furthermore, EME has guaranteed Midwest Generation's lease obligations under these leases. EME's obligations under the promissory notes payable to Midwest Generation are general corporate
obligations of EME and are not contingent upon receiving distributions from its subsidiaries. Accordingly, EME is still obligated to continue to make payments under the intercompany loans from Midwest
Generation, notwithstanding EME's inability to receive distributions from Edison Mission Midwest Holdings as a result of the downgrade. Since Edison Mission Midwest Holdings is restricted from making
distributions to EME, EME needs to generate sufficient cash flow from other subsidiaries or sources in excess of its interest

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and overhead costs to continue to make payments under the intercompany loans from Midwest Generation. There is no assurance that EME will have sufficient cash flow to meet these obligations. If
Midwest Generation does not receive payment on the intercompany loans from EME, Midwest Generation may be unable to meet its lease obligations under the Powerton and Joliet leases. This would result
in an event of default under the Powerton and Joliet leases and in a cross-default under the Collins Lease and credit agreement of Edison Mission Midwest Holdings, which Midwest Generation has
guaranteed. These events would have a material adverse effect on Midwest Generation.

Credit Support for Price Risk Management Activities

Midwest Generation has entered into a contract with a marketing affiliate, Edison Mission Marketing & Trading, for the sale of energy and capacity not
contracted to Exelon Generation and for the purchase of fuel, which enables this marketing affiliate to engage in forward sales and hedging. Under this contract, Midwest Generation pays the marketing
affiliate fees of $0.02/MWh plus emission allowance fees. EME has provided guarantees to support Edison Mission Marketing & Trading's operations, including contracts with third parties, for the
marketing of Midwest Generation's power pursuant to Midwest Generation's marketing agreement. Following the Moody's and Standard & Poor's downgrades of EME's credit rating, EME provided
$52 million (as of March 21, 2003) in cash collateral and letters of credit for the benefit of counterparties and could be required to provide additional collateral in the future. It is
likely that much of Edison Mission Marketing & Trading's transactions in the near future will be supported by letters of credit and cash collateral instead of guarantees by EME. Midwest
Generation may provide collateral to support bilateral contracts for power and fuel to the extent that any such transactions relate to Midwest Generation's merchant energy operations. Depending on
market conditions and the volume and duration of forward sales, there is no assurance that EME and Midwest Generation will be able to provide credit support to Edison Mission Marketing &
Trading in amounts sufficient to support all of Midwest Generation's merchant activity. See "Risk Factors."

Contractual Obligations, Commitments and Contingencies

The following table summarizes Midwest Generation's contractual obligations and commercial commitments as of December 31, 2002.

|                            |                                    | 2003 |       | 2004    |   | 2005  |         | 2006 |       | 2007  |   | Thereafter |       | Total
|--------------------------- | ---------------------------------- | ---- | ----- | ------- | - | ----- | ------- | ---- | ----- | ----- | - | ---------- | ----- | -----
|
|Contractual Obligations     |                                    |      |       |         |   |       |         |      |       |       |   |            |       |      
|Long-term debt to affiliate |                                    | $    | 911.0 |         | $ | 808.3 |         | $    |      |       | $ |           |       | $    
|Lease financings            |                                    |      | 137.8 |         |   | 149.4 |         |      | 191.4 |       |   | 275.2      |       |      
|Operating lease obligations |                                    |      | 14.4  |         |   | 13.8  |         |      | 11.4  |       |   | 10.9       |       |      
|Chicago In-City obligation  |                                    |      | 22.3  |         |   | 1.5   |         |      | 1.5   |       |   | 1.5        |       |      
|Fuel supply contracts       |                                    |      | 276.9 |         |   | 135.4 |         |      | 130.8 |       |   | 132.8      |       |      
|                            |                                    |      |       |         |   |       |         |      |       |       |   |            |       |      
|                            | Total Contractual Cash Obligations |      | $     | 1,362.4 |   | $     | 1,108.4 |      | $     | 335.1 |   | $          | 420.4 |      
|                            |                                    |      |       |         |   |       |         |      |       |       |   |            |       |      
|Commercial Commitments      |                                    |      |       |         |   |       |         |      |       |       |   |            |       |      
|Capital improvements        |                                    | $    | 23.5  |         | $ |      |         | $    |      |       | $ |           |       | $    
|                            |                                    |      |       |         |   |       |         |      |       |       |   |            |       |      

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Long-term Debt to Affiliate

In connection with the acquisition of its power generation assets, Midwest Generation obtained two loans from an affiliate, Edison Mission Overseas. The terms of
the subordinated loan agreement with Edison Mission Overseas mirror the terms and conditions of Edison Mission Midwest Holdings' credit agreement with principal payments due in December 2003
and 2004. The subordinated revolving loan agreement with Edison Mission Overseas is due in 2034 with no scheduled principal repayment prior to its maturity. These loans are subordinate to Midwest
Generation's lease rent obligations as well as its obligation as a guarantor under Edison Mission Midwest Holdings' credit agreement. See "Results of OperationsRelated Party
TransactionsLoan Agreements with Edison Mission Overseas Co." for additional discussion.

Lease Financing Obligations

Collins Station Lease.In connection with the acquisition of the power generation assets from Commonwealth Edison, Midwest
Generation assigned the right to purchase the Collins gas and oil-fired power plant to four third-party lessors. The third parties purchased the Collins Station for an aggregate price of
$860 million and entered into leases of the plant with an affiliate of Midwest Generation. Midwest Generation's affiliate entered into subleases with Midwest Generation. The subleases, which
are being accounted for as a lease financing, each have an initial term of 33.75 years with payments due on a quarterly basis. If a lessor intends to sell its interest in the Collins Station,
Midwest Generation has a right of first refusal to acquire the interest at fair market value.

The
owner/lessor under the Collins lease issued notes in the amount of the lessor debt to Midwest Funding LLC, a funding vehicle created and controlled by the owner/lessor. These notes
mature in January 2014 and are referred to as the lessor notes. Midwest Funding LLC, in turn, entered into a commercial paper and loan facility with a group of banks pursuant to which it
borrowed the funds required for its purchase of the lessor notes. These borrowings are currently scheduled to mature in December 2004 and are referred to as the lessor borrowings.

The
rent under the Collins lease includes both a fixed component and a variable component, which is affected by movements in defined interest rate indices. If the lessor borrowings are
not repaid at maturity, by a refinancing or otherwise, the interest rate on them would increase at specified increments every three months, which would be reflected in adjustments to the Collins lease
rent payments. Under the Collins lease, Midwest Generation may request the owner/lessor to cause Midwest Funding LLC to refinance the lessor borrowings in accordance with guidelines set forth in the
lease, but such refinancing is subject to the owner/lessor's approval. If the lessor borrowings are not refinanced by December 2004 because the owner/lessor's approval is not obtained or a
refinancing is not commercially available, rent under the Collins lease would increase by approximately $9 million for the first quarter of 2005 and increase approximately $2 million for
each quarter thereafter.

Powerton and Joliet Facilities Sale-Leaseback.In August 2000, Midwest Generation entered into a
sale-leaseback transaction with respect to the Powerton and Joliet power facilities to third-party lessors for an aggregate purchase price of $1.367 billion. Midwest Generation
loaned the proceeds from the sale of the facilities to EME. Under the terms of the leases (33.75 years for Powerton and 30 years for Joliet), Midwest Generation makes
semi-annual lease payments on each January 2 and July 2, which began January 2, 2001. EME guarantees Midwest Generation's payments under the leases. If a lessor
intends to sell its interest in the Powerton or Joliet power facility, Midwest Generation has a right of first refusal to acquire the interest at fair market value. Under the terms of each lease,
Midwest Generation may request a lessor, at its option, to refinance the lessor debt, which, if completed, would affect the base lease rent. Midwest Generation makes lease payments from the principal
and interest payments it receives on the loans to EME as well as Midwest Generation's cash flow from operating activities. Midwest Generation is also required to pay operating expenses and other
expenses, including

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interest on and principal of its subordinated loans. The gain on the sale of the power facilities has been deferred and is being amortized over the term of the leases. For more information on Midwest
Generation's loans to EME, see "Risk Factors."

In
the event of a default under the leases, each lessor can exercise all of its rights under the applicable lease, including repossessing the power plant and seeking monetary damages.
Each lease sets forth a termination value payable upon termination for default and in certain other circumstances, which generally declines over time and in the case of default may be reduced by the
proceeds arising from the sale of the repossessed power plant. A default under the terms of the Collins or Powerton and Joliet leases could result in a loss of Midwest Generation's ability to use such
power plant and would have a material adverse effect on Midwest Generation's results of operations and financial position.

Fuel Supply Contracts

Midwest Generation has entered into several fuel purchase agreements with various third-party suppliers for the purchase and/or transport of coal and fuel oil.
The contracts range from one year to ten years in length. The minimum commitments are based on the contract provisions, which consist of fixed prices, subject to adjustment clauses.

Chicago In-City Obligation

Pursuant to the acquisition documents for the purchase of generating assets from Commonwealth Edison, Midwest Generation committed to install one or more
gas-fired electric generating units having an additional gross dependable capacity of 500 MW at or adjacent to an existing power plant site in Chicago, this commitment being referred to as
the In-City Obligation, for an estimated cost of $320 million. The acquisition documents required that commercial operation of this project commence by December 15, 2003. Due
to additional capacity for new gas-fired generation in the Mid-America Interconnected Network, generally referred to as the MAIN Region, and the improved reliability of power
generation in the Chicago area, Midwest Generation did not believe the additional gas-fired generation was needed. In February 2003, Midwest Generation finalized an agreement with
Commonwealth Edison to terminate this commitment in exchange for the following:



As
a result of this agreement with Commonwealth Edison, Midwest Generation recorded a loss of $45 million during the fourth quarter of 2002. The loss was determined by the sum of:
(a) the present value of the cash payments to both Commonwealth Edison and Calumet Energy Team LLC (capacity payments), less (b) the fair market value of the option to purchase power
under the replacement contract with Calumet Energy Team LLC described above. As a result of this agreement with Commonwealth Edison, Midwest Generation is no longer obligated to build the additional
gas-fired generation.

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Interconnection Agreement

Midwest Generation has entered into interconnection agreements with Commonwealth Edison to provide interconnection services necessary to connect the Illinois
Plants with its transmission systems. Unless terminated earlier in accordance with the terms thereof, the interconnection agreements will terminate on a date mutually agreed to by both parties. This
date may not exceed the retirement date of the Illinois Plants. Midwest Generation is required to compensate Commonwealth Edison for all reasonable costs associated with any modifications, additions
or replacements made to the interconnection facilities or transmission systems in connection with any modification, addition or upgrade to the Illinois Plants.

Guarantees and Indemnities



Midwest Generation has guaranteed Edison Mission Midwest Holdings' third-party debt in the amount of $1.7 billion at December 31, 2002. Midwest
Generation's parent also pledged the membership interests in Midwest Generation to the lenders in connection with the third-party debt arrangements. See "Notes to Financial
StatementsNote 5. Long-Term Debt."



In connection with the sale-leaseback transactions related to the Collins Station and the Powerton and Joliet Stations, EME, Midwest Generation and
another wholly owned subsidiary of EME entered into tax indemnity agreements. Under these tax indemnity agreements, these entities agreed to indemnify the lessors in the sale-leaseback
transactions for specified adverse tax consequences that could result in certain situations set forth in each tax indemnity agreement, including specified defaults under the respective leases. The
potential indemnity obligation under these tax indemnity agreements could be significant. Due to the nature of these obligations under these tax indemnity agreements, Midwest Generation cannot
determine a maximum potential liability. The indemnities would be triggered by a valid claim from the lessors. Midwest Generation has not recorded a liability related to these indemnities.



Midwest Generation entered into a supplemental agreement to resolve a dispute regarding interpretation of its reimbursement obligation for asbestos claims under
the environmental indemnities set forth in the Asset Sale Agreement dated March 22, 1999. Under this supplemental agreement, Midwest Generation agreed to reimburse Commonwealth Edison 50% of
specific existing asbestos claims less recovery of insurance costs, and agreed to a sharing arrangement for liabilities associated with future asbestos related claims as specified in the agreement.
The obligations under this agreement are not subject to a maximum liability. The supplemental agreement has a five-year term with an automatic renewal provision (subject to the right to
terminate). Payments are made under this indemnity by a valid claim provided from Commonwealth Edison. At December 31, 2002, Midwest Generation recorded a $5 million liability related to
known claims provided by Commonwealth Edison.

Off-Balance Sheet Transactions

Midwest Generation has off-balance sheet activities related to operating leases in place for equipment, primarily leased barges and railcars that have
terms which range from as short as 1.5 years to more than 17 years. See "Contractual Obligations, Commitments and Contingencies" for Midwest Generation's minimum operating
lease obligations.

41

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Market Risk Exposures

Midwest Generation's primary market risk exposures arise from fluctuations in electricity prices, fuel prices, emission allowance prices, transmission rights and
interest rates. Midwest Generation manages these risks in part by using derivative financial instruments in accordance with established policies and procedures. See "Current Developments"
and "Credit Ratings" for a discussion of market developments and their impact on Midwest Generation's credit and the credit of its counterparties.

Commodity Price Risk

Midwest Generation's merchant power plants expose it to commodity price risk, which represents the potential loss that can be caused by a change in the market
value of a particular commodity. Commodity price risks are actively monitored to ensure compliance with Midwest Generation's risk management policies through its marketing affiliate. Policies are in
place that limit the amount of total net exposure Midwest Generation may enter into at any time. Procedures exist that allow for
monitoring of all commitments and positions with regular reviews by a risk management committee. Midwest Generation's marketing affiliate performs a "value at risk" analysis in its daily business to
measure, monitor and control Midwest Generation's overall market risk exposure. The use of value at risk allows management to aggregate overall commodity risk, compare risk on a consistent basis and
identify the drivers of the risk. Value at risk measures the possible loss over a given time interval, under normal market conditions, at a given confidence level. Given the inherent limitations of
value at risk and relying on a single risk measurement tool, Midwest Generation's marketing affiliate supplements this approach with the use of stress testing and worst-case scenario
analysis, as well as stop loss limits and counterparty credit exposure limits. Despite this, there can be no assurance that all risks have been accurately identified, measured and/or mitigated.

As
discussed further below, beginning in 2003, Midwest Generation is selling a significant portion of its energy into wholesale energy markets. Midwest Generation may hedge a portion of
its electric output that is not committed to be sold under long-term contracts, in order to provide more predictable earnings and cash flow. When appropriate, Midwest Generation manages
the spread between electric prices and fuel prices, and uses forward contracts, swaps, futures, or options contracts to achieve those objectives. There is no assurance that contracts to hedge changes
in market prices will be effective.

With
the exception of revenue generated by the three power purchase agreements with Exelon Generation, Midwest Generation's revenues and results of operations during the estimated useful
lives of the power plants will depend upon prevailing market prices for capacity, energy, ancillary services, fuel oil, coal, natural gas, emission credits and associated transportation costs in the
market area known as the MAIN Region and neighboring markets. Among the factors that influence the price of power in the MAIN Region are:



42

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Status of the Exelon Generation Power Purchase Agreements

Virtually all of Midwest Generation's energy and capacity sales in 2002 were to Exelon Generation under the power purchase agreements. Under each of the power
purchase agreements, Exelon Generation, upon notice by a given date, has the option to terminate each agreement with respect to all or a portion of the units subject to it. As a result of notices
given in 2002, Midwest Generation expects a large portion of its energy to be sold into the wholesale markets in 2003.

In
July 2002, under the power purchase agreement related to Midwest Generation's coal-fired generation units, Exelon Generation exercised its option to purchase 1,265
MW of capacity and energy during 2003 (of a possible total of 3,949 MW subject to option) from the option coal units. As a result, 2,684 MW of capacity of the Will County 1 and 2, Joliet 6 and 7, and
Powerton 5 and 6 units ceased to be subject to the power purchase agreement from and after January 1, 2003. Exelon Generation continues to have a similar option, exercisable not later than
180 days prior to January 1, 2004, to retain or release for 2004 all or a portion of the option coal units retained for 2003. Exelon Generation remains committed to purchase the capacity
of certain committed units having 1,696 MW of capacity for both 2003 and 2004.

In
October 2002, under the power purchase agreements related to Midwest Generation's Collins Station and peaking units, Exelon Generation exercised its option to terminate the
existing power purchase agreements during 2003 with respect to (a) 1,614 MW of capacity and energy (of a possible total of 2,698 MW subject to the option to terminate) from the Collins Station,
a natural gas and oil-fired electric generating station, and (b) 113 MW of capacity and energy (of a possible total of 807 MW subject to the option to terminate) from the natural
gas and oil-fired peaking units, in accordance with the terms of each applicable power purchase agreement. As a result, 1,614 MW of capacity from the Collins Units 2, 4 and 5, and 113 MW
of capacity from the Lombard 33 and Calumet 33 and 34 peaking units, ceased to be subject to a power purchase agreement from and after January 1, 2003. Previously, Exelon Generation exercised
its option to terminate 137 MW of capacity from the Bloom and Waukegan peaking units effective January 1, 2002. Exelon Generation continues to have a similar
option to terminate, exercisable not later than 90 days prior to January 1, 2004, the power purchase agreements for 2004 with respect to all or a portion of the Collins Station and
peaking units not previously terminated for 2003 (1,084 MW from the Collins Station and 694 MW from the peaking units).

Under
the Collins Station power purchase agreement, Exelon Generation has the right to purchase all of the energy produced by the Collins Station. Energy prices vary depending on the
total annual number of megawatt-hours of energy purchased and the market price of natural gas. When purchases exceed an annual threshold of 2.7 million MWh, prorated to 1.085 million MWh
in 2003 due to the release of units, Exelon Generation purchases energy at market price and thus bears all subsequent risk of changes in the market price of natural gas used to produce the energy
purchased. The Collins Station is capable of burning fuel oil in lieu of natural gas, which enables Midwest Generation to use fuel oil when it costs less than natural gas. Midwest Generation has in
the past purchased and has in inventory stocks of fuel oil for this purpose.

The
energy and capacity from any units which are not subject to one of the power purchase agreements with Exelon Generation are sold under terms, including price and quantity, negotiated
by Midwest Generation's marketing affiliate with customers through a combination of bilateral agreements, forward energy sales and spot market sales. Thus, Midwest Generation is subject to the

43

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market risks related to the price of energy and capacity described above. Midwest Generation expects that capacity prices for merchant energy sales will, in the near term, be substantially lower than
those Midwest Generation currently receives under its existing agreements with Exelon Generation (with the possibility of minimal revenues due to the current oversupply conditions in this
marketplace). Midwest Generation further expects that the lower revenues resulting from this difference will be offset in part by energy prices, which Midwest Generation believes will, in the near
term, be higher for merchant energy sales than those Midwest Generation currently receives under its existing agreements, as indicated below in the table of forward-looking prices. Midwest Generation
intends to manage this price risk, in part, by accessing both the wholesale customer and over-the-counter markets described below as well as using derivative financial
instruments in accordance with established policies and procedures.

During
2003, the primary markets available to Midwest Generation for wholesale sales of electricity are expected to be "wholesale customer" and
"over-the-counter." The most liquid over-the-counter markets in the Midwest region are sales into the control area of Cinergy, referred to as "Into
Cinergy," and, to a lesser extent, sales into the control area of Commonwealth Edison, referred to as "Into ComEd." "Into Cinergy" and "Into ComEd" are bilateral markets for the sale or purchase of
electrical energy for future delivery. Performance of transactions in these markets is subject to contracts that generally provide for liquidated damages supported by a variety of credit requirements,
which may include independent credit assessment, parental guarantees, letters of credit and cash margining arrangements.

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The
following table sets forth the forward month-end market prices for energy per megawatt-hour for the calendar 2003 and calendar 2004 "strips," which are
defined as energy purchases for the entire calendar year, as publicly quoted for sales "Into ComEd" and "Into Cinergy" during 2002. These forward prices will continue to fluctuate as a result of a
number of factors, including gas prices, electricity demand, which is also affected by economic growth, and the amount of existing and planned power plant capacity. The actual spot prices for
electricity delivered into these markets may vary materially from the forward market prices.

Into ComEd*

|                   |  | 2003 |       | 2004
|------------------ |  | ---- | ----- | ----
|
|
|January 31, 2002   |  | $    | 27.26 |     
|February 28, 2002  |  |      | 28.96 |     
|March 31, 2002     |  |      | 32.50 |     
|April 30, 2002     |  |      | 32.55 |     
|May 31, 2002       |  |      | 30.85 |     
|June 30, 2002      |  |      | 29.54 |     
|July 31, 2002      |  |      | 28.64 |     
|August 30, 2002    |  |      | 28.75 |     
|September 30, 2002 |  |      | 29.16 |     
|October 31, 2002   |  |      | 29.01 |     
|November 27, 2002  |  |      | 29.11 |     
|December 31, 2002  |  |      | 29.98 |     

Into Cinergy**

|                   |  | 2003 |       | 2004
|------------------ |  | ---- | ----- | ----
|
|
|January 31, 2002   |  | $    | 28.38 |     
|February 28, 2002  |  |      | 30.30 |     
|March 31, 2002     |  |      | 33.82 |     
|April 30, 2002     |  |      | 34.03 |     
|May 31, 2002       |  |      | 31.74 |     
|June 30, 2002      |  |      | 31.08 |     
|July 31, 2002      |  |      | 29.34 |     
|August 30, 2002    |  |      | 29.63 |     
|September 30, 2002 |  |      | 30.56 |     
|October 31, 2002   |  |      | 30.64 |     
|November 27, 2002  |  |      | 30.59 |     
|December 31, 2002  |  |      | 31.73 |     

---

The
average price that Midwest Generation derives from electricity sales is normally higher than a 24-hour price as Midwest Generation manages its generation to optimize the
on-peak periods when power prices are higher.

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Midwest
Generation intends to hedge a portion of its merchant portfolio risk through its marketing affiliate. To the extent it does not do so, the unhedged portion will be subject to the
risks and benefits of spot-market price movements. The extent to which Midwest Generation will hedge its market price risk through forward over-the-counter sales
depends on several factors. First, Midwest Generation will evaluate over-the-counter market prices to determine whether sales at forward market prices are sufficiently
attractive compared to assuming the risk associated with spot market sales. Second, Midwest Generation's ability to enter into hedging transactions will depend upon its and its marketing affiliate's
liquidity and upon the over-the-counter forward sales markets' having sufficient liquidity to enable Midwest Generation to identify counterparties who are able and willing to
enter into hedging transactions with it. Due to factors beyond Midwest Generation's control, market liquidity decreased significantly during 2002, and a number of formerly significant trading parties
have completely withdrawn from the market or substantially reduced their trading activities. See "Credit Risk," below.

In
addition to the prevailing market prices, Midwest Generation's ability to derive profits from the sale of electricity from the released units will be affected by the cost of
production, including costs incurred to comply with environmental regulations. The costs of production of the released units vary and, accordingly, depending on market conditions, the amount of
generation that will be sold from the released units is expected to vary from unit to unit. In this regard, Midwest Generation suspended operations of Will County Units 1 and 2 and Collins Station
Units 4 and 5 at the end of 2002 pending improvement in market conditions. If market conditions were to be depressed for an extended period of time, Midwest Generation would need to consider
decommissioning these units, which would result in a charge against income.

Midwest
Generation's ability to transmit energy to counterparty delivery points to consummate spot sales and hedging transactions may be affected by transmission service limitations and
constraints and new standard market design proposals proposed by and currently pending before the Federal Energy Regulatory Commission. Although the Federal Energy Regulatory Commission and the
relevant industry participants are working to minimize such issues, Midwest Generation cannot determine how quickly or how effectively such issues will be resolved.

Derivative Financial Instruments

The following table summarizes the fair values for outstanding financial instruments used for price risk management activities (in thousands):

December 31,2002

2001Commodity price:Electricity contracts

$
(647
)
$
17Natural gas contracts





(8,401
)Other





(143
)Total fair value

$
(647
)
$
(8,527
)


In
assessing the fair value of its derivative financial instruments, Midwest Generation uses a variety of methods and assumptions based on the market conditions and associated risks
existing at each balance sheet date. The fair value of commodity price contracts takes into account quoted market prices, time value of money, volatility of the underlying commodities and other
factors. The following table summarizes the maturities, the valuation method and the related fair value of Midwest

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Generation's commodity price risk management assets and liabilities as of December 31, 2002 (in thousands):

Total Fair
Value

Maturity
< 1 year

Maturity
1 to 3 years

Maturity
4 to 5 years

Maturity
> 5 yearsPrices actively quoted

$
(647
)
$
(647
)
$


$


$



A
10% adverse change in forward prices would decrease the fair market value of outstanding commodity contracts at December 31, 2002 by $12.4 million.

Credit Risk

As a result of Exelon Generation's notification to release some of Midwest Generation's units from the respective power purchase agreements in 2003, Midwest
Generation is selling a significant portion of its energy into wholesale energy markets and intends to hedge its merchant portfolio risk through its marketing affiliate.

In
conducting price risk management activities, Midwest Generation's marketing affiliate enters into contracts with a number of utilities, energy companies and financial institutions.
Due to factors beyond
Midwest Generation's control, market liquidity has decreased significantly since the beginning of 2002, and a number of formerly significant trading parties have completely withdrawn from the market
or substantially reduced their trading activities. The reduction in the credit quality of traditional trading parties increases Midwest Generation's credit risk. In addition, the decrease in market
liquidity may require Midwest Generation to rely more heavily on wholesale electricity sales to wholesale customer markets which may also increase its credit risk. While various industry groups and
regulatory agencies have taken steps to address market liquidity, transparency and credit issues, there is no assurance as to when or how effectively such efforts will restore market confidence. In
the event a counterparty were to default on its trade obligation, Midwest Generation would be exposed to the risk of possible loss associated with reselling the contracted product at a lower price if
the non-performing counterparty were unable to pay the resulting liquidated damages owed to Midwest Generation. Further, Midwest Generation would be exposed to the risk of
non-payment of accounts receivable accrued for products delivered prior to the time such counterparty defaulted.

To
manage credit risk, Midwest Generation's marketing affiliate looks at the risk of a potential default by its counterparties. Credit risk is measured by the loss that Midwest
Generation would record if its counterparties failed to perform pursuant to the terms of their contractual obligations. Midwest Generation's marketing affiliate has established controls to determine
and monitor the creditworthiness of counterparties and uses master netting agreements whenever possible to mitigate its exposure to counterparty risk. This may require counterparties to pledge
collateral when deemed necessary. Midwest Generation's marketing affiliate tries to manage the credit in its portfolio based on credit ratings using published ratings of counterparties and other
publicly disclosed information, such as financial statements, regulatory filings, and press releases to guide it in the process of setting credit levels, risk limits and contractual arrangements,
including master netting agreements. The credit quality of Midwest Generation's marketing affiliate's counterparties is reviewed regularly by a risk management committee. In addition to continuously
monitoring Midwest Generation's credit exposure to its counterparties, Midwest Generation's marketing affiliate also takes appropriate steps to limit or lower credit exposure. Despite this, there can
be no assurance that Midwest Generation's marketing affiliate's actions to mitigate risk will be wholly successful or that collateral pledged will be adequate.

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Interest Rate Risk

Interest rate changes affect the cost of capital needed to operate the facilities and Midwest Generation's lease costs under the Collins Station lease and the
Illinois peaker power units lease prior to Midwest Generation's purchase of the peaker power units on August 9, 2002. Based on the amount of variable rate debt and leases outstanding on
December 31, 2002, a 100 basis point change in interest rates at December 31, 2002 would increase or decrease Midwest Generation's 2003 annual income before taxes by approximately
$24.9 million. For additional information on outstanding debt and lease obligations, see "Notes to Financial StatementsNote 5. Long-Term Debt" and "Notes to
Financial StatementsNote 10. Lease Commitments."

Risk Factors

Midwest Generation has a substantial amount of indebtedness, including a substantial amount of short-term indebtedness due in 2003 and
long-term lease obligations.

As
of December 31, 2002, Midwest Generation had $5.6 billion of debt and lease financings, including $911 million of debt maturing in December 2003. Midwest
Generation's debt obligations to Edison Mission Overseas Co. are on terms matching those of a credit agreement between Edison Mission Midwest Holdings and commercial lenders. Midwest Generation is a
guarantor of Edison Mission Midwest Holdings' obligations, which include $911 million of debt maturing in December 2003 that will need to be repaid, extended or refinanced. Edison
Mission Midwest Holdings is not expected to have sufficient cash to repay the $911 million debt due in December 2003, and there is no assurance that it will be able to extend or
refinance this debt obligation on similar terms and rates as the existing debt, on commercially reasonable terms, on the terms permitted under the financing documents entered into by MEHC in
July 2001 or at all. Midwest Generation's independent accountants' audit opinion for the year ended December 31, 2002 contains an explanatory paragraph that indicates the financial
statements have been prepared on the basis that Midwest Generation will continue as a going concern and that uncertainty about Edison Mission Midwest Holdings' ability to repay, extend or refinance
its obligation
raises substantial doubt about Midwest Generation's ability to continue as a going concern. Accordingly, the financial statements do not include any adjustments that might result from the resolution
of this uncertainty. Within Item 8, see "Report of Independent Accountants," "Notes to Financial StatementsNote 5. Long-Term Debt" and "Notes to Financial
StatementsNote 10. Lease Commitments."

A
failure to repay, extend or refinance Edison Mission Midwest Holdings' $911 million of debt as required by its terms could result in an event of default under the Edison Mission
Midwest Holdings financing documents. An event of default under the Edison Mission Midwest Holdings financing documents would permit the lenders to accelerate $1.7 billion of indebtedness,
including the $911 million due in December 2003, and would trigger cross-defaults under agreements to which Midwest Generation and Edison Mission Midwest Holdings are party, including
the Collins, Powerton and Joliet leases. Any foreclosure by the Edison Mission Midwest Holdings lenders on the pledge of Midwest Generation's membership interests granted in connection with the
financing of the acquisition of the Illinois Plants would result in a change in control of Midwest Generation. An acceleration of debt and lease payments due under the agreements referred to above
would have a material adverse effect on Midwest Generation and could make it necessary for Midwest Generation to file a petition for reorganization under Chapter 11 of the United States
Bankruptcy Code.

The
substantial amount of debt and financial obligations presents the risk that Midwest Generation might not have sufficient cash to service its indebtedness or long-term
lease obligations and could limit the ability of Midwest Generation to compete effectively or to operate successfully under adverse economic conditions.

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A substantial amount of Midwest Generation's revenues are derived under power purchase agreements with a single customer.

During the last three years, 99% of Midwest Generation's energy and capacity revenues were derived under three power purchase agreements with Exelon Generation
Company, a subsidiary of Exelon Corporation. Midwest Generation expects to be less dependent on Exelon Generation as a major customer during 2003 due to Exelon Generation's release of 2,684 MW of
capacity from the coal units and 1,614 MW of capacity from the Collins Station. In 2003, 2,961 MW of capacity from the coal units and 1,084 MW of capacity from the Collins Station will remain subject
to the power purchase agreements. Exelon Generation has the right to terminate for 2004 up to 1,265 MW of capacity from the coal units and 1,084 MW of capacity from the Collins Station. The power
purchase agreements terminate at the end of 2004. Exelon Corporation is the holding company of Commonwealth Edison and PECO Energy Company, major utilities located in Illinois and Pennsylvania. If
Exelon Generation were to fail, become unable to fulfill or choose to terminate some of its obligations under these power purchase agreements, Midwest Generation may not be able to find another
customer on similar terms for the output of its power generation assets. Any material failure by Exelon Generation to make payments under these power purchase agreements could adversely affect Midwest
Generation's results
of operations and liquidity. For further discussion of the power purchase agreements, see "Item 1. BusinessPower Purchase Agreements."

Midwest Generation has substantial interests in merchant energy power plants which are subject to market risks related to wholesale energy prices.

During 2002, Exelon Generation, currently the purchaser of capacity and electricity from Midwest Generation's plants, exercised its right to terminate for 2003
and thereafter 2,684 MW of capacity from the coal units and 1,614 MW of capacity for the Collins Station. This has significantly increased Midwest Generation's exposure to merchant energy markets. The
amount and price of power sold from Midwest Generation's units which is not committed to be sold under the power purchase agreements will be determined by market forces. There is no assurance that
Midwest Generation's merchant energy power plants will be successful in selling power into the markets or that the prices received for such power will generate positive cash flow. If Midwest
Generation's merchant energy power plants are not successful, they may not be able to generate enough cash to service their own debt, which would have a material adverse effect on Midwest Generation.
See "Market Risk Exposures."

The
energy and capacity from any units which do not remain subject to one of the power purchase agreements with Exelon Generation will be sold under terms, including price and quantity,
to be negotiated with customers or into the so-called "spot market." Thus, to the extent that Exelon Generation does not purchase Midwest Generation's power for 2003 or 2004, Midwest
Generation will be subject to the market risks related to the price of energy and capacity. Due to the volatility of market prices for energy and capacity during the past several years, Midwest
Generation cannot predict whether or not Exelon Generation will elect to terminate for 2004 any of the units currently subject to the power purchase agreements for which termination is permitted for
that year and, if it does, whether sales of energy and capacity to other customers or the market will be at prices sufficient to generate cash flow necessary to meet Midwest Generation's obligations.

EME's credit rating is below investment grade, which may adversely affect its ability to provide credit support for sales from Midwest Generation's
plants.

EME provides credit support to its subsidiaries, including Edison Mission Marketing & Trading, which markets power from Midwest Generation's plants, in the
form of letters of credit or parent company guarantees for bilateral contracts for power and fuel. Without an investment grade rating, EME's ability to provide credit support to its subsidiaries may
be limited. Furthermore, if EME is unable to extend a portion of its corporate credit facility currently scheduled to expire in September

49

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2003 and complete a financing for one of its project subsidiaries by summer 2003, its ability to provide credit support will be severely limited. If EME were unable to provide credit support, this
would reduce the number of counterparties willing to enter into bilateral contracts with Edison Mission Marketing & Trading, thus requiring it to rely on short-term markets instead
of bilateral contracts. Furthermore, if forward prices for power increase significantly, EME may not be able to meet
margining requirements. Failure to meet a margining requirement will permit the counterparty to terminate the related bilateral contract early and demand immediate payment for the replacement value of
the contract. See "Credit Ratings."

Midwest Generation's ability to meet its obligations under its long-term leases is dependent upon payment of interest and principal on its
notes receivable from EME.

During 2000, Midwest Generation loaned $1.367 billion to EME from the proceeds of the sale-leaseback of the Powerton and Joliet plants. EME
used the proceeds from this loan to repay corporate indebtedness. Midwest Generation uses the debt service payments made by EME on the intercompany notes evidencing the loan to make all or part of the
lease payments under the Powerton and Joliet leases. Midwest Generation's ability to meet its obligations under its long-term leases is dependent upon receipt of interest and principal on
the intercompany notes from EME. A default by EME in the payment of these intercompany notes could result in a shortfall of cash available to Midwest Generation to meet its lease and debt obligations.
A default by Midwest Generation in meeting its obligations would in turn have a material adverse effect on its results of operations and financial condition.

Restrictions in the financing documents entered into by EME's parent company, MEHC, limit the ability of EME and its subsidiaries to enter into
specified transactions that they otherwise may enter into, and may significantly impede their ability to refinance their debt.

In July 2001, MEHC, the parent company of EME, issued $800 million of notes due 2008 and borrowed $385 million under a term loan. The
financing documents entered into by MEHC contain financial and investment covenants restricting EME and its subsidiaries. The instruments governing Midwest Generation's indebtedness also contain
financial and investment covenants. Restrictions contained in these documents could affect, and in some cases, significantly limit or prohibit Midwest Generation's and Edison Mission Midwest Holdings'
ability to, among other things, incur, refinance and prepay debt, make capital expenditures, pay dividends and make other distributions, make investments, create liens, sell assets, enter into sale
and leaseback transactions, issue equity interests, enter into transactions with affiliates, create restrictions on the ability to pay dividends or make other distributions and engage in mergers and
consolidations. These restrictions may significantly impede the ability of Midwest Generation and Edison Mission Midwest Holdings to develop and implement any refinancing plans in respect of their
indebtedness. See "Midwest Generation has a substantial amount of indebtedness, including a substantial amount of short-term indebtedness due in 2003 and long-term
lease obligations" for further discussion.

In
addition, in connection with the entry into new financings or amendments to existing financing arrangements, Midwest Generation's financial and operational flexibility may be further
reduced as a result of more restrictive covenants, requirements for security and other terms that are often imposed on sub-investment grade entities.

Midwest Generation is subject to extensive government regulation.

Midwest Generation's operations are subject to extensive regulation by governmental agencies. Midwest Generation is subject to energy, environmental and other
governmental laws and regulations at the federal, state and local levels in connection with its plants.

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There
is no assurance that the introduction of new laws or other future regulatory developments will not have a material adverse effect on Midwest Generation's business, results of
operations or financial condition, nor can Midwest Generation provide assurance that it will be able to obtain and comply with all necessary licenses, permits and approvals for its plants. Currently,
environmental advocacy groups and regulatory agencies in the United States have been focusing considerable attention on carbon dioxide emissions from coal-fired power plants and their
potential role in the "global warming" issue. The adoption of laws and regulations to implement the carbon dioxide controls could adversely affect Midwest Generation's coal-fired plants.
Also, coal plant emissions of nitrogen and sulphur oxides, mercury and particulates are potentially subject to increased controls. See "Environmental Matters and Regulations." If Midwest
Generation cannot comply with all applicable regulations, its business, results of operations and financial condition could be adversely affected.

General operating risks may decrease or eliminate the revenues generated by Midwest Generation or increase operating costs.

The operation of power generation facilities involves many operating risks, including:



Midwest
Generation cannot assure you that the occurrence of one or more of the events listed above would not significantly decrease or eliminate revenues generated by the facilities or
significantly increase the costs of operating them. Equipment and plant warranties and insurance may not be adequate to cover lost revenues or increased expenses. A decrease or elimination in revenues
generated by the facilities or an increase in the costs of operating them could decrease or eliminate funds available to meet Midwest Generation's obligations as they become due and could have a
material adverse effect on Midwest Generation.

Environmental Matters and Regulations

Midwest Generation is subject to environmental regulation by federal, state and local authorities in the United States. Midwest Generation believes that it is in
substantial compliance with environmental regulatory requirements and that maintaining compliance with current requirements will not materially affect its financial position or results of operation.
However, possible future developments, such as the promulgation of more stringent environmental laws and regulations, and future proceedings that may be initiated by environmental authorities, could
affect the costs and the manner in which Midwest Generation conducts its business and could cause it to make substantial additional capital expenditures. There is no assurance that Midwest Generation
would be able to recover these increased costs from its customers or that its financial position and results of operations would not be materially adversely affected.

Typically,
environmental laws require a lengthy and complex process for obtaining licenses, permits and approvals prior to construction and operation of a project. Meeting all the
necessary requirements

51

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can delay or sometimes prevent the completion of a proposed project as well as require extensive modifications to existing projects, which may involve significant capital expenditures. If Midwest
Generation fails to comply with applicable environmental laws, it may be subject to penalties and fines imposed against Midwest Generation by regulatory authorities.

State

Air Quality.In June 2001, Illinois passed legislation mandating the Illinois Environmental Protection Agency to
evaluate and issue a report to the Illinois legislature addressing the need for further emissions controls on fossil fuel-fired electric generating stations, including the potential need
for additional controls on nitrogen oxides, sulfur dioxide and mercury. The study, which is to be submitted between September 30, 2003 and September 30, 2004, also requires an evaluation
of incentives to promote renewable energy and the establishment of a banking system for certifying credits from voluntary reductions of greenhouse gases. The law allows the Illinois Environmental
Protection Agency to propose regulations based on its findings no sooner than 90 days after the issuance of its findings, and requires the Illinois Pollution Control Board to act within one
year on such proposed regulations. Until the Illinois Environmental Protection Agency issues its findings and proposes regulations in accordance with the findings, if such regulations are proposed,
Midwest Generation cannot evaluate the potential impact of this legislation on the operations of its facilities.

Beginning
with the 2003 ozone season (May 1 through September 30), Midwest Generation must comply with an average NOx emission rate of 0.25 lb NOx/mmBtu of heat input. This
limitation is commonly referred to as the East St. Louis State Implementation Plan (SIP). This regulation is a State of Illinois requirement. Compliance with this standard will be met by averaging the
emissions of all Midwest Generation's power plants. Additional burner controls planned for installation at the Powerton Station in the spring of 2003, along with over-compliance at Midwest
Generation's other stations, are expected to facilitate compliance with this standard.

Beginning
with the 2004 ozone season, an additional NOx emission regulation will go into effect. This federally mandated regulation, commonly referred to as the "NOx SIP Call" will cap
NOx emissions within a 19-state region east of the Mississippi with a tonnage cap on NOx emissions. This program allows NOx trading similar to the current SO2 trading program already in
effect. Midwest Generation's compliance plan is to rely upon a combination of strategies. Midwest Generation has already qualified for early reduction credits by reducing NOx emissions at various
plants ahead of the imposed deadline. Additionally, the installation of emission control technology at select plants will ensure over-compliance at those individual plants with pending NOx
emission limitations. Finally, NOx emission trading will be utilized as needed to comply with any shortfall in emission credits anticipated with the deferral of the SCR projects at Midwest
Generation's Powerton Station.

Water Quality.The Illinois EPA is reviewing the water quality standards for the DesPlaines River adjacent to the Joliet
Station and immediately downstream of the Will County Station to determine if the use classification should be upgraded. One of the limitations for discharges to the river that could be made more
stringent if the existing secondary contact classification is changed would be the allowable temperature of the discharges from Joliet and Will County. At this time no new standards have been
proposed, so Midwest Generation cannot estimate the financial impact of this review.

FederalUnited States of America

Clean Air Act.Midwest Generation expects that compliance with the Clean Air Act and the regulations and revised State
Implementation Plans developed as a consequence of the Act will result in increased capital expenditures and operating expenses. Midwest Generation's approach to meeting these obligations will consist
of a blending of capital expenditure and emissions allowance purchases that will be based on an ongoing assessment of the dynamics of its market conditions. Midwest

52

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Generation anticipates that upgrades to its environmental controls to reduce nitrogen oxide (NOx) emissions will result in capital expenditures of approximately $14 million in 2003, and none
forecasted at this time for the years 2004-2007.

Mercury Maximum Achievable Control Technology Determination.On December 20, 2000, the Environmental Protection Agency
issued a regulatory finding that it is "necessary and appropriate" to regulate emissions of mercury and other hazardous air pollutants from coal-fired power plants. The agency has added
coal-fired power plants to the list of source categories under Section 112(c) of the Clean Air Act for which "maximum achievable control technology" standards will be developed.
Eventually, unless overturned or reconsidered, the Environmental Protection Agency will issue technology-based standards that will apply to every coal-fired unit owned by Midwest
Generation in the United States. The regulations are required to become final in 2004 with controls in place by 2007. This section of the Clean Air Act provides only for technology-based standards,
and does not permit market trading options. Until the standards are actually promulgated, the potential cost of these control technologies cannot be estimated, and Midwest Generation cannot evaluate
the potential impact on the operations of its facilities.

National Ambient Air Quality Standards.A new ambient air quality standard was adopted by the Environmental Protection Agency
in July 1997 to address emissions of fine particulate matter. It is widely understood that attainment of the fine particulate matter standard may require reductions in nitrogen oxides and
sulfur dioxides, although, under the time schedule announced by the Environmental Protection Agency when the new standard was adopted, non-attainment areas were not to have been designated
until 2002 and control measures to meet the standard were not to have been identified until 2005. In May 1999, the United States Court of Appeals for the District of Columbia Circuit held that
Section 109(b)(1) of the Clean Air Act, the section of the Clean Air Act requiring the promulgation of national ambient air quality standards, as interpreted by the Environmental Protection
Agency, was an unconstitutional delegation of legislative power. The Court of Appeals remanded both the fine particulate matter standard and the revised ozone standard to allow the Environmental
Protection Agency to determine whether it could articulate a constitutional application of Section 109(b)(1). On February 27, 2001, the Supreme Court, inWhitman
v. American Trucking Associations, Inc., reversed the Circuit Court's judgment on this issue and remanded the case back to the Court of Appeals to dispose of any other
preserved challenges to the particulate matter and ozone standards. On March 26, 2002, the D.C. Circuit, on remand, held that the revised ozone and fine particulate matter ambient air quality
standards were neither arbitrary nor capricious. Further action by the EPA with respect to the implementation of the revised ozone standard and the promulgation of a
new coarse particulate matter standard is required pursuant to the first D.C. Circuit opinion and the Supreme Court's decision inWhitmanv. American Trucking Associations,
Inc.

Because
of the delays resulting from the litigation over the standards, the EPA is drafting new schedules for implementing the 8-hour ozone and fine particulate matter (PM
2.5) standards. Pursuant to a negotiated settlement, the EPA has agreed to designate attainment and nonattainment areas under the 8-hour ozone standard in 2004. The EPA has announced that
it also intends to designate attainment and nonattainment areas under the fine particulate matter standard in 2004. Once these designations are published, states will be required to revise their
implementation plans to achieve attainment with the revised standards, which plans are likely to require additional emission reductions from facilities that are significant emitters of ozone
precursors and particulates. Any obligations on Midwest Generation's facilities to further reduce their emissions of sulfur dioxide, nitrogen oxides and fine particulates as a result of the
8-hour ozone and fine particulate matter standards will not be known until the states revise their implementation plans.

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Federal Legislative Initiatives.There have been a number of bills introduced in the last session of
Congress and the current
session of Congress that would amend the Clean Air Act to specifically target emissions of certain pollutants from electric utility generating stations. These bills would mandate reductions in
emissions of nitrogen oxides, sulfur dioxide and mercury; some bills would also impose limitations on carbon dioxide emissions. The various proposals differ in many details, including the timing of
any required reductions; the extent of required reductions; and the relationship of any new obligations that would be imposed by these bills with existing legal requirements. There is significant
uncertainty as to whether any of the proposed legislative initiatives will pass in their current form or whether any compromise can be reached that would facilitate passage of legislation.
Accordingly, Midwest Generation is not able to evaluate the potential impact of these proposals at this time.

Comprehensive Environmental Response, Compensation, and Liability Act.Under various federal, state and local environmental
laws and regulations, a current or previous owner or operator of any facility, including an electric generating facility, may be required to investigate and remediate releases or threatened releases
of hazardous or toxic substances or petroleum products located at that facility, and may be held liable to a governmental entity or to third parties for property damage, personal injury and
investigation and remediation costs incurred by these parties in connection with these releases or threatened releases. Many of these laws, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, commonly referred to as CERCLA, as amended by the Superfund Amendments and Reauthorization Act of 1986, impose liability without regard to whether the owner
knew of or caused the presence of the hazardous substances, and courts have interpreted liability under these laws to be strict and joint and several. The cost of investigation, remediation or removal
of these substances may be substantial. In connection with the ownership and operation of its facilities, Midwest Generation may be liable for these costs.

In
addition, persons who arrange for the disposal or treatment of hazardous or toxic substances at a disposal or treatment facility may be liable for the costs of removal or remediation
of a release or threatened release of hazardous or toxic substances at that disposal or treatment facility, whether or not that facility is owned or operated by that person. Some environmental laws
and regulations create a lien on a contaminated site in favor of the government for damages and costs it incurs in connection with the contamination. The owner of a contaminated site and persons who
arrange for the disposal of hazardous substances at that site also may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating
from that site. In connection with the ownership and operation of its facilities, Midwest Generation may be liable for these costs.

With
respect to Midwest Generation's liabilities arising under CERCLA or similar laws for the investigation and remediation of contaminated property, Midwest Generation accrues a
liability to the extent the costs are probable and can be reasonably estimated. Generally, Midwest Generation does
not believe the costs for environmental remediation for a particular site can be reasonably estimated before a remedial investigation has been completed for a particular site. In connection with due
diligence conducted for the acquisition of its power plants, Midwest Generation engaged a third-party consultant to conduct an assessment of the potential costs for environmental remediation of the
plants. This assessment, which was based on information provided to Midwest Generation by the former owner of these plants, was less rigorous than a remedial investigation conducted in the course of a
voluntary or required site cleanup.

Midwest
Generation has accrued approximately $2 million for estimated environmental investigation and remediation costs for its plants. This estimate is based upon the number of
sites, the scope of work and the estimated range of costs for environmental activity where such expenditures could be reasonably estimated. The midpoint of the range was used for the accrual. Future
estimated costs may vary based on changes in regulations or requirements of Federal, state, or local governmental agencies, changes in technology, and actual costs of disposal. Management believes
that future costs in

54

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excess of the amounts disclosed on all known and quantifiable environmental contingencies will not be material to Midwest Generation's financial position.

Enforcement Issues.On November 3, 1999, the United States Department of Justice filed suit against a number of
electric utilities for alleged violations of the Clean Air Act's new source review, which Midwest Generation refers to as NSR, requirements related to modifications of air emissions sources at
electric generating stations located in the southern and midwestern regions of the United States. Several states have joined these lawsuits. In addition, the United States Environmental Protection
Agency has also issued administrative notices of violation alleging similar violations at additional power plants owned by some of the same utilities named as defendants in the Department of Justice
lawsuit, as well as other utilities, and also issued an administrative order to the Tennessee Valley Authority for similar violations at certain of its power plants. The Environmental Protection
Agency has also issued requests for information pursuant to the Clean Air Act to numerous other electric utilities seeking to determine whether these utilities also engaged in activities that may have
been in violation of the Clean Air Act's NSR requirements.

To
date, several utilities have reached formal agreements with the United States (or reached agreements-in-principle) to resolve alleged NSR violations. All of
the settlements have included the installation of additional pollution controls, supplemental environment projects, and the payment of civil penalties. Some of the settlements have also included the
retirement or repowering of coal-fired generating units. The agreements provide for a phased approach to achieving required emission reductions over the next 10 to 15 years. The
total cost of some of these settlements exceeds $1 billion; the civil penalties agreed to by these utilities range between $1 million and $10 million. Because of the uncertainty
created by the Bush administration's review of the NSR regulations and NSR enforcement proceedings, some of the settlements referred to above have not been finalized. However, in January 2002,
the Department of Justice completed its review and concluded that "the EPA has a reasonable basis for arguing that the enforcement actions are consistent with both the Clean Air Act and the
Administrative Procedure Act." Accordingly, the Department of Justice has continued to prosecute NSR enforcement cases against electric utilities, with some cases scheduled for trial in 2003.

On
December 31, 2002, the Environmental Protection Agency finalized a rule to improve the NSR program. This rule is intended to provide additional flexibility with respect to NSR
by, among other things, modifying the method by which a facility calculates the emissions' increase from a plant modification; exempting, for a period of ten years, units that have complied with NSR
requirements or otherwise installed pollution control technology that is equivalent to what would have been required by NSR; and allowing a facility to make modifications without being required to
comply with NSR if the facility maintained emissions below plantwide applicability limits. The rule became effective on March 3, 2003, although states, industry groups and environmental
organizations have filed litigation challenging various aspects of the regulation. In addition to this regulation, the Environmental Protection Agency has also proposed a regulation to clarify the
"routine maintenance and repair" exclusion contained in the Environmental Protection Agency's regulations. While Midwest Generation will carefully evaluate both of these rules to determine impacts on
its operations, the proposed rule will be of greater interest. By more clearly defining "routine maintenance, repair and replacement", this rule will allow Midwest Generation to determine what
investments can be made at its existing plants to improve the safety, efficiency, and reliability of its operations without triggering NSR permitting requirements.

On
February 21, 2003, Midwest Generation received a request for information regarding past operations, maintenance and physical changes at its coal plants from the Environmental
Protection Agency. Other than the request for information, no proceedings have been initiated by the Environmental Protection Agency relating to its coal plants. Depending on the outcome of the review
and regulatory developments, Midwest Generation could be required to invest in additional pollution control requirements, over and above the upgrades it is planning to install, and could be subject to

55

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fines and penalties. Midwest Generation cannot estimate the outcome of these discussions or the potential costs of investing in additional pollution control requirements, fines or penalties at this
time.

United Nations Framework Convention on Climate Change.Since the adoption of the United Nations Framework Convention on
Climate Change in 1992, there has been worldwide attention with respect to greenhouse gas emissions. In December 1997, the Clinton administration participated in the Kyoto, Japan negotiations,
where the basis of a Climate Change treaty was formulated. Under the treaty, known as the Kyoto Protocol, the United States would be required by 2008-2012 to reduce its greenhouse gas
emissions by 7% from 1990 levels.

The
Kyoto Protocol has yet to be submitted to the U.S. Senate for ratification. In March 2001, the Bush administration announced that the United States would not ratify the Kyoto
Protocol, but would instead offer an alternative. On February 14, 2002, President Bush announced objectives to slow the growth of greenhouse gas emissions by reducing the amount of greenhouse
gas emissions per unit of economic output by 18% by 2012 and to provide funding for climate-change related programs. The President's proposed program does not include mandatory reductions of
greenhouse gas emissions. However, various bills have been, or are expected to be, introduced in Congress to require greenhouse gas emission reductions and to address other issues related to climate
change. Apart from the Kyoto Protocol, Midwest Generation may be impacted by future federal or state legislation relating to controlling greenhouse gas emissions.

Notwithstanding
the Bush administration position, environment ministers from around the world have reached a compromise agreement on the mechanics and rules of the Kyoto Protocol. The
compromise agreement is believed to clear the way for countries to begin the treaty ratification process.

For
the treaty to come into effect, approximately 55 countries that also represent at least 55% of the greenhouse gas emissions of the developed world must ratify it. With Canada
becoming the 100th country to ratify the agreement in December 2002, the Kyoto Protocol can account for 43.7% of carbon dioxide emissions. Russia also indicated at the Johannesburg Summit on
September 2002 its desire to ratify the treaty. Representing 17.4% of the developed world's greenhouse gas emissions, Russian ratification is now essential to bring the treaty into effect.

If
Midwest Generation does become subject to limitations on emissions of carbon dioxide from its fossil fuel-fired electric generating plants, these requirements could have a
significant economic impact on Midwest Generation's operations.

United Nations Proposed Framework Convention on Mercury.The United Nations Environment Programme (UNEP) has convened a
Global Mercury Assessment Working Group which met in Geneva in September 2002 and finalized a global mercury assessment report for submittal to the UNEP Governing Council at the Global
Ministerial Environment Forum in Nairobi, Kenya, February 2003. Based upon the report's key findings, the working group concluded that "there is sufficient evidence of significant global
adverse impacts to warrant international action to reduce the risks to human health and the environment arising from the release of mercury into the environment."

The
United States has indicated that it will support a decision to take international action on mercury at the Global Ministerial Environment Forum. However, the United States has
further stated that it does not support negotiation of a legally-binding convention at this time. In general, the United States approach: 1) agrees that there is sufficient evidence of adverse
impacts of mercury to warrant international action; 2) urges countries to take actions within the context of their national circumstances to identify exposed populations and to reduce
anthropogenic emissions of mercury; 3) recommends the establishment of a "Mercury Program" within UNEP; 4) recommends coordination between UNEP and other international organizations that
work on mercury issues such as the World Health Organization; and 5) asks countries to make voluntary contributions to support efforts of the Mercury Program under UNEP.

56

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If
Midwest Generation does become subject to limitations on emissions of mercury from its coal-fired electric generating plants, these requirements could have a significant
economic impact on its operations.

New Accounting Standards

Effective January 1, 2003, Midwest Generation adopted Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations." SFAS No. 143 requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially
recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is increased to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss
upon settlement. Midwest Generation does not expect that adoption of this new accounting standard will have a material impact on its financial statements.

In
April 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical Corrections" which supersedes previous guidance for reporting gains and losses from extinguishment of debt and accounting for leases, among
other things. The portion of the Statement relating to the rescission of SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt" requires that any gain or loss on extinguishment of
debt that was classified as an extraordinary item that does not meet the unusual in nature and infrequent of occurrence criteria in APB Opinion No. 30, "Reporting the Results of
OperationsReporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions" shall be reclassified. The standard,
effective on January 1, 2003, was adopted by Midwest Generation in the fourth quarter of 2002 and did not have a material impact on its financial statements.

Effective
January 1, 2003, Midwest Generation adopted Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities." SFAS No. 146 requires that liabilities for costs associated with exit or disposal activities initiated after December 31, 2002 be recognized when incurred, rather than at
the date of a commitment to an exit or disposal plan. Midwest Generation does not expect that this standard will have a material impact on its financial statements.

In
November 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards Interpretation No. 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." This interpretation establishes reporting requirements to be made by a guarantor about its obligations under
certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and initial measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. See "Contractual Obligations, Commitments and ContingenciesGuarantees and Indemnities."

In
January 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards Interpretation No. 46, "Consolidation of Variable Interest
Entities." This interpretation of Accounting Research Bulletin No. 51, "Consolidated Financial Statements," addresses consolidation by business enterprises of variable interest entities. The
primary objective of the interpretation is to provide guidance on the identification of, and financial reporting for, entities over which control is achieved through means other than voting rights;
such entities are known as variable-interest entities. This interpretation applies to variable interest entities created after January 31, 2003,

57

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and applies to variable interest entities in which Midwest Generation holds a variable interest that it acquired before February 1, 2003, beginning July 1, 2003. Midwest Generation does
not expect that this standard will have a material impact on its financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information responding to Item 7A is filed with this report under "Item 7. Management's Discussion and Analysis of Results of Operations and Financial Condition."

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

|Financial Statements: |                                                                                       | 
|--------------------- | ------------------------------------------------------------------------------------- | 
|                      | Report of Independent Accountants                                                     | 
|                      | Balance Sheets at December 31, 2002 and 2001                                          | 
|                      | Statements of Operations for the years ended December 31, 2002, 2001 and 2000         | 
|                      | Statements of Comprehensive Loss for the years ended December 31, 2002, 2001 and 2000 | 
|                      | Statements of Member's Equity for the years ended December 31, 2002, 2001 and 2000    | 
|                      | Statements of Cash Flows for the years ended December 31, 2002, 2001 and 2000         | 
|                      | Notes to Financial Statements                                                         | 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

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MIDWEST GENERATION, LLC  REPORT OF INDEPENDENT ACCOUNTANTS

To
the Member and Board of Managers of Midwest Generation, LLC:

In
our opinion, the financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Midwest Generation, LLC at
December 31, 2002, and the results of its operations and its cash flows for year ended December 31, 2002 in conformity with accounting principles generally accepted in the United States
of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) on page 95 present fairly, in all material respects, the
information set forth therein when read in conjunction with the related financial statements. These financial statements and financial statement schedule are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audit. We conducted our audit of these statements in accordance with
auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The financial statements
of the Company as of December 31, 2001 and for the two years in the period ended December 31, 2001 were audited by other independent accountants who have ceased operations. Those
independent accountants expressed an unqualified opinion on those financial statements and financial statement schedule in their report dated March 25, 2002.

The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5 to the financial statements, the
Company has $911 million in debt obligations that mature in December 2003. Uncertainty regarding the ability of the Company to repay, extend or refinance this obligation raises
substantial doubt about its ability to continue as a going concern. Management's plan in regard to this matter is described in Note 5. The financial statements do not include any adjustments
that might result from the resolution of this uncertainty.

PricewaterhouseCoopers
LLP
Los Angeles, California
March 25, 2003

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To
the Board of Managers of Midwest Generation, LLC:

We
have audited the accompanying balance sheets of Midwest Generation, LLC (a Delaware limited liability company) as of December 31, 2001 and 2000, and the related statements of
operations, comprehensive loss, member's equity and cash flows for the years ended December 31, 2001 and 2000 and the period from inception (July 12, 1999) to December 31, 1999.
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Midwest Generation, LLC as of
December 31, 2001 and 2000, and the results of its operations and its cash flows for the year ended December 31, 2001 and 2000 and the period from inception (July 12, 1999) to
December 31, 1999 in conformity with accounting principles generally accepted in the United States.

|                                         |  | Arthur Andersen LLP
|---------------------------------------- |  | -------------------
|Orange County, California
March 25, 2002 |  |                    

The aforementioned report on the balance sheets of Midwest Generation, LLC as of December 31, 2001 and 2000, and the related statements of operations, member's equity,
other comprehensive income (loss) and cash flows for each of the three years in the period ended December 31, 2001 is a copy of a previously issued Arthur Andersen LLP report. Arthur Andersen
LLP has not reissued this report.

61

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MIDWEST GENERATION, LLC        BALANCE SHEETS        (In thousands)

|                                |                                                                  | December 31,                     
|------------------------------- | ---------------------------------------------------------------- | ---------------------------------
|
|Assets                          |                                                                  |                                  
|Current Assets                  |                                                                  |                                  
|                                | Cash and cash equivalents                                        |                                  
|                                | Accounts receivable, net of allowance of $4,269 in 2002 and 2001 |                                  
|                                | Due from affiliates                                              |                                  
|                                | Fuel inventory                                                   |                                  
|                                | Spare parts inventory                                            |                                  
|                                | Interest receivable from affiliate                               |                                  
|                                | Assets under price risk management                               |                                  
|                                | Other current assets                                             |                                  
|                                |                                                                  |                                  
|                                |                                                                  | Total current assets             
|                                |                                                                  |                                  
|Property, Plant and Equipment   |                                                                  |                                  
|                                | Less accumulated depreciation                                    |                                  
|                                |                                                                  |                                  
|                                |                                                                  | Net property, plant and equipment
|                                |                                                                  |                                  
|Notes receivable from affiliate |                                                                  |                                  
|Other assets                    |                                                                  |                                  
|                                |                                                                  |                                  
|Total Assets                    |                                                                  | $                                
|                                |                                                                  |                                  

The
accompanying notes are an integral part of these financial statements.

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MIDWEST GENERATION, LLC        BALANCE SHEETS        (In thousands)

|                                                                   |                                                                                  | December 31,              |          
|------------------------------------------------------------------ | -------------------------------------------------------------------------------- | ------------------------- | ---------
|
|Liabilities and Member's Equity                                    |                                                                                  |                           |          
|Current Liabilities                                                |                                                                                  |                           |          
|                                                                   | Accounts payable                                                                 |                           | $        
|                                                                   | Accrued liabilities                                                              |                           |          
|                                                                   | Due to affiliates                                                                |                           |          
|                                                                   | Interest payable                                                                 |                           |          
|                                                                   | Interest payable to affiliates                                                   |                           |          
|                                                                   | Liabilities under price risk management                                          |                           |          
|                                                                   | Current portion of subordinated long-term debt with affiliate                    |                           |          
|                                                                   | Current portion of lease financing                                               |                           |          
|                                                                   |                                                                                  |                           |          
|                                                                   |                                                                                  | Total current liabilities |          
|                                                                   |                                                                                  |                           |          
|Subordinated revolving line of credit with affiliate               |                                                                                  |                           | 1,694,282
|Subordinated long-term debt with affiliate, net of current portion |                                                                                  |                           | 808,308  
|Lease financing, net of current portion                            |                                                                                  |                           | 2,169,855
|Deferred taxes                                                     |                                                                                  |                           | 73,354   
|Deferred coal and transportation costs                             |                                                                                  |                           | 50,000   
|Benefit plans and other                                            |                                                                                  |                           | 68,430   
|                                                                   |                                                                                  |                           |          
|Total Liabilities                                                  |                                                                                  |                           | 6,043,328
|                                                                   |                                                                                  |                           |          
|Commitments and Contingencies(Notes 9 and 10)                      |                                                                                  |                           |          
|Member's Equity                                                    |                                                                                  |                           |          
|                                                                   | Membership interests, no par value; 100 units authorized, issued and outstanding |                           |          
|                                                                   | Additional paid-in capital                                                       |                           |          
|                                                                   | Accumulated deficit                                                              |                           |          
|                                                                   | Accumulated other comprehensive loss                                             |                           |          
|                                                                   |                                                                                  |                           |          
|Total Member's Equity                                              |                                                                                  |                           | 457,291  
|                                                                   |                                                                                  |                           |          
|Total Liabilities and Member's Equity                              |                                                                                  | $                         | 6,500,619
|                                                                   |                                                                                  |                           |          

The
accompanying notes are an integral part of these financial statements.

63

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MIDWEST GENERATION, LLC        STATEMENTS OF OPERATIONS        (In thousands)

|                         |                                                         | Years Ended December 31, |        
|------------------------ | ------------------------------------------------------- | ------------------------ | -------
|
|Operating Revenues       |                                                         |                          |        
|                         | Energy revenues                                         |                          | $      
|                         | Capacity revenues                                       |                          |        
|                         | Energy and capacity revenues from marketing affiliate   |                          |        
|                         | Income (loss) from price risk management                |                          |        
|                         |                                                         |                          |        
|                         |                                                         | Total operating revenues |        
|                         |                                                         |                          |        
|Operating Expenses       |                                                         |                          |        
|                         | Fuel                                                    |                          |        
|                         | Plant operations                                        |                          |        
|                         | Asset impairment and other charges                      |                          |        
|                         | Settlement of postretirement employee benefit liability |                          |        
|                         | Depreciation and amortization                           |                          |        
|                         | Administrative and general                              |                          |        
|                         |                                                         |                          |        
|                         |                                                         | Total operating expenses |        
|                         |                                                         |                          |        
|                         | Operating income                                        |                          |        
|                         |                                                         |                          |        
|Other Income (Expense)   |                                                         |                          |        
|                         | Interest income and other                               |                          |        
|                         | Interest expense                                        |                          |        
|                         |                                                         |                          |        
|                         |                                                         | Total other expense      |        
|                         |                                                         |                          |        
|Loss before income taxes |                                                         |                          | (25,350
|Benefit for income taxes |                                                         |                          | 9,520  
|                         |                                                         |                          |        
|Net Loss                 |                                                         | $                        | (15,830
|                         |                                                         |                          |        

The
accompanying notes are an integral part of these financial statements.

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MIDWEST GENERATION, LLC        STATEMENTS OF COMPREHENSIVE LOSS        (In thousands)

|                                         |                                                                         | Years Ended December 31,                                                                                                                              |        
|---------------------------------------- | ----------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------- | -------
|
|Net Loss                                 |                                                                         | $                                                                                                                                                     | (15,830
|Other comprehensive expense, net of tax: |                                                                         |                                                                                                                                                       |        
|                                         | Unrealized gains (losses) on derivatives qualified as cash flow hedges: |                                                                                                                                                       |        
|                                         |                                                                         | Cumulative effect of change in accounting for derivatives, net of income tax expense of $15,870                                                       |        
|                                         |                                                                         | Other unrealized holding gains (losses) arising during period, net of income tax expense (benefit) of $(614) and $430 for 2002 and 2001, respectively |        
|                                         |                                                                         | Reclassification adjustment for gains included in net loss, net of income tax expense of $25 and $15,124 for 2002 and 2001, respectively              |        
|                                         |                                                                         |                                                                                                                                                       |        
|Other comprehensive expense              |                                                                         |                                                                                                                                                       | (999   
|                                         |                                                                         |                                                                                                                                                       |        
|Comprehensive Loss                       |                                                                         | $                                                                                                                                                     | (16,829
|                                         |                                                                         |                                                                                                                                                       |        

The
accompanying notes are an integral part of these financial statements.

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MIDWEST GENERATION, LLC        STATEMENTS OF MEMBER'S EQUITY        (In thousands)

|                             |                                   | Membership
Interests |   | Additional
Paid |   | Accumulated
Deficit |        | Accumulated
Other
Comprehensive
Loss |          | Member's
Equity |  
|---------------------------- | --------------------------------- | -------------------- | - | --------------- | - | ------------------- | ------ | ------------------------------------ | -------- | --------------- | -
|Balance at December 31, 1999 |                                   | $                    |  |                 | $ | 650,816             |        | $                                    | (12,357  | )               | $
|                             | Non-cash contribution of services |                      |   |                |   |                     | 7,815  |                                      |          |                |  
|                             | Net loss                          |                      |   |                |   |                     |       |                                      |          | (96,374         | )
|                             |                                   |                      |   |                 |   |                     |        |                                      |          |                 |  
|Balance at December 31, 2000 |                                   |                      |  |                 |   | 658,631             |        |                                      | (108,731 | )               |  
|                             | Non-cash contribution of services |                      |   |                |   |                     | 11,297 |                                      |          |                |  
|                             | Net loss                          |                      |   |                |   |                     |       |                                      |          | (97,664         | )
|                             |                                   |                      |   |                 |   |                     |        |                                      |          |                 |  
|Balance at December 31, 2001 |                                   |                      |  |                 |   | 669,928             |        |                                      | (206,395 | )               |  
|                             | Non-cash contribution of services |                      |   |                |   |                     | 10,587 |                                      |          |                |  
|                             | Net loss                          |                      |   |                |   |                     |       |                                      |          | (15,830         | )
|                             | Other comprehensive loss          |                      |   |                |   |                     |       |                                      |          |                |  
|                             |                                   |                      |   |                 |   |                     |        |                                      |          |                 |  
|Balance at December 31, 2002 |                                   | $                    |  |                 | $ | 680,515             |        | $                                    | (222,225 | )               | $
|                             |                                   |                      |   |                 |   |                     |        |                                      |          |                 |  

The
accompanying notes are an integral part of these financial statements.

66

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MIDWEST GENERATION, LLC        STATEMENTS OF CASH FLOWS        (In thousands)

|                                                 |                                                                                           | Years Ended December 31,                                |       
|------------------------------------------------ | ----------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------
|
|Cash Flows From Operating Activities             |                                                                                           |                                                         |       
|                                                 | Net loss                                                                                  |                                                         | $     
|                                                 | Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |                                                         |       
|                                                 |                                                                                           | Depreciation and amortization                           |       
|                                                 |                                                                                           | Provision for doubtful accounts                         |       
|                                                 |                                                                                           | Non-cash contribution of services                       |       
|                                                 |                                                                                           | Asset impairment                                        |       
|                                                 |                                                                                           | Settlement of postretirement employee benefit liability |       
|                                                 |                                                                                           | Loss on asset disposal                                  |       
|                                                 |                                                                                           | Deferred taxes                                          |       
|                                                 | (Increase) decrease in accounts receivable                                                |                                                         |       
|                                                 | Increase in due to/from affiliates                                                        |                                                         |       
|                                                 | (Increase) decrease in inventory                                                          |                                                         |       
|                                                 | (Increase) decrease in interest receivable from affiliate                                 |                                                         |       
|                                                 | Increase in other current assets                                                          |                                                         |       
|                                                 | Increase in accounts payable                                                              |                                                         |       
|                                                 | Increase (decrease) in accrued liabilities                                                |                                                         |       
|                                                 | Increase in interest payable                                                              |                                                         |       
|                                                 | Increase (decrease) in other liabilities                                                  |                                                         |       
|                                                 | Increase (decrease) in net liabilities under price risk management                        |                                                         |       
|                                                 |                                                                                           |                                                         |       
|                                                 |                                                                                           | Net cash provided by (used in) operating activities     |       
|                                                 |                                                                                           |                                                         |       
|Cash Flows From Financing Activities             |                                                                                           |                                                         |       
|                                                 | Borrowings from subordinated long-term debt with affiliate                                |                                                         |       
|                                                 | Repayments of subordinated long-term debt with affiliate                                  |                                                         |       
|                                                 | Borrowings from subordinated revolving line of credit with affiliate                      |                                                         |       
|                                                 | Repayments of subordinated revolving line of credit with affiliate                        |                                                         |       
|                                                 | Capital lease obligation                                                                  |                                                         |       
|                                                 | Repayment of capital lease obligation                                                     |                                                         |       
|                                                 |                                                                                           |                                                         |       
|                                                 |                                                                                           | Net cash provided by (used in) financing activities     |       
|                                                 |                                                                                           |                                                         |       
|Cash Flows From Investing Activities             |                                                                                           |                                                         |       
|                                                 | Purchase of facilities                                                                    |                                                         |       
|                                                 | Capital expenditures                                                                      |                                                         |       
|                                                 | Increase in restricted cash                                                               |                                                         |       
|                                                 | Loan to affiliate                                                                         |                                                         |       
|                                                 | Repayments of loan from affiliate                                                         |                                                         |       
|                                                 | Proceeds from sale of assets                                                              |                                                         |       
|                                                 |                                                                                           |                                                         |       
|                                                 |                                                                                           | Net cash used in investing activities                   |       
|                                                 |                                                                                           |                                                         |       
|Net increase in cash and cash equivalents        |                                                                                           |                                                         | 22,017
|Cash and cash equivalents at beginning of period |                                                                                           |                                                         | 52,635
|                                                 |                                                                                           |                                                         |       
|Cash and cash equivalents at end of period       |                                                                                           | $                                                       | 74,652
|                                                 |                                                                                           |                                                         |       

The
accompanying notes are an integral part of these financial statements.

67

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MIDWEST GENERATION, LLC        NOTES TO FINANCIAL STATEMENTS        (Dollars in thousands)

Note 1. General

Midwest Generation, LLC, which is referred to as Midwest Generation, a wholly owned subsidiary of Edison Mission Midwest Holdings Co., an indirect wholly owned
subsidiary of Edison Mission Energy, which is referred to as EME, and an indirect wholly owned subsidiary of Edison International, is a Delaware limited liability company formed on July 12,
1999 for the purpose of obtaining financing and acquiring, owning and operating multiple fossil-fuel electric generating units located within the state of Illinois, which are referred to
as the Illinois Plants, for the purpose of producing electric energy.

On
December 15, 1999, Midwest Generation completed its acquisition of 100% of the ownership interests in the Illinois Plants and assumed specified liabilities from Commonwealth
Edison. The accompanying financial statements reflect the operations of the Illinois Plants commencing from the date of acquisition. The acquisition has been accounted for utilizing the purchase
method. The purchase price was allocated to the assets acquired and liabilities assumed based upon their respective fair market values. The acquisition was financed through a capital contribution by
Edison Mission Midwest Holdings of approximately $650 million and subordinate debt from another subsidiary of Edison Mission Midwest Holdings of approximately $3.4 billion.

Concurrent
with the acquisition, Midwest Generation assigned its right to purchase the Collins Station, a 2,698 MW gas and oil-fired generating station located in Illinois,
to four third-party entities. After this assignment, and the purchase of the facility by third parties, an affiliate of Midwest Generation leased and Midwest Generation entered into subleases of the
Collins Station, each with a term of 33.75 years. These subleases have been accounted for as a lease financing for accounting purposes. See "Note 10. Lease Commitments," for
more information.

Midwest
Generation currently owns or leases approximately 9,287 MW as a result of the acquisition, consisting of the following:



In
connection with the acquisition of these power generation assets, Midwest Generation entered into three five-year power purchase agreements for the coal-fired
stations, the Collins Station, and the peaker stations with Commonwealth Edison. Subsequently, Commonwealth Edison assigned its rights and obligations under these power purchase agreements to Exelon
Generation. Midwest Generation derived 99% of its energy and capacity revenues from Exelon Generation under these power purchase agreements for all three years ended December 31, 2002, 2001 and
2000. Midwest Generation has entered into a contract with a marketing affiliate to market energy that is to be sold into the wholesale market as permitted under the power purchase agreements, to
engage in hedging activities and to provide scheduling and other services. The marketing affiliate also purchases fuel, other than coal, and enters into fuel hedging arrangements on Midwest
Generation's behalf.

68

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Reclassifications

Certain amounts in the prior period have been reclassified to conform to the current year's presentation.

Note 2. Summary of Significant Accounting Policies

Management's Use of Estimates in Financial Statements

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Midwest Generation considers cash and cash equivalents to include cash and short-term investments with original maturities of three months or less.

Inventory

Inventory consists of spare parts, natural gas, coal and fuel oil and is stated at the lower of weighted average cost or market. In 2001, Midwest Generation
recorded a $5.1 million loss due to a lower of cost or market adjustment on its oil inventory at the Collins facility.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation and amortization are computed on a straight-line basis over the following estimated
useful lives:

Power plant facilities

15-40 yearsEmission allowances

25-40 yearsCapitalized leased equipment

30-33.75 yearsFurniture, office equipment and vehicles

3-7 years


As
part of the acquisition of the Illinois Plants, Midwest Generation acquired emission allowances under the Environmental Protection Agency's Acid Rain Program. Although the emission
allowances granted under this program are freely transferable, Midwest Generation intends to use substantially all the emission allowances in the normal course of its business to generate electricity.
Accordingly, Midwest Generation has classified emission allowances expected to be used to generate power as part of property, plant and equipment. Acquired emission allowances are amortized over the
estimated lives of the Illinois Plants on a straight-line basis. Effective August 2000, the completion date of the Powerton/Joliet sale-leaseback transactions, Midwest
Generation changed the period of amortization of emission allowances related to these plants to the periods of the respective leases.

69

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Impairment of Long-Lived Assets

Midwest Generation periodically evaluates the potential impairment of its long-lived assets based on a review of estimated future cash flows expected
to be generated. If the carrying amount of the asset exceeds the amount of the expected future cash flows, undiscounted and without interest charges, then an impairment loss for its
long-lived assets is recognized in accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets."

Deferred Coal and Transportation Costs

In connection with the acquisition, Midwest Generation assumed certain contracts for the future purchase of coal and transportation. The prices for coal and
transportation as defined in the contracts exceeded the estimated fair market value of the coal and transportation contracts by $126.3 million at the date of acquisition, resulting in a
liability. This liability is reduced as purchases are made over the term of the contacts.

Repairs and Maintenance

Certain major pieces of Midwest Generation's equipment require repairs and maintenance on a periodic basis. These costs, including major maintenance costs, are
expensed as incurred.

Revenue Recognition

Revenues and related costs are recorded as electricity is generated or as services are provided.

Derivative Instruments and Hedging Activities

Effective January 1, 2001, Midwest Generation adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." The Statement established accounting and reporting standards requiring that derivative instruments be recorded in the balance sheet as either an asset or liability measured at
their fair value unless they meet an exception. The Statement requires that changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are
met. For derivatives that qualify for hedge accounting, depending on the nature of the hedge, changes in fair value are either offset by changes in the fair value of the hedged assets, liabilities or
firm commitments through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value is
immediately recognized in earnings.

Effective
January 1, 2001, Midwest Generation recorded all derivatives at fair value unless the derivatives qualified for the normal sales and purchases exception. The power
purchase agreements with Exelon Generation and coal contracts do not qualify as derivatives. In 2000, Midwest Generation's affiliate entered into calendar year 2001 financial options as a hedge of its
price risk associated with expected natural gas purchases for the Collins Station. During the fourth quarter of 2000, Midwest Generation determined that it was no longer probable that it would
purchase natural gas for the Collins Station during 2001. This decision resulted from sustained gas prices far greater than were contemplated when Midwest Generation originally projected its 2001 gas
needs and the fact that

70

---

Midwest Generation can use fuel oil interchangeably with natural gas at the Collins Station. Upon adoption of SFAS No. 133, the deferred gain of $20.8 million, after tax, which existed
at the point Midwest Generation determined the purchase of natural gas being hedged by these options was no longer probable, was recorded as an unrealized holding gain reflected in accumulated other
comprehensive income in the balance sheet. There was no cumulative effect on prior periods' net income resulting from the change in accounting for derivatives in accordance with SFAS No. 133.

Income Taxes

Midwest Generation is included in the consolidated federal and state income tax returns of Edison International and is party to a tax-allocation
agreement with its parent Edison Mission Midwest Holdings. As long as Edison International continues to own, directly or indirectly, at least 80% of the voting power of the stock of EME and its
existing subsidiaries and at least 80% of the value of such stock, Midwest Generation will be included in the consolidated federal and state income tax returns of
Edison International. In accordance with the agreement and the tax-allocation procedures that have been in effect since Midwest Generation's formation, its current tax liability or benefit
is generally determined on a separate return basis, except for calculating consolidated state income taxes, for which Midwest Generation uses the long-term state tax apportionment factors
of the Edison International group. Also, while Midwest Generation is generally subject to separate return limitations for net losses, under the tax-allocation agreement it is permitted to
transfer to Edison Mission Midwest Holdings, or its subsidiaries, net operating loss benefits which would not yet be realized in a separate return in exchange for a reduction in Midwest Generation's
intercompany account balances (including subordinated loans). During the fourth quarter of 2002, Midwest Generation realized $189.9 million of the tax receivable on its books through a
reduction in amounts owed under its subordinated loan agreement with Edison Mission Overseas Co.

Midwest
Generation accounts for deferred income taxes using the asset-and-liability method, wherein deferred tax assets and liabilities are recognized for future
tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities using enacted rates.

New Accounting Standards

Effective January 1, 2003, Midwest Generation adopted Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations." SFAS No. 143 requires entities to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially
recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is increased to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation for its recorded amount or incurs a gain or loss
upon settlement. Midwest Generation does not expect that adoption of this new accounting standard will have a material impact on its financial statements.

In
April 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical Corrections" which supersedes previous guidance for reporting gains and losses from extinguishment of debt and accounting for leases, among
other things. The portion of the

71

---

Statement relating to the rescission of SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt" requires that any gain or loss on extinguishment of debt that was classified as an
extraordinary item that does not meet the unusual in nature and infrequent of occurrence criteria in APB Opinion No. 30, "Reporting the Results of OperationsReporting the Effects
of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions" shall be reclassified. The standard, effective on January 1, 2003, was
adopted by Midwest Generation in the fourth quarter of 2002 and did not have a material impact on its financial statements.

Effective
January 1, 2003, Midwest Generation adopted Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities." SFAS No. 146 requires that liabilities for costs associated with exit or disposal activities initiated after December 31, 2002 be recognized when incurred, rather than at
the date of a commitment to an exit or disposal plan. Midwest Generation does not expect that this standard will have a material impact on its financial statements.

In
November 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards Interpretation No. 45, "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." This interpretation establishes reporting requirements to be made by a guarantor about its obligations under
certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The initial recognition and initial measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after
December 31, 2002. See disclosure regarding guarantees and indemnities in "Note 9. Commitments and Contingencies."

In
January 2003, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards Interpretation No. 46, "Consolidation of Variable Interest
Entities." This interpretation of Accounting Research Bulletin No. 51, "Consolidated Financial Statements," addresses consolidation by business enterprises of variable interest entities. The
primary objective of the interpretation is to provide guidance on the identification of, and financial reporting for, entities over which control is achieved through means other than voting rights;
such entities are known as variable-interest entities. This interpretation applies to variable interest entities created after January 31, 2003, and applies to variable interest entities in
which Midwest Generation holds a variable interest that it acquired before February 1, 2003, beginning July 1, 2003. Midwest Generation does not expect that this standard will have a
material impact on its financial statements.

72

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Note 3. Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) consisted of the following:

Unrealized Losses
on Cash
Flow Hedges

Accumulated Other
Comprehensive LossBalance at December 31, 2001

$


$
Current period change


(999
)

(999
)Balance at December 31, 2002

$
(999
)
$
(999
)


Unrealized
losses on cash flow hedges at December 31, 2002 include forward energy sales contracts that did not meet the normal sales and purchases exception under SFAS
No. 133. These losses arise because current forecasts of future electricity prices are higher than Midwest Generation's contract prices. As Midwest Generation's hedged positions are realized,
approximately $1 million, after tax, of the net unrealized losses on cash flow hedges will be reclassified into earnings during the next twelve months. Actual amounts ultimately reclassed to
earnings over the next twelve months could vary materially from this estimated amount as a result of changes in market conditions. The maximum period over which a cash flow hedge is designated is
through December 31, 2003.

Under
SFAS No. 133, the portion of a cash flow hedge that does not offset the change in value of the transaction being hedged, which is commonly referred to as the ineffective
portion, is immediately recognized in earnings. Midwest Generation recorded a net $0.2 million loss during the year ended December 31, 2002, representing the amount of cash flow hedges'
ineffectiveness, reflected in income (loss) from price risk management in the income statement.

Note 4. Property, Plant and Equipment

At December 31, 2002 and 2001, property, plant and equipment consisted of the following:

2002

2001Land

$
34,949

$
34,949Power plant facilities


2,121,410


1,760,582Emission allowances


867,350


867,350Construction in progress


27,551


49,900Equipment, furniture and fixtures


6,974


6,605Plant and equipment under lease financing


2,227,000


2,227,0005,285,234


4,946,386Accumulated depreciation and amortization


(480,097
)

(304,466
)Property, plant and equipment, net

$
4,805,137

$
4,641,920


Property,
plant and equipment includes assets which are capitalized under lease financing. The total consists of $860 million for the Collins Station and $1.367 billion for
the aggregate purchase of the Powerton and Joliet stations. Midwest Generation recorded amortization expense related to the leased facilities of $68.1 million, $68.1 million and
$40.6 million for 2002, 2001 and 2000, respectively. Accumulated amortization related to the leased facilities was $177.9 million, $109.8 million and $41.7 million at
December 31, 2002, 2001 and 2000, respectively.

73

---



Note 5. Long-Term Debt

In December 1999, Midwest Generation entered into a subordinated loan agreement ("Subordinated Loan Agreement") with another subsidiary of Edison Mission
Midwest Holdings, Edison Mission Overseas Co., with terms matching those of a credit agreement as described further below under Parent Company Credit Agreement. Under the terms of the subordinated
loan agreement, Midwest Generation is required to make payments to Edison Mission Overseas similar to those payments made by Edison Mission Midwest Holdings under the Credit Agreement. As of
December 31, 2002 and 2001, the borrowings under the Subordinated Loan Agreement were approximately $1.7 billion.

In
December 1999, Midwest Generation also entered into a subordinated revolving loan agreement (the Subordinated Revolving Line of Credit) with Edison Mission Overseas for up to
$2 billion, which was increased for up to $2.5 billion in May 2001. Amounts outstanding under the Subordinated Revolving Line of Credit bear interest at a fixed rate of 8.0% with
payments due quarterly. The outstanding principal balance is due in 2034. As of December 31, 2002 and 2001, total draws under the Subordinated Revolving Line of Credit were approximately
$1.69 billion and $1.95 billion, respectively.

For
the periods ended December 31, 2002, 2001 and 2000, under the Subordinated Revolving Line of Credit and the Subordinated Loan Agreement, Midwest Generation incurred and
accrued interest charges of approximately $227.1 million, $256.9 million and $272.6 million, respectively.

At
December 31, 2002, the future maturities of the debt are as follows:

Years Ending December 31,2003

$
911,0002004


808,3082005


2006


2007


Thereafter


1,694,282Total

$
3,413,590


Management Plans for Refinancing $911 Million Debt Maturity

Edison Mission Midwest Holdings is not expected to have sufficient cash to repay its $911 million debt due to commercial lenders in December 2003.
Midwest Generation plans to extend or refinance its subordinated loan agreements as part of Edison Mission Midwest Holdings' plan to extend or refinance its $911 million debt obligation
(guaranteed by Midwest Generation) prior to its expiration in December 2003. At December 31, 2002, Edison Mission Midwest Holdings had cash and cash equivalents of $320 million
and $50 million deposited into a restricted cash account. Management believes that Midwest Generation will generate positive cash flow from operations during 2003 which, in combination with
Edison Mission Midwest Holdings' existing cash position, will contribute positively to discussions with lenders to extend or refinance the $911 million debt obligation. Completion of this
extension or refinancing is subject to a number of uncertainties, including the ability of Midwest Generation to generate funds during 2003 and the availability of new credit from financial
institutions on acceptable terms in light of industry conditions. Accordingly, there is no assurance that Edison

74

---

Mission Midwest Holdings will be able to extend or refinance this debt when it becomes due or that the terms will not be substantially different from those under the current credit facility.

Parent Company Credit Agreement

Edison Mission Midwest Holdings has a credit agreement with a number of commercial lending institutions for a combination of loans and lines of credit aggregating
$1.869 billion. The financing consisted of (1) an $911 million revolving credit facility due 2003, referred to as Tranche A, (2) an $808.3 million revolving credit
facility due 2004, referred to as Tranche B, and (3) a $150 million working
capital facility due 2004, referred to as Tranche C. Under Tranche C, Edison Mission Midwest Holdings had available $150 million of borrowing capacity at both December 31, 2002 and 2001.

Amounts
outstanding under the credit agreement bear interest at variable Eurodollar rates or Base rates as defined in the credit agreement, at the option of Edison Mission Midwest
Holdings. If Edison Mission Midwest Holdings elects to pay Eurodollar rates, interest costs include a margin of 0.80% to 2.25% on Tranche A and 0.75% to 2.00% on Tranches B and C, depending on Edison
Mission Midwest Holdings' debt rating. At December 31, 2002, the margin was 2.25% on Tranche A and 2.00% on each of Tranches B and C. At December 31, 2001, the
margin was 1.20% on Tranche A and 1.15% on each of Tranches B and C. The effective interest rate was 3.66% on Tranche A and 3.41% on Tranche B at December 31, 2002.

Additionally,
Edison Mission Midwest Holdings pays a facility fee of 0.20% to 1.00% on Tranche A and 0.25% to 1.25% on each of Tranches B and C, depending on Edison Mission
Midwest Holdings' current debt rating, on the total outstanding commitment irrespective of usage. At December 31, 2002, the facility fee was 1.00% on Tranche A and 1.25% on each of Tranches B
and C. At December 31, 2001, the facility fee was 0.30% on Tranche A and 0.35% on each of Tranches B and C. Edison Mission Midwest Holdings also pays an agent bank fee of
$50,000 per year. Edison Mission Midwest Holdings used the proceeds from the credit agreement to make a loan to Edison Mission Overseas, which in turn loaned the funds to Midwest Generation.

Each
of the subsidiaries of Edison Mission Midwest Holdings (including Midwest Generation) has executed full and unconditional guarantees in support of the borrowings under the credit
agreement on a joint and several basis. Edison Mission Midwest Holdings has no material assets apart from investments in its subsidiaries.

The
collateral for any borrowings under the credit agreement are secured by all of the assets of Midwest Generation, including a mortgage on real property and a security interest in all
bank accounts, insurance policies and other intangible assets whether now owned or thereafter acquired.

Edison
Mission Midwest Holdings has financial and non-financial debt covenants associated with its debt. Edison Mission Midwest Holdings must maintain a specified debt
service coverage ratio as follows: net cash flows over the aggregate of principal, interest, and fixed charges for a specified period exceeding 1.75 to 1.0. In addition, Edison Mission Midwest
Holdings must maintain a debt-to-capital ratio no greater than 0.60 to 1. During the 12 months ended December 31, 2002, the debt service coverage ratio was 4.04
to 1 and the debt-to-capital ratio was 0.51 to 1.

75

---

The
fair market value of the long-term debt approximates the carrying value due primarily to the frequent repricing of interest rates.

Note 6. Price Risk Management Activities

Midwest Generation's risk management policy allows for the use of derivative financial instruments through its marketing affiliate to limit financial exposure to
fuel prices for non-trading purposes. Use of these instruments exposes Midwest Generation to commodity price risk, which includes potential losses that can arise from a change in the
market value of a particular commodity. Commodity price risk exposures are actively monitored to ensure compliance with Midwest Generation's risk management policies. Policies are in place that limit
the amount of total net exposure Midwest Generation may enter into at any point in time. Procedures exist that allow for monitoring of all commitments and positions with regular reviews by a risk
management committee. Midwest Generation's marketing affiliate performs a series of "value at risk" analyses in its daily business to measure, monitor and control Midwest Generation's overall market
risk exposure. The use of value at risk analysis allows management to aggregate overall commodity risk, compare risk on a consistent basis and identify the drivers of the risk. Value at risk measures
the possible loss over a given time interval, under normal market conditions, at a given confidence level. Given the inherent limitations of value at risk and reliance upon a single risk measurement
tool, Midwest Generation's marketing affiliate supplements this approach with the use of stress testing and worst-case scenario analysis, as well as stop loss limits and counterparty
credit exposure limits. Despite this, there can be no assurance that all risks have been accurately identified, measured and/or mitigated.

The
following table summarizes the fair values for outstanding financial instruments used for price risk management activities by instrument type:

December 31,2002

2001Commodity price:Electricity contracts

$
(647
)
$
17Natural gas contracts





(8,401
)Other





(143
)Total fair value

$
(647
)
$
(8,527
)


76

---

Note 7. Income Taxes

Income tax expense includes the current tax benefit from operating loss and the change in deferred income taxes during the year. The components of the net
accumulated deferred income tax liability were:

Years Ended December 31,2002

2001Deferred tax assetsLease financing

$
(2,914
)
$
882Net operating losses


10,229


9,651Subtotal


7,315


10,533Valuation allowance


(5,377
)

(4,799
)Total

$
1,938

$
5,734Deferred tax liabilitiesAccumulated depreciation difference

$
57,712

$
52,429Termination of benefit obligation


26,035


Price risk management


4,854


1,623State tax benefit


(3,386
)

420Other


(9,923
)

8,137Total


75,292


62,609Deferred taxes liability, net

$
73,354

$
56,875


Midwest
Generation has $140 million of loss carryforwards at December 31, 2002 from Illinois state tax losses which expire beginning in 2020. The benefit for income taxes
is comprised of the following:

Years Ended December 31,2002

2001

2000CurrentFederal

$
(23,231
)
$
(87,631
)
$
(60,029
)State


(3,408
)

(12,846
)

(7,637
)Total current

$
(26,639
)
$
(100,477
)
$
(67,666
)DeferredFederal

$
14,708

$
35,043

$
8,489State


2,411


8,995


(2,520
)Total deferred


17,119


44,038


5,969Benefit for income taxes

$
(9,520
)
$
(56,439
)
$
(61,697
)


77

---

The
components of the deferred tax provision, which arise from timing differences between financial and tax reporting, are presented below:

Years Ended December 31,2002

2001

2000Accumulated depreciation difference

$
5,283

$
11,872

$
34,032Termination of benefit obligation


26,035





State tax benefit


(3,806
)

(2,708
)

2,785Price risk management


3,871


18,416


(16,793
)Lease financing


3,796


8,321


(9,203
)Net operating losses








(4,852
)Other


(18,060
)

8,137


Total deferred provision

$
17,119

$
44,038

$
5,969


Variations
from the 35% federal statutory rate are as follows:

Years Ended December 31,2002

2001

2000Expected benefit for federal income taxes

$
(8,872
)
$
(53,936
)
$
(55,325
)Decrease in taxes resulting from:State taxnet of federal benefit


(648
)

(2,503
)

(6,372
)Benefit for income taxes

$
(9,520
)
$
(56,439
)
$
(61,697
)Effective tax rate


37.6
%

36.6
%

39.0
%


78

---



Note 8. Employee Benefit Plans

Employees of Midwest Generation are eligible for various benefit plans of Edison International.

Pension Plans

Midwest Generation maintains a pension plan specifically for the benefit of its union employees. Midwest Generation's non-union employees participate
in the Edison International pension plan. Both plans are noncontributory, defined benefit pension plans and cover employees who fulfill minimum service requirements. There are no prior service costs
for the plans. Information on plan assets and benefit obligations is shown below:

|                                |                                                | Years Ended December 31,                 |        
|------------------------------- | ---------------------------------------------- | ---------------------------------------- | -------
|
|
|Change in Benefit Obligation    |                                                |                                          |        
|                                | Benefit obligation at beginning of year        |                                          | $      
|                                | Service cost                                   |                                          |        
|                                | Interest cost                                  |                                          |        
|                                | Actuarial loss                                 |                                          |        
|                                | Amendments                                     |                                          |        
|                                | Benefits paid                                  |                                          |        
|                                |                                                |                                          |        
|                                |                                                | Benefit obligation at end of year        |        
|                                |                                                |                                          |        
|Change in Plan Assets           |                                                |                                          |        
|                                | Fair value of plan assets at beginning of year |                                          | $      
|                                | Actual return on plan assets                   |                                          |        
|                                | Employer contributions                         |                                          |        
|                                | Benefits paid                                  |                                          |        
|                                |                                                |                                          |        
|                                |                                                | Fair value of plan assets at end of year |        
|                                |                                                |                                          |        
|Funded Status                   |                                                | $                                        | (15,669
|Unrecognized net loss (gain)    |                                                |                                          | 8,641  
|Unrecognized prior service cost |                                                |                                          | 2,997  
|                                |                                                |                                          |        
|Pension asset (liability)       |                                                | $                                        | (4,031 
|                                |                                                |                                          |        
|Discount rate                   |                                                |                                          | 6.50   
|Rate of compensation increase   |                                                |                                          | 5.00   
|Expected return on plan assets  |                                                |                                          | 8.50   

79

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Components
of pension expense were:

|                               |  | Years Ended December 31,
|------------------------------ |  | ------------------------
|
|
|Service cost                   |  | $                       
|Interest cost obligation       |  |                         
|Expected return on plan assets |  |                         
|Recognized net actuarial loss  |  |                         
|                               |  |                         
|Net pension expense            |  | $                       
|                               |  |                         

The
projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the Midwest Generation pension plan for its union employees for which the accumulated
benefit obligation exceeded the plan assets were $30 million, $19 million and $14 million, respectively, as of December 31, 2002. As of December 31, 2001, the fair
value of plan assets exceeded the accumulated benefit obligations for all pension and postretirement benefit plans.

Postretirement Benefits Other Than Pensions

A portion of Midwest Generation's non-union employees retiring at or after age 55 with at least ten years of service are eligible for postretirement
health care, dental, life insurance and other benefits paid in part by Midwest Generation. Eligibility depends on a number of factors, including the employee's hire date. Employees in
union-represented positions were covered by a retirement health care and other benefits plan that expired on June 15, 2002. In October 2002, Midwest Generation reached an agreement with
its union-represented employees on new benefits plans, which extend from January 1, 2003 through June 30, 2005. Midwest Generation continued to provide benefits at the same level as
those in the expired agreement until December 31, 2002. The accounting for postretirement benefit liabilities has been determined on the basis of a substantive plan under Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." A substantive plan means that Midwest Generation assumed, for accounting purposes, that it
would provide for postretirement healthcare benefits to union-represented employees following conclusion of negotiations to replace the current benefits agreement, even though Midwest Generation had
no legal obligation to do so. Under the new agreement, postretirement healthcare benefits will not be provided. Accordingly, Midwest Generation treated this as a plan termination under SFAS
No. 106 and recorded a pre-tax gain of $70.7 million during the fourth quarter of 2002.

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---

Information
on plan assets and benefit obligations is shown below:

|                             |                                                | Years Ended December 31,                 |  
|---------------------------- | ---------------------------------------------- | ---------------------------------------- | -
|
|
|Change in Benefit Obligation |                                                |                                          |  
|                             | Benefit obligation at beginning of year        |                                          | $
|                             | Service cost                                   |                                          |  
|                             | Interest cost                                  |                                          |  
|                             | Actuarial loss (gain)                          |                                          |  
|                             | Settlement                                     |                                          |  
|                             | Benefits paid                                  |                                          |  
|                             |                                                |                                          |  
|                             |                                                | Benefit obligation at end of year        |  
|                             |                                                |                                          |  
|Change in Plan Assets        |                                                |                                          |  
|                             | Fair value of plan assets at beginning of year |                                          | $
|                             | Employer contributions                         |                                          |  
|                             | Benefits paid                                  |                                          |  
|                             |                                                |                                          |  
|                             |                                                | Fair value of plan assets at end of year |  
|                             |                                                |                                          |  
|Funded status                |                                                | $                                        | 
|Unrecognized net loss        |                                                |                                          | 
|                             |                                                |                                          |  
|Recorded liability           |                                                | $                                        | 
|                             |                                                |                                          |  
|Discount rate                |                                                |                                          | 

The
components of postretirement benefits other than pension expense were:

|                                     |  | Years Ended December 31,
|------------------------------------ |  | ------------------------
|
|
|Service cost                         |  | $                       
|Interest cost                        |  |                         
|Settlement                           |  |                         
|Recognized net actuarial (gain) loss |  |                         
|                                     |  |                         
|Total expense (gain)                 |  | $                       
|                                     |  |                         

For
the non-union plan, the assumed rate of future increases in the per-capita cost of health care benefits is 9.75% for 2003, gradually decreasing to 5% for 2008
and beyond. Increasing the health care cost trend rate by one percentage point would increase the accumulated obligation as of December 31, 2002 by $4.9 million. The effect on the annual
aggregate service and interest costs would be $0.5 million. Decreasing the health care cost trend rate by one percentage point would decrease the

81

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accumulated obligation as of December 31, 2002 by $3.8 million. The effect on the annual aggregate service and interest costs would be $0.4 million.

Employee Stock Plans

A 401(k) plan is maintained to supplement eligible employees' retirement income. Midwest Generation matches 100% of non-union employee contributions,
up to 6% of such employees' annual compensation. Midwest Generation also matches 75% of contributions made by union employees, up to 6% of annual compensation. Employer contributions vest 20% per
year. Contribution expense for the years ended December 31, 2002, 2001 and 2000 was $3.1 million, $2.6 million and $2.2 million, respectively.

Note 9. Commitments and Contingencies

Power Purchase Agreements

Electric power generated at Midwest Generation's power generation plants is sold under three power purchase agreements with Exelon Generation, in which Exelon
Generation purchases capacity and has the right to purchase energy generated by the power generation plants. Midwest Generation initially entered into agreements with Commonwealth Edison on
December 15, 1999, and they were subsequently assigned to Exelon Generation in January 2001. The power purchase agreements have a term of up to five years and provide for capacity and
energy payments. Exelon Generation is obligated to make capacity payments for the power generation plants under contract and energy payments for the electricity produced by these plants and taken by
Exelon Generation. The capacity payments provide the power generation plants revenue for fixed charges, and the energy payments compensate the power generation plants for variable costs of production.

In
July 2002, under the power purchase agreement related to Midwest Generation's coal-fired generation units, Exelon Generation notified Midwest Generation of its
exercise of its option to purchase 1,265 MW of capacity and energy during 2003 (of a possible total of 3,949 MW subject to option) from the option coal units. As a result, 2,684 MW of capacity of the
Will County 1 and 2, Joliet 6 and 7, and Powerton 5 and 6 units ceased to be subject to the power purchase agreement from and after January 1, 2003. Exelon Generation continues to have a
similar option, exercisable not later than 180 days prior to January 1, 2004, to retain or release for 2004 all or a portion of the option coal units retained for 2003. Exelon Generation
remains committed to purchase the capacity of certain committed units having 1,696 MW of capacity for both 2003 and 2004.

In
October 2002, under the power purchase agreements related to Midwest Generation's Collins Station and peaking units, Exelon Generation notified Midwest Generation of its
exercise of its option to terminate the existing power purchase agreements during 2003 with respect to (a) 1,614 MW of capacity and energy (of a possible total of 2,698 MW subject to the option
to terminate) from the Collins Station, a natural gas and oil-fired electric generating station, and (b) 113 MW of capacity and energy
(of a possible total of 807 MW subject to the option to terminate) from the natural gas and oil-fired peaking units, in accordance with the terms of each applicable power purchase
agreement. As a result, 1,614 MW of capacity from the Collins Units 2, 4 and 5, and 113 MW of capacity from the Lombard 33 and Calumet 33 and 34 peaking units, ceased to be subject to a power purchase
agreement

82

---

from and after January 1, 2003. Previously, Exelon Generation exercised its option to terminate 137 MW of capacity from the Bloom and Waukegan peaking units effective January 1, 2002.
Exelon Generation continues to have a similar option to terminate, exercisable not later than 90 days prior to January 1, 2004, the power purchase agreements for 2004 with respect to all
or a portion of the Collins Station and peaking units not previously terminated for 2003 (1,084 MW from the Collins Station and 694 MW from the peaking units).

If
Exelon Generation does not fully dispatch the power generation plants under contract, the power generation plants may sell, subject to specified conditions, the excess energy at
market prices to neighboring utilities, municipal utilities, third-party electric retailers and power marketers on a spot basis. A bilateral trading infrastructure already exists with access to the
Mid-America Interconnected Network and the East Central Area Reliability Council.

Chicago In-City Obligation

Pursuant to the acquisition documents for the purchase of generating assets from Commonwealth Edison, Midwest Generation committed to install one or more
gas-fired electric generating units having an additional gross dependable capacity of 500 MW at or adjacent to an existing power plant site in Chicago, this commitment being referred to as
the In-City Obligation, for an estimated cost of $320 million. The acquisition documents required that commercial operation of this project commence by December 15, 2003. Due
to additional capacity for new gas-fired generation in the Mid-America Interconnected Network, generally referred to as the MAIN Region, and the improved reliability of power
generation in the Chicago area, Midwest Generation did not believe the additional gas-fired generation was needed. In February 2003, Midwest Generation finalized an agreement with
Commonwealth Edison to terminate this commitment in exchange for the following:



As
a result of this agreement with Commonwealth Edison, Midwest Generation recorded a loss of $45 million during the fourth quarter of 2002. The loss was determined by the sum of:
(a) the present value of the cash payments to both Commonwealth Edison and Calumet Energy Team LLC (capacity payments), less (b) the fair market value of the option to purchase power
under the replacement contract with Calumet Energy Team LLC described above. As a result of this agreement with Commonwealth Edison, Midwest Generation is no longer obligated to build the additional
gas-fired generation.

83

---

Fuel Supply Contracts

At December 31, 2002, Midwest Generation had contractual commitments to purchase and/or transport coal and fuel oil. The contracts range from one year to
ten years in length. Based on the contract provisions, which consist of fixed prices subject to adjustment, the minimum commitments are currently estimated to aggregate $724 million over the
duration of the existing contracts summarized as follows: 2003$277 million; 2004$135 million; 2005$131 million;
2006$133 million; 2007$8 million; and thereafter$40 million.

Guarantees and Indemnities



Midwest Generation has guaranteed Edison Mission Midwest Holdings' third-party debt in the amount of $1.7 billion at December 31, 2002. Midwest
Generation's parent also pledged the membership interests in Midwest Generation to the lenders in connection with the third-party debt arrangements. See "Note 5.
Long-Term Debt."



In connection with the sale-leaseback transactions related to the Collins Station and the Powerton and Joliet Stations, EME, Midwest Generation and
another wholly owned subsidiary of EME entered into tax indemnity agreements. Under these tax indemnity agreements, these entities agreed to indemnify the lessors in the sale-leaseback
transactions for specified adverse tax consequences that could result in certain situations set forth in each tax indemnity agreement, including specified defaults under the respective leases. The
potential indemnity obligation under these tax indemnity agreements could be significant. Due to the nature of these obligations under these tax indemnity agreements, Midwest Generation cannot
determine a maximum potential liability. The indemnities would be triggered by a valid claim from the lessors. Midwest Generation has not recorded a liability related to these indemnities.



Midwest Generation entered into a supplemental agreement to resolve a dispute regarding interpretation of its reimbursement obligation for asbestos claims under
the environmental indemnities set forth in the Asset Sale Agreement dated March 22, 1999. Under this supplemental agreement, Midwest Generation agreed to reimburse Commonwealth Edison 50% of
specific existing asbestos claims less recovery of insurance costs, and agreed to a sharing arrangement for liabilities associated with future asbestos related claims as specified in the agreement.
The obligations under this agreement are not subject to a maximum liability. The supplemental agreement has a five-year term with an automatic renewal provision (subject to the right to
terminate). Payments are made under this indemnity by a valid claim provided from Commonwealth Edison. At December 31, 2002, Midwest Generation recorded a $5 million liability related to
known claims provided by Commonwealth Edison.

84

---

Environmental Matters

Midwest Generation is subject to environmental regulation by federal, state and local authorities in the United States. Midwest Generation believes that it is in
substantial compliance with environmental regulatory requirements and that maintaining compliance with current requirements will not materially affect its financial position or results of operations.
However, possible future developments, such as the promulgation of more stringent environmental laws and regulations, and future proceedings which may be taken by environmental authorities, could
affect the costs and the manner in which Midwest Generation conducts its business and could cause Midwest Generation to make substantial additional capital expenditures. There is no assurance that
Midwest Generation would be able to recover these increased costs from its customers or that its financial position and results of operations would not be materially adversely affected.

Typically,
environmental laws require a lengthy and complex process for obtaining licenses, permits and approvals prior to construction and operation of a project. Meeting all the
necessary requirements can delay or sometimes prevent the completion of a proposed project as well as require extensive modifications to existing projects, which may involve significant capital
expenditures. If Midwest Generation fails to comply with applicable environmental laws, it may be subject to penalties and fines imposed against Midwest Generation by regulatory authorities.

Midwest
Generation expects that compliance with the Clean Air Act and the regulations and revised State Implementation Plans developed as a consequence of the Act will result in
increased capital expenditures and operating expenses. For example, Midwest Generation anticipates upgrades to the environmental controls to reduce nitrogen oxides emissions at the power generation
plants to result in expenditures of approximately $14 million in 2003, and none forecasted at this time for the years 2004-2007.

On
February 21, 2003, Midwest Generation received a request for information regarding past operations, maintenance and physical changes at its coal plants from the Environmental
Protection Agency. Other than the request for information, no proceedings have been initiated by the Environmental Protection Agency relating to its coal plants. Depending on the outcome of the review
and regulatory developments, Midwest Generation could be required to invest in additional pollution control requirements, over and above the upgrades it is planning to install, and could be subject to
fines and penalties. Midwest Generation cannot estimate the outcome of these discussions or the potential costs of investing in additional pollution control requirements, fines or penalties at this
time.

Midwest
Generation has accrued approximately $2 million for estimated environmental investigation and remediation costs for its plants. This estimate is based upon the number of
sites, the scope of work and the estimated range of costs for environmental activity where such expenditures could be reasonably estimated. The midpoint of the range was used for the accrual. Future
estimated costs may vary based on changes in regulations or requirements of Federal, state, or local governmental agencies, changes in technology, and actual costs of disposal. Management believes
that future costs in excess of the amounts disclosed on all known and quantifiable environmental contingencies will not be material to Midwest Generation's financial position.

85

---



Note 9. Commitments and Contingencies (Continued)

Interconnection Agreement

Midwest Generation has entered into interconnection agreements with Commonwealth Edison to provide interconnection services necessary to connect the Illinois
Plants with its transmission systems. Unless terminated earlier in accordance with the terms thereof, the interconnection agreements will terminate on a date mutually agreed to by both parties. This
date may not exceed the retirement date of the Illinois Plants. Midwest Generation is required to compensate Commonwealth Edison for all reasonable costs associated with any modifications, additions
or replacements made to the interconnection facilities or transmission systems in connection with any modification, addition or upgrade to the Illinois Plants.

Collective Bargaining Agreement

Midwest Generation employed 1,075 employees in Illinois, 828 of whom are covered by a collective bargaining agreement, at December 31, 2002. The collective
bargaining agreement is due to expire on December 31, 2005. Midwest Generation had a retirement health care and other benefits plan related to its union-represented employees that expired on
June 15, 2002. In October 2002, Midwest Generation reached an agreement with its union-represented employees on a new retirement health care and other benefits plan which extends from
January 1, 2003 through June 30, 2005. Midwest Generation continued to provide benefits at the same level as those in the expired agreement until December 31, 2002.

Note 10. Lease Commitments

Midwest Generation has lease financings with respect to its Collins Station and Powerton-Joliet stations. Each lease financing transaction is described in more
detail below. Midwest Generation also has operating leases in place with respect to equipment, primarily leased barges and railcars that have terms which range from as short as 1.5 years to
17 years.

At
December 31, 2002, the future operating and lease financing commitments were as follows:

Years Ending December 31,

Operating Leases

Lease Financing2003

$
14,398

$
137,7522004


13,759


149,4212005


11,390


191,3882006


10,895


275,2102007


10,461


313,942Thereafter


76,085


2,511,359Total future commitments

$
136,988

$
3,579,072Amount representing interest





(1,399,425
)Net Commitments




$
2,179,647


Operating
lease expense amounted to $18.2 million, $32.5 million and $28.7 million in 2002, 2001 and 2000, respectively.

86

---

Collins Station Lease

In connection with the acquisition of the Illinois Plants, Midwest Generation assigned the right to purchase the Collins gas and oil-fired power plant
to four third-party entities. The third parties purchased the Collins Station for $860 million and entered into leases of the plant with an affiliate of Midwest Generation. The affiliate
entered into subleases of the plant with Midwest Generation. The subleases, which are being accounted for as a lease financing, each have an initial term of 33.75 years, with payments due on a
quarterly basis. The base sublease rent includes both a fixed and variable component; the variable component is impacted by movements in defined short-term interest rate indexes and the
determination of such index as provided for under the related agreements. Under the terms of the subleases, Midwest Generation may request a lessor, at its option, to refinance the lessor's debt,
which if completed would impact the base sublease rent. If a lessor intends to sell its interest in the Collins Station, Midwest Generation has a first right of refusal to acquire the interest at fair
market value. Minimum lease payments (included in the table above) are $40.4 million in 2003, $52.1 million in 2004, $50.3 million in 2005, $90.3 million in 2006 and
$129 million in 2007. At December 31, 2002, the total remaining lease payments were $1.4 billion.

The
owner/lessor under the Collins lease issued notes in the amount of the lessor debt to Midwest Funding LLC, a funding vehicle created and controlled by the owner/lessor. These notes
mature in January 2014 and are referred as the lessor notes. Midwest Funding LLC, in turn, entered into a commercial paper/loan facility with a group of banks pursuant to which it borrowed the
funds required for its purchase of the lessor notes. These borrowings are currently scheduled to mature in December 2004 and are referred to as the lessor borrowings.

The
rent under the Collins lease includes both a fixed component and a variable component, which is affected by movements in defined interest rate indices. If the lessor borrowings are
not repaid at maturity, by a refinancing or otherwise, the interest rate on them would increase at specified increments every three months, which would be reflected in adjustments to the Collins lease
rent payments. Under the Collins lease, Midwest Generation may request the owner/lessor to cause Midwest Funding LLC to refinance the lessor borrowings in accordance with guidelines set forth in the
lease, but such refinancing is subject to the owner/lessor's approval. If the lessor borrowings are not refinanced by December 2004 because the owner/lessor's approval is not obtained or a
refinancing is not commercially available, rent under the Collins lease would increase by approximately $9 million for the first quarter of 2005 and increase approximately $2 million for
each quarter thereafter.

Powerton and Joliet Facilities Sale-Leaseback

On August 24, 2000, Midwest Generation entered into a sale-leaseback transaction with respect to the Powerton and Joliet power facilities
located in Illinois to third-party lessors for an aggregate purchase price of $1.367 billion. Under the terms of the leases (33.75 years for Powerton and 30 years for Joliet),
Midwest Generation makes semi-annual lease payments on each January 2 and July 2, beginning January 2, 2001. If a lessor intends to sell its interest in the Powerton
or Joliet power facility, Midwest Generation has a first right of refusal to acquire the interest at fair market value. Under the terms of each lease, Midwest Generation may request a lessor, at its
option, to refinance the lessor debt, which if completed would affect the base lease rent. The lessor debt of $1.147 billion was obtained from the issuance by Midwest Generation of
Pass-Through Certificates with terms ranging

87

---

from nine to sixteen years with fixed interest rates ranging from 8.30% to 8.56%. The gain on the sale of the power facilities has been deferred and is being amortized over the term of the leases.
Minimum lease payments (included in the table above) are $97.3 million in 2003, $97.3 million in 2004, $141.1 million in 2005, $184.9 million in 2006 and
$184.9 million in 2007. At December 31, 2002, the total remaining lease payments were $2.2 billion.

Note 11. Related Party Transactions

Edison Mission Marketing & Trading Agreements

Midwest Generation entered into a Master Purchase, Sale and Services Agreement with its marketing affiliate effective March 23, 2001, pursuant to which
Midwest Generation's marketing affiliate arranges for purchases and sales of the following products, including services related thereto: (i) electric energy and capacity; (ii) natural
gas; (iii) fuel oil; and (iv) emissions allowances.

Midwest
Generation compensates its marketing affiliate in accordance with the following table with respect to these transactions, and reimburses its marketing affiliate for brokers fees,
taxes, and other reasonably incurred direct out-of-pocket expenses. Payment for these services is due within 30 days of billing.

Service

CompensationElectric energy and/or capacity

$.02/MWh ($.02/MW-day for capacity)Natural gas

$.02/MMBtuFuel oil

$.05/bblEmissions allowances

$.25/SO2 allowance;
and $25/NOx allowance


The
net fees earned by the marketing affiliate were $1.2 million, $0.9 million and $1.5 million for the years ended December 31, 2002, 2001 and 2000,
respectively. The amount due from the marketing affiliate was $6.5 million and $5.7 million at December 31, 2002 and 2001, respectively.

Midwest
Generation also entered into several transactions through its marketing affiliate to sell or purchase surplus SO2 or NOx allowances to other EME affiliates. All transactions were
completed at market price on the date of the transaction. Net consideration received was $5.0 million and $10.2 million during 2002 and 2001, respectively.

Notes Receivable from Edison Mission Energy

Proceeds arising from the Powerton-Joliet sale-leaseback transaction (see Note 10) were used by Midwest Generation to make a loan to EME. The
loan is evidenced by four intercompany notes amounting to $1.367 billion. EME is obligated to repay the principal on the notes in a series of installments on the dates and in the amounts set
forth on a schedule to each note. EME has paid and is required to pay interest on the notes on each January 2 and July 2 at an 8.30% fixed interest rate. All amounts due under the notes
are due to be repaid in full on January 2, 2016. Midwest Generation earned interest income of $118.9 million during 2002. In addition to the four intercompany notes above relating to the
Powerton-Joliet sale-leaseback, Midwest Generation loaned EME $300 million from the

88

---

sale-leaseback of the peaker power units. EME paid off the $300 million note in August 2002 in connection with Midwest Generation's repurchase of the peaker power units.

Services Agreements with Edison Mission Energy and Edison International

Certain administrative services, such as payroll, employee benefit programs, insurance and information technology are shared among all affiliates of Edison
International, and the costs of these corporate support services are allocated to all affiliates. The cost of services provided by Edison International and EME, including those related to Midwest
Generation, are allocated based on one of the following formulas: percentage of the time worked, equity in investment and advances, number of employees, or multi-factor (operating revenues, operating
expenses, total assets and total employees). Midwest Generation participates in a common payroll and benefit program with all Edison International employees. In addition, Midwest Generation is billed
for any direct labor and out-of-pocket expenses for services directly requested for the benefit of Midwest Generation. Midwest Generation believes the allocation methodologies
are reasonable. Costs incurred for these programs, payroll funding, and other services during the years ended December 31, 2002, 2001 and 2000 were $124.7 million, $127.4 million
and $149.4 million, respectively.

Midwest
Generation participates in the insurance program of Edison International, including property, general liability, workers compensation and various other specialty policies.
Midwest Generation's insurance premiums are generally based on its share of risk related to each policy. In connection with the property insurance program, a portion of the risk is reinsured by a
captive insurance subsidiary of Edison International.

Midwest
Generation recorded a receivable from EME of $169.9 million at December 31, 2001 related to the tax due under the tax-allocation agreement. For the year
ended December 31, 2002, all outstanding receivables were realized through a reduction in amounts owed under Midwest Generation's affiliate subordinated loan agreement with Edison Mission
Overseas. See "Note 2. Summary of Significant Accounting Policies" for further discussion of the tax-allocation agreement.

Contribution of Services by Parent

Midwest Generation EME, LLC is Midwest Generation's indirect parent in Illinois and provides executive management, legal, human resources, accounting and other
administrative services in Chicago on Midwest Generation's behalf without charge. In connection with regulations of the Securities and Exchange Commission, the costs of these services must be recorded
as part of Midwest Generation's financial results, although Midwest Generation does not have a cash obligation to pay for these activities. The costs of these services, after tax, were
$10.6 million, $11.3 million and $7.8 million for the periods ended December 31, 2002, 2001 and 2000, respectively. Midwest Generation has reflected these activities as a
non-cash contribution of services by its parent in the accompanying financial statements.

Support Services Agreement with Parent

Midwest Generation entered into an agreement with its indirect parent, Midwest Generation EME, LLC to provide support services, including construction and
construction management,

89

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operations and maintenance management, technical services and training, environmental, health and safety services, administrative and IT support, and other managerial and technical services needed to
operate and maintain electric power facilities. Under the terms of the agreement, Midwest Generation reimburses Midwest Generation EME for actual costs incurred by functional area in providing support
services, or in the case of specific tasks Midwest Generation requests, the amount negotiated for the task. Actual costs billable under this agreement for the years ended December 31, 2002,
2001 and 2000 were $6.8 million, $7.0 million and $8.3 million, respectively.

Fuel Services Agreements

Midwest Generation entered into agreements with Edison Mission Energy Services, Inc. to provide fuel and transportation services related to coal and fuel
oil. Under the terms of these agreements, Midwest Generation pays a service fee of $.06 for each ton of coal delivered and $.05 for each barrel of fuel oil delivered, plus the actual cost of the
commodities. The amount billable under this agreement for the years ended December 31, 2002, 2001 and 2000 was $1.1 million, $1.3 million and $1.0 million, respectively.

Note 12. Supplemental Statements of Cash Flows Information

Years Ended December 31,2002

2001

2000Cash paid:Interest

$
342,535

$
344,931

$
293,841Income taxes (receipts)

$


$


$
Details of facility acquisition:Fair value of assets acquired

$


$


$
16,895Liabilities assumed








Net cash paid for acquisitions

$


$


$
16,895Non-cash investing and financing activities:Reduction in affiliate debt due to tax-allocation agreement offset

$
189,853

$


$
Assets acquired under lease financing

$


$


$
1,367,000


90

---

Note 13. Quarterly Financial Data (unaudited)

|2002                                 |  | First |         | Second |   | Third(i) |   | Fourth |         | Total |  
|------------------------------------ |  | ----- | ------- | ------ | - | -------- | - | ------ | ------- | ----- | -
|Operating revenues                   |  | $     | 163,806 |        | $ | 277,840  |   | $      | 529,490 |       | $
|Operating income (loss)              |  |       | (53,876 | )      |   | 37,810   |   |        | 236,359 |       |  
|Provision (benefit) for income taxes |  |       | (41,064 | )      |   | (2,261   | ) |        | 67,643  |       |  
|Net income (loss)                    |  |       | (66,231 | )      |   | (14,113  | ) |        | 111,751 |       |  

|2001                                 |  | First |         | Second |   | Third(i) |   | Fourth |         | Total |  
|------------------------------------ |  | ----- | ------- | ------ | - | -------- | - | ------ | ------- | ----- | -
|Operating revenues                   |  | $     | 175,307 |        | $ | 250,972  |   | $      | 475,461 |       | $
|Operating income (loss)              |  |       | (56,310 | )      |   | (8,631   | ) |        | 220,951 |       |  
|Provision (benefit) for income taxes |  |       | (48,104 | )      |   | (29,163  | ) |        | 60,478  |       |  
|Net income (loss)                    |  |       | (77,120 | )      |   | (46,796  | ) |        | 96,714  |       |  

---

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PART III

ITEM 10. MANAGERS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Midwest Generation's members elect the Board of Managers. The Board of Managers may appoint officers as Midwest Generation's business may require. Listed below
are Midwest Generation's current managers and executive officers and their positions as of March 27, 2003.

|Name                  |  | Age |  | Position                              |  | Position Held
Continuously
Since
|--------------------- |  | --- |  | ------------------------------------- |  | --------------------------------
|Georgia R. Nelson     |  | 53  |  | Manager and President                 |  | July 1999                       
|John K. Deshong       |  | 49  |  | Manager and Vice President            |  | August 2000                     
|Ronald L. Litzinger   |  | 43  |  | Manager and Vice President            |  | August 2000                     
|Kevin M. Smith        |  | 45  |  | Manager, Vice President and Treasurer |  | July 1999                       
|Raymond W. Vickers    |  | 60  |  | Manager                               |  | July 1999                       
|John P. Finneran, Jr. |  | 43  |  | Vice President                        |  | September 1999                  
|Rebecca J. Lauer.     |  | 46  |  | Vice President and General Counsel    |  | November 2002                   
|Fred W. McCluskey     |  | 43  |  | Vice President                        |  | July 1999                       

Business Experience

Described below are the principal occupations and business activities of Midwest Generation's managers and executive officers for the past five years in addition
to their positions indicated above.

Ms. Nelsonhas been General Manager, Americas Region of Edison Mission Energy since January 2002. Ms. Nelson has been
Senior Vice President of Edison Mission Energy since January 1996 and has been President of Midwest Generation EME, LLC since May 1999. From January 1996 until June 1999,
Ms. Nelson was Senior Vice President, Worldwide Operations. Ms. Nelson was Division President of Edison Mission Energy's Americas region from January 1996 to January 1998.

Mr. Deshonghas been Vice President, Tax of Edison Mission Energy since June 2000. Mr. Deshong served as Regional
Vice President of Tax, Americas Region of Edison Mission Energy from November 1998 to June 2000. From April 1997 to November 1998, Mr. Deshong served as Director,
Tax Planning and Special Projects of Edison Mission Energy. Prior to joining Edison Mission Energy, Mr. Deshong was a Director of Tax at United States Enrichment Corporation from
December 1995 to April 1997.

Mr. Litzingerhas been Senior Vice President and Chief Technical Officer of Edison Mission Energy since January 2002. From
June 1999 to January 2002, Mr. Litzinger was Senior Vice President of Edison Mission Energy's Worldwide Operations. Mr. Litzinger served as Vice President of O&M Business
Development from December 1998 to May 1999. Mr. Litzinger has been with Edison Mission Energy since November 1995 serving as both Regional Vice President of O&M Business
Development and Manager of O&M Business Development until December 1998.

Mr. Smithhas been Senior Vice President and Chief Financial Officer of Edison Mission Energy since May 1999.
Mr. Smith served as Treasurer of Edison Mission Energy from September 1992 to February 2000 and was elected a Vice President in 1994. From March 1998 to
September 1999, Mr. Smith also held the position of Regional Vice President, Americas Region of Edison Mission Energy.

Mr. Vickershas been Senior Vice President and General Counsel of Edison Mission Energy since March 1999. Prior to joining
Edison Mission Energy, Mr. Vickers was a partner with the law firm Skadden, Arps, Slate, Meagher & Flom LLP concentrating on international business transactions,

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particularly cross-border capital markets and investment transactions, project implementation and finance.

Mr. Finneranhas been Vice President and Regional Vice President Finance, Americas Region of Edison Mission Energy since
September 1999. From September 1998 to September 1999, Mr. Finneran was Senior Vice President of Finance and Treasurer of Richfood Holdings. From January 1996 to
September 1998, Mr. Finneran served as Chief Financial Officer and Treasurer of Dominion Energy.

Ms. Lauerhas been Vice PresidentLegal of Edison Mission Energy's Americas Region and Vice President and General
Counsel of Midwest Generation EME, LLC since November 2002. Prior to joining Edison Mission Energy, Ms. Lauer was Vice President and General Counsel for Exelon Energy Delivery and
Commonwealth Edison from May 2000 to April 2001. Ms. Lauer had been with Commonwealth Edison serving as Deputy General Counsel, Associate General Counsel and Senior Counsel since
1995.

Mr. McCluskeyhas been Vice President, Business Management of Edison Mission Energy since August 2000. From
November 1998 to August 2000, Mr. McCluskey was Regional Vice President, Business Development. From February 1997 to November 1998, Mr. McCluskey was Director
of Business Development. Mr. McCluskey was Manager of Operations from January 1995 to February 1997.

ITEM 11. EXECUTIVE COMPENSATION

The managers and officers of Midwest Generation receive no compensation for their services as managers and officers.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Certain Beneficial Owners

Set forth below is certain information regarding each person who is known by Midwest Generation to be a beneficial owner.

|Title of Class       |  | Name and Address of
Beneficial Owner                                                                                 |  | Amount and Nature of
Beneficial Owner                                  |  | Percent
of Class |  
|-------------------- |  | -------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------- |  | ---------------- | -
|Membership interests |  | Edison Mission Midwest Holdings Co.
One Financial Place
440 South LaSalle Street, Suite 3500
Chicago, Illinois 60605 |  | 100 units held directly and with exclusive voting and investment power |  | 100              | %

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In July 1999, EME, Midwest Generation's indirect parent, made an interest-free loan to Georgia R. Nelson, Manager and President of
Midwest Generation, LLC, in the amount of $179,800 in exchange for a note executed by Ms. Nelson and payable to EME 365 days following the conclusion of her assignment in Chicago,
Illinois.

ITEM 14. CONTROLS AND PROCEDURES

Under the Sarbanes-Oxley Act of 2002 and implementing rules and regulations adopted by the Securities and Exchange Commission (SEC), Midwest Generation must
maintain disclosure controls and procedures. The term "disclosure controls and procedures" is defined in the SEC's regulations to mean, as applied to Midwest Generation, controls and other procedures
that are designed to ensure that information required to be disclosed by Midwest Generation in reports filed with the SEC is recorded, processed, summarized, and reported, within the time frames
specified in the SEC's rules and

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forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by Midwest Generation in its SEC reports is
accumulated and communicated to Midwest Generation's management, including its Chief Executive Officer and its Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure.
The SEC's regulations also require Midwest Generation to carry out evaluations, under the supervision and with the participation of Midwest Generation's management, including its Chief Executive
Officer and its Chief Financial Officer, of the effectiveness of the design and operation of Midwest Generation's disclosure controls and procedures. These evaluations must be carried out within the
90-day period prior to the filing date of certain reports, including this annual report on Form 10-K.

The
Chief Executive Officer and the Chief Financial Officer of Midwest Generation have evaluated the effectiveness of the design and operation of Midwest Generation's disclosure controls
and procedures as of March 20, 2003. They have concluded that those disclosure controls and procedures, as of the evaluation date, were effective in ensuring that information required to be disclosed
by Midwest Generation in its reports filed with the SEC was (1) accumulated and communicated to Midwest Generation's management, as appropriate to allow timely decisions regarding disclosure,
and (2) recorded, processed, summarized, and reported within the time frames specified in the SEC's rules and forms.

The
Chief Executive Officer and the Chief Financial Officer of Midwest Generation also have concluded that there were no significant changes in Midwest Generation's internal controls or
in other factors that could significantly affect those controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material
weaknesses.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  (1)List of Financial Statements



Date of Report

Dated Filed

Item ReportedOctober 1, 2002

October 3, 2002

5November 25, 2002

November 27, 2002

5




|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1         |  | Purchase Agreement, dated as of August 17, 2000, among Midwest Generation, LLC, Edison Mission Energy and Credit Suisse First Boston Corporation and Lehman Brothers Inc. as representatives of the Initial Purchasers,
incorporated by reference to Exhibit 1.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                    
|2.1         |  | Asset Sale Agreement, dated March 22, 1999, between Commonwealth Edison Company and Edison Mission Energy as to the Fossil Generating Assets, incorporated by reference to Exhibit 2.5 to Edison Mission Energy's Form 10-K for the year ended
December 31, 1998.                                                                                                                                                                                                                                                           
|3.1         |  | Limited Liability Company Agreement of Midwest Generation, LLC effective as of July 12, 1999, incorporated by reference to Exhibit 3.3 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities
and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                              
|3.2         |  | Certificate of Formation of Midwest Generation, LLC, dated as of July 9, 1999, incorporated by reference to Exhibit 3.4 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange
Commission on April 20, 2001.                                                                                                                                                                                                                                             
|4.1         |  | Pass-Through Trust Agreement A, dated as of August 17, 2000, between Midwest Generation, LLC and United States Trust Company of New York, as Pass-Through Trustee, made with respect to the formation of the Midwest Generation Series A
Pass-Through Trust, and the issuance of 8.30% Pass-Through Certificates, Series A, incorporated by reference to Exhibit 4.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange
Commission on April 20, 2001.
|            |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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|4.2   |  | Pass-Through Trust Agreement B, dated as of August 17, 2000, between Midwest Generation, LLC and United States Trust Company of New York, as Pass-Through Trustee, made with respect to the formation of the Midwest Generation Series B
Pass-Through Trust, and the issuance of 8.56% Pass-Through Certificates, Series B, incorporated by reference to Exhibit 4.2 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange
Commission on April 20, 2001.
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.3   |  | Form of 8.30% Pass-Through Certificate, Series A (included in Exhibit 4.1), incorporated by reference to Exhibit 4.3 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange
Commission on April 20, 2001.                                                                                                                                                                                                                                                
|4.4   |  | Form of 8.56% Pass-Through Certificate, Series B (included in Exhibit 4.2), incorporated by reference to Exhibit 4.4 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange
Commission on April 20, 2001.                                                                                                                                                                                                                                                
|4.5   |  | Indenture of Trust, Mortgage and Security Agreement (T1), dated as of August 17, 2000, between Powerton Trust I and United States Trust Company of New York, as Lease Indenture Trustee, incorporated by reference to Exhibit 4.5 to Edison Mission
Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                   
|4.5.1 |  | Schedule identifying substantially identical agreement to Indenture of Trust, Mortgage and Security Agreement constituting Exhibit 4.5 hereto, incorporated by reference to Exhibit 4.5.1 to Edison Mission Energy's and Midwest Generation LLC's
Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                           
|4.6   |  | Indenture of Trust, Mortgage and Security Agreement (T1), dated as of August 17, 2000, between Joliet Trust I and United States Trust Company of New York, as Lease Indenture Trustee, incorporated by reference to Exhibit 4.6 to Edison Mission
Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                     
|4.6.1 |  | Schedule identifying substantially identical agreement to Indenture of Trust, Mortgage and Security Agreement constituting Exhibit 4.6 hereto, incorporated by reference to Exhibit 4.6.1 to Edison Mission Energy's and Midwest Generation LLC's
Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                           
|4.7   |  | Facility Lease Agreement (T1), dated as of August 17, 2000, by and between Powerton Trust I, as Owner Lessor, and Midwest Generation, LLC, as Facility Lessee, incorporated by reference to Exhibit 4.7 to Edison Mission Energy's and Midwest
Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                             
|4.7.1 |  | Schedule identifying substantially identical agreement to Facility Lease Agreement constituting Exhibit 4.7 hereto, incorporated by reference to Exhibit 4.7.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4
to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                      
|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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|4.8    |  | Facility Lease Agreement (T1), dated as of August 17, 2000, by and between, Joliet Trust I, as Owner Lessor, and Midwest Generation, LLC, as Facility Lessee, incorporated by reference to Exhibit 4.8 to Edison Mission Energy's and Midwest
Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                                             
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.8.1  |  | Schedule identifying substantially identical agreement to Facility Lease Agreement constituting Exhibit 4.8 hereto, incorporated by reference to Exhibit 4.8.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4
to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                                                                                     
|4.9    |  | Guarantee, dated as of August 17, 2000, made by Edison Mission Energy, as Guarantor in favor of Powerton Trust I, as Owner Lessor, incorporated by reference to Exhibit 4.9 to Edison Mission Energy's and Midwest Generation LLC's Registration
Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                                                                        
|4.9.1  |  | Schedule identifying substantially identical agreement to Guarantee constituting Exhibit 4.9 hereto, incorporated by reference to Exhibit 4.9.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the
Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                                                                                                    
|4.10   |  | Guarantee, dated as of August 17, 2000, made by Edison Mission Energy, as Guarantor in favor of Joliet Trust I, as Owner Lessor, incorporated by reference to Exhibit 4.10 to Edison Mission Energy's and Midwest Generation LLC's Registration
Statement on Form S-4 to the Securities and Exchange Commissionon April 20, 2001.                                                                                                                                                                                                                                                                                          
|4.10.1 |  | Schedule identifying substantially identical agreement to Guarantee constituting Exhibit 4.10 hereto, incorporated by reference to Exhibit 4.10.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the
Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                                                                                                  
|4.11   |  | Registration Rights Agreement, dated as of August 17, 2000, among Edison Mission Energy, Midwest Generation, LLC and Credit Suisse First Boston Corporation and Lehman Brothers Inc., as representatives of the Initial Purchasers, incorporated by
reference to Exhibit 4.11 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                      
|4.12   |  | Participation Agreement (T1), dated as of August 17, 2000, by and among, Midwest Generation, LLC, Powerton Trust I, as the Owner Lessor, Wilmington Trust Company, as the Owner Trustee, Powerton Generation I, LLC, as the Owner Participant, Edison
Mission Energy, United States Trust Company of New York, as the Lease Indenture Trustee, and United States Trust Company of New York, as the Pass Through Trustees, incorporated by reference to Exhibit 4.12 to Edison Mission Energy's and Midwest
Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.
|4.12.1 |  | Schedule identifying substantially identical agreement to Participation Agreement constituting Exhibit 4.12 hereto, incorporated by reference to Exhibit 4.12.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4
to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                                                                                    
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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|4.13   |  | Participation Agreement (T1), dated as of August 17, 2000, by and among, Midwest Generation, LLC, Joliet Trust I, as the Owner Lessor, WilmingtonTrust Company, as the Owner Trustee, Joliet Generation I, LLC, as the Owner Participant, Edison
Mission Energy, United States Trust Company of New York, as the Lease Indenture Trustee and United States Trust Company of New York, as the Pass Through Trustees, incorporated by reference to Exhibit 4.13 to Edison Mission Energy's and Midwest
Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.13.1 |  | Schedule identifying substantially identical agreement to Participation Agreement constituting Exhibit 4.13 hereto, incorporated by reference to Exhibit 4.13.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4
to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                                                                              
|4.14   |  | Promissory Note ($499,450,800), dated as of August 24, 2000, by Edison Mission Energy in favor of Midwest Generation, LLC, incorporated byreference to Exhibit 4.5 to Edison Mission Energy's Form 10-K for the year ended December 31,
2000.                                                                                                                                                                                                                                                                                                                                                                        
|4.14.1 |  | Schedule identifying substantially identical agreements to Promissory Note constituting Exhibit 4.14 hereto, incorporated by reference to Exhibit 4.5.1 to Edison Mission Energy's Form 10-K for the year ended December 31, 2000.                                                                                                                                                                                                                                                                                                                                                                                   
|4.15   |  | Promissory Note, dated as of June 23, 2000, by Edison Mission Energy in favor of Midwest Generation, LLC, incorporated by reference to Exhibit 4.6 to Edison Mission Energy's Form 10-K for the year ended December 31, 2000.                                                                                                                                                                                                                                                                                                                                                                                        
|10.1   |  | Guarantee, dated as of June 23, 2000, in favor of EME/CDL Trust and Midwest Generation, LLC made by Edison Mission Energy, incorporated by reference to Exhibit 10.85 to Edison Mission Energy's Form 10-K for the year ended December 31,
2000.                                                                                                                                                                                                                                                                                                                                                                     
|10.2   |  | Power Purchase Agreement (Crawford, Fisk, Waukegan, Will County, Joliet and Powerton Generating Stations), dated as of December 15, 1999, between Commonwealth Edison Company and Midwest Generation, LLC, incorporated by reference to Exhibit 10.86
to Edison Mission Energy's Form 10-K for the year ended December 31, 2000.                                                                                                                                                                                                                                                                                     
|10.3   |  | Power Purchase Agreement (Collins Generating Station), dated as of December 15, 1999, between Commonwealth Edison Company and Midwest Generation, LLC, incorporated by reference to Exhibit 10.87 to Edison Mission Energy's Form 10-K for the year
ended December 31, 2000.                                                                                                                                                                                                                                                                                                                                         
|10.3.1 |  | Amendment No. 1 to the Power Purchase Agreement, dated July 12, 2000, between Commonwealth Edison Company and Midwest Generation, LLC, incorporated by reference to Exhibit 10.87.1 to Edison Mission Energy's Form 10-K for the year ended
December 31, 2000.                                                                                                                                                                                                                                                                                                                                                       
|10.3.2 |  | Amended and Restated Power Purchase Agreement (Collins Generating Station), dated as of September 13, 2000, between Commonwealth Edison Company and Midwest Generation, LLC, incorporated by reference to Exhibit 10.87.2 to Edison Mission Energy's
Form 10-K for the year ended December 31, 2000.                                                                                                                                                                                                                                                                                                                 
|10.4   |  | Power Purchase Agreement (Crawford, Fisk, Waukegan, Calumet, Joliet, Bloom, Electric Junction, Sabrooke and Lombard Peaking Units), dated as of December 15, 1999, between Commonwealth Edison Company and Midwest Generation, LLC, incorporated by
reference to Exhibit 10.88 to Edison Mission Energy's Form 10-K for the year ended December 31, 2000.                                                                                                                                                                                                                                                            
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

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|10.5    |  | Participation Agreement, dated as of June 23, 2000, among Midwest Generation, LLC, Edison Mission Energy, EME/CDL Trust, the Investor party to the Trust Agreement, Wilmington Trust Company, the Persons listed as Noteholders on Schedule I thereto,
 Citicorp North America, Inc. and Citicorp North America, Inc., incorporated by reference to Exhibit 10.89 to Edison Mission Energy's Form 10-K for the year ended December 31, 2000.
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.5.1  |  | Amendment One, dated as of August 17, 2000, by and among Midwest Generation, LLC, Edison Mission Energy, EME/CDL Trust, Citicorp Del-Lease, Inc., Wilmington Trust Company, Certain Noteholders Party Thereto, Citicorp North America, Inc.
and Citicorp North America, Inc., incorporated by reference to Exhibit 10.89.1 to Edison Mission Energy's Form 10-K for the year ended December 31, 2000.                                       
|10.6    |  | Reimbursement Agreement, dated as of August 17, 2000, between Edison Mission Energy and Midwest Generation, LLC, incorporated by reference to Exhibit 10.90 to Edison Mission Energy's Form 10-K for the year ended December 31,
2000.                                                                                                                                                                                                      
|10.7    |  | Instrument of Assumption, dated as of December 15, 1999, by Midwest Generation, LLC in favor of Commonwealth Edison Company and Unicom Investment Inc., incorporated by reference to Exhibit 10.91 to Edison Mission Energy's and Midwest Generation
LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                  
|10.8    |  | Subordination Agreement, dated as of December 15, 1999, among Midwest Generation, LLC, Edison Mission Overseas Co., and Citibank, N.A., incorporated by reference to Exhibit 10.92 to Edison Mission Energy's and Midwest Generation LLC's
Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                  
|10.9    |  | Subordinated Loan Agreement, dated as of December 15, 1999, among Midwest Generation, LLC and Edison Mission Overseas Co., incorporated by reference to Exhibit 10.93 to Edison Mission Energy's and Midwest Generation LLC's Registration
Statement on Form S-4 to the Securities and Exchange Commissionon April 20, 2001.                                                                                                                
|10.9.1  |  | Amendment One to Subordinated Loan Agreement, dated as of May 22, 2001, by and among Midwest Generation, LLC and Edison Mission Overseas Co., incorporated by reference to Exhibit 10.93.1 to Midwest Generation, LLC's Form 10-Q for the quarter
ended June 30, 2001.                                                                                                                                                                      
|10.10   |  | Subordinated Revolving Loan Agreement, dated as of December 15, 1999, among Midwest Generation, LLC and Edison Mission Overseas Co., incorporated by reference to Exhibit 10.94 to Edison Mission Energy's and Midwest Generation LLC's
Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                     
|10.10.1 |  | Amendment One to Subordinated Revolving Loan Agreement, dated as of May 22, 2001, by and among Midwest Generation, LLC and Edison Mission Overseas Co., incorporated by reference to Exhibit 10.94.1 to Midwest Generation, LLC's Form 10-Q for the
quarter ended June 30, 2001.                                                                                                                                                            
|10.11   |  | Facility Lease Agreement (T1), dated as of December 15, 1999, between Collins Trust I and Collins Holdings EME, LLC., incorporated by reference to Exhibit 10.95 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on
Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                             

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|10.11.1 |  | Schedule identifying substantially identical agreements to the Facility Lease Agreement constituting Exhibit 10.11 hereto, incorporated by reference to Exhibit 10.95.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on
Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                             
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.12   |  | Amendment One, dated as of June 23, 2000, by and between Collins Trust I and Collins Holdings EME, incorporated by reference to Exhibit 10.96 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the
Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                                       
|10.12.1 |  | Schedule identifying substantially identical agreements to the Amendment One constituting Exhibit 10.12 hereto, incorporated by reference to Exhibit 10.96.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to
the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                        
|10.12.2 |  | Amendment Two, dated as of August 17, 2000, by and between Collins Trust I and Collins Holdings EME LLC, incorporated by reference to Exhibit 10.96.2 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to
the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                               
|10.12.3 |  | Schedule identifying substantially identical agreements to the Amendment Two constituting Exhibit 10.12.2 hereto, incorporated by reference to Exhibit 10.96.3 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4
to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                      
|10.13   |  | Facility Sublease Agreement (T1), dated as of December 15, 1999, by and among Collins Holdings EME, LLC, Midwest Generation, LLC and Collins Trust I, incorporated by reference to Exhibit 10.97 to Edison Mission Energy's and Midwest Generation
LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                    
|10.13.1 |  | Schedule identifying substantially identical agreements to the Facility Sublease Agreement constituting Exhibit 10.13 hereto, incorporated by reference to Exhibit 10.97.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement
on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                          
|10.14   |  | Participation Agreement (T1), dated as of December 15, 1999, among Midwest Generation, LLC, Collins Holdings EME, LLC, Collins Trust I, Wilmington Trust Company, Collins Generation I, LLC, Edison Mission Midwest Holdings Co., Midwest Funding LLC,
 Bayerische Landesbank International S.A., Bayerische Landesbank Girozentrale, and Citibank, N.A., incorporated by reference to Exhibit 10.98 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities
and Exchange Commission on April 20, 2001.
|10.14.1 |  | Schedule identifying substantially identical agreements to the Participation Agreement constituting Exhibit 10.14 hereto, incorporated by reference to Exhibit 10.98.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on
Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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|10.15   |  | Amendment One, dated as of May 9, 2000, by and among Collins Holdings EME, LLC, Collins Trust I, Wilmington Trust Company, Collins Generation I, LLC, Edison Mission Midwest Holdings Co., Midwest Generation, LLC, Midwest Funding LLC, Bayerische
Landesbank International S.A., Bayerische Landesbank Girozentrale and Citibank, N.A., incorporated by reference to Exhibit 10.99 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange
Commission on April 20, 2001.        
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.15.1 |  | Schedule identifying substantially identical agreements to the Amendment One constituting Exhibit 10.15 hereto, incorporated by reference to Exhibit 10.99.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to
the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                
|10.16   |  | Amendment Two, dated as of June 23, 2000, by and among Collins Holdings EME, LLC, Collins Trust I, Wilmington Trust Company, Collins Generation I, LLC, Edison Mission Midwest Holdings Co., Midwest Generation, LLC, Midwest Funding LLC, Bayerische
Landesbank International S.A., Bayerische Landesbank Girozentrale, and Citibank, N.A., incorporated by reference to Exhibit 10.100 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and
Exchange Commission on April 20, 2001.    
|10.16.1 |  | Schedule identifying substantially identical agreements to the Amendment Two constituting Exhibit 10.16 hereto, incorporated by reference to Exhibit 10.100.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4
to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                               
|10.17   |  | Amendment Three, dated as of August 17, 2000, by and among Collins Holdings EME, LLC, Collins Trust I, Wilmington Trust Company, Collins Generation I, LLC, Edison Mission Midwest Holdings Co., Midwest Generation, LLC, Midwest Funding LLC,
Bayerische Landesbank International S.A., Bayerische Landesbank Girozentrale, and Citibank, N.A., incorporated by reference to Exhibit 10.101 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities
and Exchange Commission on April 20, 2001.
|10.17.1 |  | Schedule identifying substantially identical agreements to the Amendment Three constituting Exhibit 10.17 hereto, incorporated by reference to Exhibit 10.101.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4
to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                             
|10.18   |  | Guarantee by Midwest Generation, LLC in favor of the Administrative Agent, dated as of December 15, 1999, incorporated by reference to Exhibit 10.102 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to
the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                       
|10.19   |  | Midwest OP Lease Guaranty made by Midwest Generation, LLC, dated as of December 15, 1999, incorporated by reference to Exhibit 10.103 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities
and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                                                       
|10.19.1 |  | Schedule identifying substantially identical agreements to the Midwest OP Lease Guaranty constituting Exhibit 10.19 hereto, incorporated by reference to Exhibit 10.103.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement
on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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|10.20   |  | Midwest Lessor Lease Guaranty (T1) made by Midwest Generation, LLC, dated as of December 15, 1999, incorporated by reference to Exhibit 10.104 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the
Securities and Exchange Commission on April 20, 2001.                                                                                       
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.20.1 |  | Schedule identifying substantially identical agreements to the Midwest Lessor Lease Guaranty constituting Exhibit 10.20 hereto, incorporated by reference to Exhibit 10.104.1 to Edison Mission Energy's and Midwest Generation LLC's Registration
Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                        
|10.21   |  | Pledge Agreement, dated as of August 17, 2000, between Midwest Generation, LLC and Citibank, N.A., incorporated by reference to Exhibit 10.105 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the
Securities and Exchange Commission on April 20, 2001.                                                                                       
|10.21.1 |  | Schedule identifying substantially identical agreements to the Pledge Agreement constituting Exhibit 10.21 hereto, incorporated by reference to Exhibit 10.105.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form
S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                     
|10.22   |  | Lease Agreement, dated as of June 23, 2000, between Midwest Generation, LLC and EME/CDL Trust, incorporated by reference to Exhibit 10.106 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the
Securities and Exchange Commission on April 20, 2001.                                                                                           
|10.23   |  | Reimbursement Agreement I, dated as of December 15, 1999 entered into between Bayerische Landesbank International S.A. and Midwest Generation, LLC, incorporated by reference to Exhibit 10.107 to Edison Mission Energy's and Midwest Generation
LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                      
|10.23.1 |  | Schedule identifying substantially identical agreements to the Reimbursement Agreement I constituting Exhibit 10.23 hereto, incorporated by reference to Exhibit 10.107.1 to Edison Mission Energy's and Midwest Generation LLC's Registration Statement
on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                            
|10.24   |  | Credit Agreement, dated as of December 15, 1999, among Edison Mission Midwest Holdings Co., Certain Commercial Lending Institutions, and The Chase Manhattan Bank, incorporated by reference to Exhibit 10.108 to Edison Mission Energy's and Midwest
Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                       
|10.24.1 |  | Amendment One, dated as of May 9, 2000, by and among Edison Mission Midwest Holdings Co. and each of certain commercial lending institutions party thereto, incorporated by reference to Exhibit 10.108.1 to Edison Mission Energy's and Midwest
Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                            
|10.24.2 |  | Amendment Two, dated as of June 23, 2000, by and among Edison Mission Midwest Holdings Co., The Chase Manhattan Bank and each of certain commercial lending institutions party thereto, incorporated by reference to Exhibit 10.108.2 to Edison
Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.
|        |  |                                                                                                                                                                                                                                                                                                                                                                                              

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|10.24.3 |  | Amendment Three, dated as of August 17, 2000, by and among Edison Mission Midwest Holdings Co., The Chase Manhattan Bank and each of certain commercial lending institutions party thereto, incorporated by reference to Exhibit 10.108.3 to Edison
Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                      
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.24.4 |  | Amendment Four, dated as of December 12, 2000, by and among Edison Mission Midwest Holdings Co., The Chase Manhattan Bank and each of certain commercial lending institutions party thereto, incorporated by reference to Exhibit 10.108.4 to Edison
Mission Energy's and Midwest Generation LLC's Registration Statement on Form S-4 to the Securities and Exchange Commission on April 20, 2001.                                                                                                                     
|10.25   |  | Tax-Allocation Agreement, effective January 1, 2002, by and between Midwest Generation, LLC and Edison Mission Midwest Holdings Co., incorporated by reference to Exhibit 10.25 to Midwest Generation, LLC's Form 10-Q for the quarter ended
September 30, 2002.                                                                                                                                                                                                                                                       
|10.26   |  | Collateral Agency and Intercreditor Agreement, dated as of December 15, 1999, among Midwest Generation EME LLC, Edison Mission Midwest Holdings Co., Edison Mission Overseas Co., Midwest Generation, LLC, Collins Holdings EME, LLC, each Owner
Lessor party thereto, Midwest Funding LLC, the Holdings Administrative Agent, each Holder Representative party thereto, each Other Representative party thereto, the Midwest LC Issuer, the Depositary Agent, the Depositary Bank, and the Holdings
Collateral Agent.*
|10.26.1 |  | Amendment One to the Intercreditor Agreement, dated as of May 9, 2000, by and among The Chase Manhattan Bank as Holdings Administrative Agent, Citibank, N.A., as Trust I Holder Representative, Trust II Holder Representative,
Trust III Holder Representative, and Trust IV Holder Representative, and Bayerische Landesbank International, S.A., as Midwest LC Issuer.*                                                                                                                                            
|10.27   |  | Master Purchase, Sale and Services Agreement, dated as of March 23, 2001, between Midwest Generation LLC and Edison Mission Marketing & Trading, Inc.*                                                                                                                                                                                                                                                                                                                                                                 
|21      |  | List of Subsidiaries of Midwest Generation, LLC.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|99.1    |  | Statement Pursuant to 18 U.S.C. Section 1350.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

| | Midwest Generation, LLC(Registrant)
| | -----------------------------------
| |                                    
| | By:                                
| |                                    
| | Date:                              

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.

|Signature
Principal Executive Officer:     |  | Title                                 |  | Date          
|------------------------------------------ |  | ------------------------------------- |  | --------------
|                                           |  |                                       |  |               
|/s/ Georgia R. NelsonGeorgia R. Nelson     |  | Manager and President                 |  | March 27, 2003
|Principal Financial Officer:               |  |                                       |  |               
|/s/ Kevin M. SmithKevin M. Smith           |  | Manager, Vice President and Treasurer |  | March 27, 2003
|Principal Accounting Officer:              |  |                                       |  |               
|/s/ Mark C. ClarkeMark C. Clarke           |  | Vice President and Controller         |  | March 27, 2003
|Majority of Board of Managers:             |  |                                       |  |               
|/s/ John K. DeshongJohn K. Deshong         |  | Manager and Vice President            |  | March 27, 2003
|/s/ Ronald L. LitzingerRonald L. Litzinger |  | Manager and Vice President            |  | March 27, 2003
|/s/ Raymond W. VickersRaymond W. Vickers   |  | Manager                               |  | March 27, 2003

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CERTIFICATIONS

I,
Georgia R. Nelson, certify that:





|Date: March 27, 2003 |  |  | /s/ Georgia R. NelsonGeorgia R. Nelson Manager and President
|-------------------- |  |  | ------------------------------------------------------------

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CERTIFICATIONS

I,
Kevin M. Smith, certify that:





|Date: March 27, 2003 |  |  | /s/ Kevin M. SmithKevin M. Smith Manager, Vice President and Treasurer
|-------------------- |  |  | ----------------------------------------------------------------------

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SCHEDULE II

MIDWEST GENERATION, LLC        VALUATION AND QUALIFYING ACCOUNTS        (In thousands)

|                             |                                 |  |   | Additions |  |   |       | 
|---------------------------- | ------------------------------- |  | - | --------- |  | - | ----- | 
|
|Year Ended December 31, 2002 |                                 |  |   |           |  |   |       | 
|                             | Allowance for doubtful accounts |  | $ | 4,269     |  |   |      | 
|Year Ended December 31, 2001 |                                 |  |   |           |  |   |       | 
|                             | Allowance for doubtful accounts |  |   |          |  | $ | 4,269 | 
|Year Ended December 31, 2000 |                                 |  |   |           |  |   |       | 
|                             | Allowance for doubtful accounts |  |   |          |  |   |      | 

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