----

|                                                         | Page |
|--------------------------------------------------------------|------|
| Glossary                                                     | 1    |
| Independent Auditors’ Report                           | 2    |
| Consolidated Statements of Operations                        | 3    |
| Consolidated Balance Sheets                                  | 4    |
| Consolidated Statements of Cash Flows                        | 6    |
| Consolidated Statements of Changes in Members’ Capital | 8    |
| Consolidated Statements of Comprehensive Income (Loss)       | 9    |
| Notes to Consolidated Financial Statements                   | 10   |

----

| AOCI........................... | Accumulated Other Comprehensive Income                                                             |
|---------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|
| Altura Cogen.................                   | Optim Energy Altura Cogen, LLC, formerly Altura Cogen, LLC                                         |
| CAIR.........................       | US Environmental Protection Agency’s Clear Air Interstate Rule                               |
| Cascade.......................          | Cascade Investment, LLC                                                                            |
| ECJV.........................       | ECJV Holdings, LLC                                                                                 |
| ERCOT.......................            | Electric Reliability Council of Texas                                                              |
| FASB.........................       | Financial Accounting Standards Board                                                               |
| GAAP.........................       | Generally Accepted Accounting Principles in the United States of America                           |
| LCC..........................       | Lyondell Chemical Company                                                                          |
| LIBOR.......................            | London Interbank Offered Rate                                                                      |
| MMbtu......................             | One Million British Thermal Units                                                                  |
| MW...........................   | Megawatt                                                                                           |
| MWh...........................  | Megawatt Hour                                                                                      |
| NOx..........................       | Nitrogen Oxide                                                                                     |
| NRG..........................       | NRG Energy Inc. and Subsidiaries                                                                   |
| NRG Cedar Bayou.........                                | NRG Cedar Bayou Development Company, LLC                                                           |
| NRG Texas...................                    | NRG Texas Power, LLC, plant operator of Cedar Bayou 4, subsidiary of NRG Energy Inc.               |
| NYMEX.....................              | New York Mercantile Exchange                                                                       |
| OCI...........................  | Other Comprehensive Income                                                                         |
| Optim Energy...............                     | Optim Energy, LLC and Subsidiaries, formerly EnergyCo, LLC and Subsidiaries                        |
| Optim Energy Cedar Bayou                                            | Optim Energy Cedar Bayou 4, LLC, formerly EnergyCo Cedar Bayou 4, LLC                              |
| Optim Energy Generation..                                           | Optim Energy Generation, LLC and Subsidiaries, formerly Altura Energy, LLC and Subsidiaries        |
| Optim Energy Marketing..                                            | Optim Energy Marketing, LLC and Subsidiaries, formerly EnergyCo Marketing and Trading, LLC or ECMT |
| PNMR........................        | PNM Resources, Inc.                                                                                |
| PNMR Services.............                          | PNMR Services Company, a wholly-owned Subsidiary of PNMR                                           |
| SEPSA......................             | Steam and Electric Power Sales Agreement, an agreement with LCC                                    |
| SO2..........................       | Sulfur Dioxide                                                                                     |
| Twin Oaks..................                 | Optim Energy Twin Oaks, LP, formerly Altura Power LP                                               |

----

----

|                                             |   |                    |    |   |               |   |    |              |   |
|--------------------------------------------------|--------|-------------------------|---------|--------|--------------------|--------|---------|-------------------|--------|
|                                             |   |                    |    |   |               |   |    | Period from       |   |
|                                             |   | Year Ended December 31, |    |   | January 8, 2007 to |   |
|                                             |   | 2009                    |    |   | 2008               |   |    | December 31, 2007 |   |
|                                             |   |                    |    |   | (In thousands)     |   |    |              |   |
|                                             |   |                    |    |   |               |   |    |              |   |
| Operating Revenues                               |   | $                       | 319,507 |   |               | $      | 472,665 |              |   | $ | 224,339 |   |
|                                             |   |                    |    |   |               |   |    |              |   |   |   |   |
| Cost of Sales                                    |   |                    | 201,547 |   |               |   | 366,477 |              |   |   | 147,312 |   |
|                                             |   |                    |    |   |               |   |    |              |   |   |   |   |
|                                             |   |                    | 117,960 |   |               |   | 106,188 |              |   |   | 77,027 |   |
|                                             |   |                    |    |   |               |   |    |              |   |   |   |   |
| Operating Expenses:                              |   |                    |    |   |               |   |    |              |   |   |   |   |
|    Non-fuel operations and maintenance |   |                    | 33,118  |   |               |   | 26,053  |              |   |   | 13,253 |   |
|    Administrative and general          |   |                    | 27,910  |   |               |   | 26,232  |              |   |   | 15,445 |   |
|    Depreciation and amortization       |   |                    | 37,171  |   |               |   | 30,545  |              |   |   | 15,665 |   |
|    Impairment of intangible asset      |   |                    | -       |   |               |   | 21,794  |              |   |   | - |   |
|    Emission allowances write off       |   |                    | 51,586  |   |               |   | 31,739  |              |   |   | - |   |
|    Taxes other than income taxes       |   |                    | 11,089  |   |               |   | 11,954  |              |   |   | 4,804 |   |
| Total Operating Expenses                         |   |                    | 160,874 |   |               |   | 148,317 |              |   |   | 49,167 |   |
|                                             |   |                    |    |   |               |   |    |              |   |   |   |   |
| Operating Income (Loss)                          |   |                    | (42,914 | )      |               |   | (42,129 | )                 |   |   | 27,860 |   |
|                                             |   |                    |    |   |               |   |    |              |   |   |   |   |
| Other income and (deductions), net               |   |                    | (318    | )      |               |   | 740     |              |   |   | 635 |   |
| Interest expense                                 |   |                    | (13,755 | )      |               |   | (19,183 | )                 |   |   | (17,907 | ) |
|                                             |   |                    |    |   |               |   |    |              |   |   |   |   |
| Earnings (Loss) Before Income Taxes              |   |                    | (56,987 | )      |               |   | (60,572 | )                 |   |   | 10,588 |   |
|                                             |   |                    |    |   |               |   |    |              |   |   |   |   |
| Income Taxes (Benefit)                           |   |                    | (161    | )      |               |   | (88     | )                 |   |   | 434 |   |
|                                             |   |                    |    |   |               |   |    |              |   |   |   |   |
| Net Earnings (Loss)                              |   | $                       | (56,826 | )      |               | $      | (60,484 | )                 |   | $ | 10,154 |   |
|                                             |   |                    |    |   |               |   |    |              |   |   |   |   |

----

|                                                                   |   | December 31,   |      |
|------------------------------------------------------------------------|--------|----------------|-----------|
|                                                                   |   | 2009           |      |   | 2008 |   |
|                                                                   |   | (In thousands) |      |
| ASSETS                                                                 |   |           |      |   |   |   |
| Current Assets:                                                        |   |           |      |   |   |   |
|    Cash and cash equivalents                                 |   | $              | 14,953    |   |   | $ | 13,964 |   |
|    Accounts receivable                                       |   |           | 24,512    |   |   |   | 23,106 |   |
|    Inventory                                                 |   |           | 25,070    |   |   |   | 21,252 |   |
|    Intangible assets                                         |   |           | 16,303    |   |   |   | 19,450 |   |
|    Derivative instruments                                    |   |           | 37,116    |   |   |   | 72,548 |   |
|    Other current assets                                      |   |           | 10,665    |   |   |   | 1,357 |   |
|       Total current assets                    |   |           | 128,619   |   |   |   | 151,677 |   |
|                                                                   |   |           |      |   |   |   |   |   |
| Property, Plant and Equipment:                                         |   |           |      |   |   |   |   |   |
|    Plant in service                                          |   |           | 1,023,630 |   |   |   | 785,418 |   |
|    Computer hardware and software                            |   |           | 5,210     |   |   |   | - |   |
|    Less accumulated depreciation                             |   |           | 93,092    |   |   |   | 56,412 |   |
|                                                                   |   |           | 935,748   |   |   |   | 729,006 |   |
|    Construction work in progress                             |   |           | 16,009    |   |   |   | 217,414 |   |
|       Net property, plant and equipment       |   |           | 951,757   |   |   |   | 946,420 |   |
|                                                                   |   |           |      |   |   |   |   |   |
| Deferred Charges and Other Assets:                                     |   |           |      |   |   |   |   |   |
|    Intangible assets, net of amortization                    |   |           | 84,077    |   |   |   | 100,380 |   |
|    Derivative instruments                                    |   |           | -         |   |   |   | 18,596 |   |
|    Inventory                                                 |   |           | 51,420    |   |   |   | 105,190 |   |
|    Other deferred charges                                    |   |           | 1,887     |   |   |   | 610 |   |
|       Total deferred charges and other assets |   |           | 137,384   |   |   |   | 224,776 |   |
|                                                                   |   |           |      |   |   |   |   |   |
| Total Assets                                                           |   | $              | 1,217,760 |   |   | $ | 1,322,873 |   |
|                                                                   |   |           |      |   |   |   |   |   |

----

|                                                                        |   | December 31,   |      |
|-----------------------------------------------------------------------------|--------|----------------|-----------|
|                                                                        |   | 2009           |      |   | 2008 |   |
|                                                                        |   | (In thousands) |      |
| LIABILITIES AND MEMBERS' CAPITAL                                            |   |           |      |   |   |   |
| Current Liabilities:                                                        |   |           |      |   |   |   |
|    Accounts payable                                               |   | $              | 34,948    |   |   | $ | 33,660 |   |
|    Related party payable                                          |   |           | 3,675     |   |   |   | 1,802 |   |
|    Accrued interest and taxes                                     |   |           | 11,430    |   |   |   | 14,426 |   |
|    Derivative instruments                                         |   |           | 6,253     |   |   |   | 22,627 |   |
|    Current portion of contract liability                          |   |           | 2,676     |   |   |   | 12,811 |   |
|    Other current liabilities                                      |   |           | 7,208     |   |   |   | 19,500 |   |
|       Total current liabilities                    |   |           | 66,190    |   |   |   | 104,826 |   |
|                                                                        |   |           |      |   |   |   |   |   |
| Long Term Debt                                                              |   |           | 755,000   |   |   |   | 730,778 |   |
|                                                                        |   |           |      |   |   |   |   |   |
| Deferred Credits and Other Liabilities:                                     |   |           |      |   |   |   |   |   |
|    Asset retirement obligations                                   |   |           | 3,560     |   |   |   | 2,435 |   |
|    Accumulated deferred income taxes                              |   |           | 1,286     |   |   |   | 1,930 |   |
|    Contract liability                                             |   |           | -         |   |   |   | 2,676 |   |
|    Other deferred credits                                         |   |           | 864       |   |   |   | 722 |   |
|       Total deferred credits and other liabilities |   |           | 5,710     |   |   |   | 7,763 |   |
|                                                                        |   |           |      |   |   |   |   |   |
| Members' Capital:                                                           |   |           |      |   |   |   |   |   |
|    Accumulated other comprehensive income                         |   |           | 30,364    |   |   |   | 62,184 |   |
|    Other members' capital                                         |   |           | 360,496   |   |   |   | 417,322 |   |
|       Total members' capital                       |   |           | 390,860   |   |   |   | 479,506 |   |
|                                                                        |   |           |      |   |   |   |   |   |
| Total Liabilities and Members' Capital                                      |   | $              | 1,217,760 |   |   | $ | 1,322,873 |   |
|                                                                        |   |           |      |   |   |   |   |   |

----

|                                                                                                        |   |                    |    |   |               |   |     | Period from       |   |
|-------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|--------|--------------------|--------|----------|-------------------|--------|
|                                                                                                        |   | Year Ended December 31, |    |   | January 8, 2007 to |   |
|                                                                                                        |   | 2009                    |    |   | 2008               |   |     | December 31, 2007 |   |
|                                                                                                        |   |                    |    |   | (In thousands)     |   |     |              |   |
| Cash Flows From Operating Activities:                                                                       |   |                    |    |   |               |   |     |              |   |
| Net Earnings (Loss)                                                                                         |   | $                       | (56,826 | )      |               | $      | (60,484  | )                 |   | $ | 10,154 |   |
| Adjustments to reconcile net earnings (loss) to net cash                                                    |   |                    |    |   |               |   |     |              |   |   |   |   |
|   flows from operating activities:                                                                |   |                    |    |   |               |   |     |              |   |   |   |   |
|    Depreciation and amortization                                                                  |   |                    | 37,171  |   |               |   | 30,545   |              |   |   | 15,665 |   |
|    Contract amortization                                                                          |   |                    | 6,639   |   |               |   | (2,225   | )                 |   |   | (36,439 | ) |
|    Emission allowance expense                                                                     |   |                    | 4,710   |   |               |   | 11,214   |              |   |   | 2,293 |   |
|    Net unrealized gains (losses) on derivatives                                                   |   |                    | 7,005   |   |               |   | (5,477   | )                 |   |   | (470 | ) |
|    Impairment of intangible assets                                                                |   |                    | -       |   |               |   | 21,794   |              |   |   | - |   |
|    Emission allowances write off                                                                  |   |                    | 51,586  |   |               |   | 31,739   |              |   |   | - |   |
|    Other, net                                                                                     |   |                    | 609     |   |               |   | 3        |              |   |   | - |   |
|    Changes in certain assets and liabilities:                                                     |   |                    |    |   |               |   |     |              |   |   |   |   |
| Accounts receivable                                                                                         |   |                    | (1,492  | )      |               |   | 7,627    |              |   |   | (17,935 | ) |
| Inventory                                                                                                   |   |                    | (4,941  | )      |               |   | (8       | )                 |   |   | (740 | ) |
| Other current assets                                                                                        |   |                    | (6,279  | )      |               |   | (3,175   | )                 |   |   | (6,821 | ) |
| Other assets                                                                                                |   |                    | (1,286  | )      |               |   | (346     | )                 |   |   | (67 | ) |
| Accounts payable                                                                                            |   |                    | 6,256   |   |               |   | 1,687    |              |   |   | 20,458 |   |
| Related party payable                                                                                       |   |                    | 1,873   |   |               |   | 447      |              |   |   | 1,355 |   |
| Accrued interest and taxes                                                                                  |   |                    | (3,647  | )      |               |   | 1,205    |              |   |   | 9,944 |   |
|           Other current liabilities                            |   |                    | (5,092  | )      |               |   | 7,434    |              |   |   | 5,831 |   |
|           Other liabilities                                    |   |                    | (382    | )      |               |   | 2,006    |              |   |   | 178 |   |
|             Net cash flows from operating activities |   |                    | 35,904  |   |               |   | 43,986   |              |   |   | 3,406 |   |
|                                                                                                        |   |                    |    |   |               |   |     |              |   |   |   |   |
| Cash Flows From Investing Activities:                                                                       |   |                    |    |   |               |   |     |              |   |   |   |   |
|    Additions to property, plant and equipment                                                     |   |                    | (59,137 | )      |               |   | (119,939 | )                 |   |   | (77,459 | ) |
|    Acquisition                                                                                    |   |                    | -       |   |               |   | -        |              |   |   | (481,549 | ) |
|    Other, net                                                                                     |   |                    | -       |   |               |   | -        |              |   |   | (299 | ) |
|           Net cash flows used in investing activities          |   |                    | (59,137 | )      |               |   | (119,939 | )                 |   |   | (559,307 | ) |
|                                                                                                        |   |                    |    |   |               |   |     |              |   |   |   |   |
| Cash Flows From Financing Activities:                                                                       |   |                    |    |   |               |   |     |              |   |   |   |   |
|    Long-term debt borrowings                                                                      |   |                    | 45,000  |   |               |   | 80,000   |              |   |   | 650,778 |   |
|    Long-term debt repayments                                                                      |   |                    | (20,778 | )      |               |   | -        |              |   |   | - |   |
|    Member contributions                                                                           |   |                    | -       |   |               |   | -        |              |   |   | 366,940 |   |
|    Member distributions                                                                           |   |                    | -       |   |               |   | -        |              |   |   | (451,900 | ) |
|           Net cash flows from financing activities             |   |                    | 24,222  |   |               |   | 80,000   |              |   |   | 565,818 |   |
|                                                                                                        |   |                    |    |   |               |   |     |              |   |   |   |   |
| Change in Cash and Cash Equivalents                                                                         |   |                    | 989     |   |               |   | 4,047    |              |   |   | 9,917 |   |
| Cash and Cash Equivalents at Beginning of Period                                                            |   |                    | 13,964  |   |               |   | 9,917    |              |   |   | - |   |
| Cash and Cash Equivalents at End of Period                                                                  |   | $                       | 14,953  |   |               | $      | 13,964   |              |   | $ | 9,917 |   |
|                                                                                                        |   |                    |    |   |               |   |     |              |   |   |   |   |
| Supplemental Cash Flow Disclosures:                                                                         |   |                    |    |   |               |   |     |              |   |   |   |   |
|    Interest paid, net of capitalized interest and guarantee fees                                  |   | $                       | 8,036   |   |               | $      | 19,440   |              |   | $ | 11,500 |   |
|    Income taxes paid, net of refunds                                                              |   | $                       | 79      |   |               | $      | -        |              |   | $ | - |   |
|                                                                                                        |   |                    |    |   |               |   |     |              |   |   |   |   |

----

| Supplemental schedule of noncash investing and financing activities:                          |   |   |    |
|-----------------------------------------------------------------------------------------------|--------|--------|---------|
| On June 1, 2007, PNMR contributed its ownership of Optim Energy Generation,                   |   |   |    |
| including the Twin Oaks Power facility, to Optim Energy at fair value.  See Note 2. |   |   |    |
|                                                                                          |   |   |    |
| The following table presents (in thousands) the balance sheet of Optim Energy                 |   |   |    |
| Generation as recorded as of its acquisition:                                                 |   |   |    |
|                                                                                          |   |   |    |
| Current assets                                                                                |   | $      | 16,616  |   |
| Derivative instruments                                                                        |   |   | 2,822   |   |
| Net property, plant and equipment                                                             |   |   | 575,538 |   |
| Intangible assets                                                                             |   |   | 21,794  |   |
| Deferred charges                                                                              |   |   | 24,518  |   |
|      Total assets acquired                                           |   |   | 641,288 |   |
|                                                                                          |   |   |    |   |
| Current liabilities                                                                           |   |   | 56,903  |   |
| Deferred credits                                                                              |   |   | 28,912  |   |
| Derivative instruments                                                                        |   |   | 9,147   |   |
|      Total liabilities assumed                                       |   |   | 94,962  |   |
|                                                                                          |   |   |    |   |
|           Net assets acquired               |   | $      | 546,326 |   |
|                                                                                          |   |   |    |   |

----

|                                      |   | Class A |    |   | Class B        |   |    | Total  |   |
|-------------------------------------------|--------|---------|---------|--------|----------------|--------|---------|--------|--------|
|                                      |   |    |    |   | (In thousands) |   |    |   |   |
| Balance at January 8, 2007                |   | $       | -       |   |           | $      | -       |   |   | $ | - |   |
| Contribution of Optim Energy Generation   |   |    | 273,163 |   |           |   | 273,163 |   |   |   | 546,326 |   |
| Other cash contributions                  |   |    | 45,000  |   |           |   | 45,000  |   |   |   | 90,000 |   |
| Other cash distributions                  |   |    | (87,500 | )      |           |   | (87,500 | )      |   |   | (175,000 | ) |
| Allocations of other comprehensive income |   |    | 12,265  |   |           |   | 12,265  |   |   |   | 24,530 |   |
| Allocations of net earnings               |   |    | 5,077   |   |           |   | 5,077   |   |   |   | 10,154 |   |
| Balance at December 31, 2007              |   |    | 248,005 |   |           |   | 248,005 |   |   |   | 496,010 |   |
|                                      |   |    |    |   |           |   |    |   |   |   |   |   |
| Allocations of other comprehensive income |   |    | 21,990  |   |           |   | 21,990  |   |   |   | 43,980 |   |
| Allocations of net (loss)                 |   |    | (30,242 | )      |           |   | (30,242 | )      |   |   | (60,484 | ) |
|                                      |   |    |    |   |           |   |    |   |   |   |   |   |
| Balance at December 31, 2008              |   |    | 239,753 |   |           |   | 239,753 |   |   |   | 479,506 |   |
|                                      |   |    |    |   |           |   |    |   |   |   |   |   |
| Allocations of other comprehensive (loss) |   |    | (15,910 | )      |           |   | (15,910 | )      |   |   | (31,820 | ) |
| Allocations of net (loss)                 |   |    | (28,413 | )      |           |   | (28,413 | )      |   |   | (56,826 | ) |
|                                      |   |    |    |   |           |   |    |   |   |   |   |   |
| Balance at December 31, 2009              |   | $       | 195,430 |   |           | $      | 195,430 |   |   | $ | 390,860 |   |

----

|                                                 |   |                    |    |   |               |   |    |              |   |
|------------------------------------------------------|--------|-------------------------|---------|--------|--------------------|--------|---------|-------------------|--------|
|                                                 |   |                    |    |   |               |   |    | Period from       |   |
|                                                 |   | Year Ended December 31, |    |   | January 8, 2007 to |   |
|                                                 |   | 2009                    |    |   | 2008               |   |    | December 31, 2007 |   |
|                                                 |   |                    |    |   |               |   |    |              |   |
| Net Earnings (Loss)                                  |   | $                       | (56,826 | )      |               | $      | (60,484 | )                 |   | $ | 10,154 |   |
|                                                 |   |                    |    |   |               |   |    |              |   |   |   |   |
| Other Comprehensive Income:                          |   |                    |    |   |               |   |    |              |   |   |   |   |
| Change in fair market value of designated cash       |   |                    |    |   |               |   |    |              |   |   |   |   |
| flow hedges, net of income tax expense               |   |                    |    |   |               |   |    |              |   |   |   |   |
| of $392, $695, and $0                                |   |                    | 38,860  |   |               |   | 68,780  |              |   |   | 26,121 |   |
| Reclassification adjustment for (gain) on designated |   |                    |    |   |               |   |    |              |   |   |   |   |
| cash flow hedges included in net earnings (loss),    |   |                    |    |   |               |   |    |              |   |   |   |   |
| net of income tax expense of $714, $250, and $0      |   |                    | (70,680 | )      |               |   | (24,800 | )                 |   |   | (1,591 | ) |
|                                                 |   |                    |    |   |               |   |    |              |   |   |   |   |
| Total Other Comprehensive (Loss) Income              |   |                    | (31,820 | )      |               |   | 43,980  |              |   |   | 24,530 |   |
|                                                 |   |                    |    |   |               |   |    |              |   |   |   |   |
| Comprehensive Income (Loss)                          |   | $                       | (88,646 | )      |               | $      | (16,504 | )                 |   | $ | 34,684 |   |
|                                                 |   |                    |    |   |               |   |    |              |   |   |   |   |

----

----

|                           |   | December 31,   |   |
|--------------------------------|--------|----------------|--------|
|                           |   | 2009           |   |   | 2008 |   |
|                           |   | (In thousands) |   |
|                           |   |           |   |   |   |   |
| Emission allowances - current  |   | $              | 8,068  |   |   | $ | 10,729 |   |
| Materials and supplies         |   |           | 14,998 |   |   |   | 9,304 |   |
| Coal                           |   |           | 2,004  |   |   |   | 1,219 |   |
| Total current inventories      |   |           | 25,070 |   |   |   | 21,252 |   |
| Emission allowances - deferred |   |           | 51,420 |   |   |   | 105,190 |   |
| Total inventories              |   | $              | 76,490 |   |   | $ | 126,442 |   |

----

|                             |   | December 31,   |    |
|----------------------------------|--------|----------------|---------|
|                             |   | 2009           |    |   | 2008 |   |
|                             |   | (In thousands) |    |
| Altura Cogen acquisition - SEPSA |   | $              | 134,893 |   |   | $ | 134,893 |   |
| Accumulated amortization         |   |           | 34,513  |   |   |   | 15,063 |   |
|                             |   |           |    |   |   |   |   |   |
|                             |   | $              | 100,380 |   |   | $ | 119,830 |   |

| Structures and improvements           | 5 to 35 years |
|---------------------------------------|---------------|
| Generation equipment                  | 3 to 35 years |
| Office furniture and fixtures         | 5 to 15 years |
| Transportation equipment/trailers     | 5 to 17 years |
| Computer and communications equipment | 3 to 15 years |

----

----

| At August 1, 2007                                       |   |   |
|---------------------------------------------------------|--------|--------|
| (In thousands)                                          |   |   |
|                                                    |   |   |   |
| Assets                                                  |   |   |   |
| Current assets                                          |   | $      | 16,532 |   |
| Plant, property and equipment                           |   |   | 202,747 |   |
| Intangible assets - amortizable                         |   |   | 139,412 |   |
| Defered charges                                         |   |   | 127,733 |   |
|      Total asset acquired      |   |   | 486,424 |   |
|                                                    |   |   |   |   |
| Liabilities                                             |   |   |   |   |
| Current liabilities                                     |   |   | 1,188 |   |
| Current contingent purchase liability                   |   |   | 1,571 |   |
| Asset retirement obligation                             |   |   | 2,116 |   |
|      Total liabilities assumed |   |   | 4,875 |   |
|                                                    |   |   |   |   |
|      Net assets acquired       |   | $      | 481,549 |   |

----

| At June 1, 2007                                         |   |   |    |
|---------------------------------------------------------|--------|--------|---------|
| (In thousands)                                          |   |   |    |
|                                                    |   |   |    |
| Assets                                                  |   |   |    |
| Current assets                                          |   | $      | 16,616  |   |
| Derivative instruments                                  |   |   | 2,822   |   |
| Net propety, plant and equipment                        |   |   | 575,538 |   |
| Intangible assets                                       |   |   | 21,794  |   |
| Deferred charges                                        |   |   | 24,518  |   |
|      Total asset acquired      |   |   | 641,288 |   |
|                                                    |   |   |    |   |
| Liabilities                                             |   |   |    |   |
| Current liabilities                                     |   |   | 56,903  |   |
| Deferred credits                                        |   |   | 28,912  |   |
| Derivative instruments                                  |   |   | 9,147   |   |
|      Total liabilities assumed |   |   | 94,962  |   |
|                                                    |   |   |    |   |
|      Net assets acquired       |   |   | 546,326 |   |
|                                                    |   |   |    |   |
| Accumulated other comprehensive income (loss)           |   |   | (6,326  | ) |
|                                                    |   |   |    |   |
|      Net members' equity       |   | $      | 552,652 |   |

----

----

----

----

|                |   | Mark-to-Market Instruments |   |   | Hedge Instruments |   |
|---------------------|--------|----------------------------|--------|--------|-------------------|--------|
|                |   | Economic Hedges            |   |   | Trading           |   |   | Cash Flow Hedges |   |
|                |   | December 31,               |   |
|                |   | 2009                       |   |   | 2008              |   |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
|                |   | (in thousands)             |   |
| Current assets      |   | $                          | 6,447  |   |              | $      | 24,032 |   |   |   | - |   |   | $ | 4,300 |   |   | $ | 30,669 |   |   | $ | 44,216 |   |
|                |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred charges    |   |                       | -      |   |              |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 18,596 |   |
|                |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current liabilities |   |                       | (6,253 | )      |              |   | (18,472 | ) |   |   | - |   |   |   | (4,155 | ) |   |   | - |   |   |   | - |   |
|                |   |                       |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                |   | $                          | 194    |   |              | $      | 5,560 |   |   | $ | - |   |   | $ | 145 |   |   | $ | 30,669 |   |   | $ | 62,812 |   |

|                                |   | Year EndedDecember 31, 2009 |   |
|-------------------------------------|--------|-----------------------------|--------|
|                                |   | Economic Hedges             |   |
|                                |   | (In thousands)              |   |
|                                |   |                        |   |
| Operating revenues                  |   | $                           | (587   | ) |
| Cost of sales                       |   |                        | (1,369 | ) |
|                                |   |                        |   |   |
|    Total gain (loss) |   | $                           | (1,956 | ) |

| Gain (loss) excluding tax effects |    |
|-----------------------------------|---------|
| Recognized                        |    | Reclassified from OCI into Earnings |   |
| In OCI                            |    | Location |   | Amount |   |
| (In thousands)                    |    |
|                              |    | Operating revenues |   | $ | 71,387 |   |
| $                                 | (32,142 | ) | Cost of sales |   |   | 7 |   |
|                              |    |   |   |   |   |   |   |
|                              |    |   |   |   | $ | 71,394 |   |

|   | Natural Gas (in Mmbtu) |   | Power (in MWh) |
|--------|------------------------|--------|----------------|
|   | Economic               |   | Economic       |   | Qualified Cash |
|   | Hedges                 |   | Hedges         |   | Flow Hedges |
|   |                   |   |           |   |   |
|   | 62,970,000             |   | (2,979,714)    |   | (2,006,040) |

----

|                             |   |           |   |   | Quoted Prices    |   |   | Significant |   |   |         |   |
|----------------------------------|--------|----------------|--------|--------|------------------|--------|--------|-------------|--------|--------|--------------|--------|
|                             |   |           |   |   | in Active        |   |   | Other       |   |   | Significant  |   |
|                             |   |           |   |   | Market for       |   |   | Observable  |   |   | Unobservable |   |
|                             |   |           |   |   | Identical Assets |   |   | Inputs      |   |   | Inputs       |   |
|                             |   | Total          |   |   | (Level 1)        |   |   | (Level 2)   |   |   | (Level 3)    |   |
|                             |   | (In thousands) |   |
| Commodity derivative assets      |   | $              | 37,116 |   |             | $      | 3,698  |        |   | $      | 2,115        |   |   | $ | 31,303 |   |
| Commodity derivative liabilities |   |           | (6,253 | )      |             |   | (3,771 | )           |   |   | (1,841       | )      |   |   | (641 | ) |
|                             |   |           |   |   |             |   |   |        |   |   |         |   |   |   |   |   |
| Net                              |   | $              | 30,863 |   |             | $      | (73    | )           |   | $      | 274          |   |   | $ | 30,662 |   |

|                             |   |           |    |   | Quoted Prices    |   |    | Significant |   |   |         |   |
|----------------------------------|--------|----------------|---------|--------|------------------|--------|---------|-------------|--------|--------|--------------|--------|
|                             |   |           |    |   | in Active        |   |    | Other       |   |   | Significant  |   |
|                             |   |           |    |   | Market for       |   |    | Observable  |   |   | Unobservable |   |
|                             |   |           |    |   | Identical Assets |   |    | Inputs      |   |   | Inputs       |   |
|                             |   | Total          |    |   | (Level 1)        |   |    | (Level 2)   |   |   | (Level 3)    |   |
|                             |   | (In thousands) |    |
| Commodity derivative assets      |   | $              | 91,144  |   |             | $      | 26,997  |        |   | $      | 6,793        |   |   | $ | 57,354 |   |
| Commodity derivative liabilities |   |           | (22,627 | )      |             |   | (15,701 | )           |   |   | (6,922       | )      |   |   | (4 | ) |
|                             |   |           |    |   |             |   |    |        |   |   |         |   |   |   |   |   |
| Net                              |   | $              | 68,517  |   |             | $      | 11,296  |        |   | $      | (129         | )      |   | $ | 57,350 |   |

----

|                                                                             |   | Year Ended December 31, |    |
|----------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                             |   | 2009                    |    |   | 2008 |   |
| Level 3 Fair Value Assets and Liabilities                                        |   | (In thousands)          |    |
|                                                                             |   |                    |    |   |   |   |
| Beginning balance                                                                |   | $                       | 57,350  |   |   | $ | 15,716 |   |
|    Total gains (losses) included in operating revenues                 |   |                    | 230     |   |   |   | (1,480 | ) |
|    Total gains (losses) included in OCI pre-tax                        |   |                    | 36,351  |   |   |   | 50,427 |   |
|    Purchases, issuances and settlements (1)                            |   |                    | (63,269 | ) |   |   | (7,313 | ) |
|                                                                             |   |                    |    |   |   |   |   |   |
| Balance at year end                                                              |   | $                       | 30,662  |   |   | $ | 57,350 |   |
| Total gains (losses) included in operating revenues                              |   |                    |    |   |   |   |   |   |
|     attributable to the change in unrealized gains or losses |   |                    |    |   |   |   |   |   |
|     related to assets still held at the end of the period    |   | $                       | (6      | ) |   | $ | (4 | ) |

|                                                                                      |   |                    |   |   |               |   |   | Period from       |   |
|-------------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|--------------------|--------|--------|-------------------|--------|
|                                                                                      |   | Year Ended December 31, |   |   | January 8, 2007 to |   |
|                                                                                      |   | 2009                    |   |   | 2008               |   |   | December 31, 2007 |   |
|                                                                                      |   | (In thousands)          |   |
|                                                                                      |   |                    |   |   |               |   |   |              |   |
|           Current state income tax                |   | $                       | 162    |   |               | $      | 99     |              |   | $ | - |   |
|           Deferred state income tax (benefit)     |   |                    | (323   | )      |               |   | (187   | )                 |   |   | 434 |   |
|                                                                                      |   |                    |   |   |               |   |   |              |   |   |   |   |
|                                                                                      |   |                    |   |   |               |   |   |              |   |   |   |   |
|           Total income tax expense (benefit) |   | $                       | (161   | )      |               | $      | (88    | )                 |   | $ | 434 |   |

----

|                                |   | December 31,   |   |
|-------------------------------------|--------|----------------|--------|
|                                |   | 2009           |   |   | 2008 |   |
|                                |   | (In thousands) |   |
| Deferred Tax Assets:                |   |           |   |   |   |   |
|    Accounts receivable    |   | $              | 21     |   |   | $ | 17 |   |
|    Intangible assets      |   |           | 65     |   |   |   | - |   |
|    Inventory              |   |           | 589    |   |   |   | 121 |   |
|    Contract liability     |   |           | 27     |   |   |   | 155 |   |
|    Other                  |   |           | 11     |   |   |   | 12 |   |
| Total deferred tax assets           |   |           | 713    |   |   |   | 305 |   |
|                                |   |           |   |   |   |   |   |   |
| Deferred Tax Liabilities:           |   |           |   |   |   |   |   |   |
|    Derivative instruments |   |           | (298   | ) |   |   | (685 | ) |
|    Plant in service       |   |           | (1,674 | ) |   |   | (1,439 | ) |
|    Other                  |   |           | (27    | ) |   |   | (111 | ) |
| Total deferred tax liabilities      |   |           | (1,999 | ) |   |   | (2,235 | ) |
|                                |   |           |   |   |   |   |   |   |
| Net deferred taxes                  |   | $              | (1,286 | ) |   | $ | (1,930 | ) |

|                               |   | December 31,   |   |
|------------------------------------|--------|----------------|--------|
|                               |   | 2009           |   |   | 2008 |   |
|                               |   | (In thousands) |   |
| Current deferred tax asset         |   | $              | 123    |   |   | $ | 154 |   |
| Non-current deferred tax asset     |   |           | 591    |   |   |   | 151 |   |
| Current deferred tax liability     |   |           | (326   | ) |   |   | (795 | ) |
| Non-current deferred tax liability |   |           | (1,674 | ) |   |   | (1,440 | ) |
|                               |   |           |   |   |   |   |   |   |
| Net deferred taxes                 |   | $              | (1,286 | ) |   | $ | (1,930 | ) |

|                                                                     | Year EndedDecember 31, 2009 |   |
|--------------------------------------------------------------------------|-----------------------------|--------|
|                                                                     | (In thousands)              |   |
|                                                                     |                        |   |   |
| Net change in deferred income tax liability per above table              |                        | $      | (644 | ) |
| Tax effect of change in fair market value of designated cash flow hedges |                        |   | 321 |   |
|                                                                     |                        |   |   |   |
| Deferred income tax benefit                                              |                        | $      | (323 | ) |

----

|                                                                        |   |           |    |   |            |   |    | Period from          |   |
|-----------------------------------------------------------------------------|--------|----------------|---------|--------|-----------------|--------|---------|----------------------|--------|
|                                                                        |   | December 31,   |    |   | January 8, 2007 |   |
|                                                                        |   | 2009           |    |   | 2008            |   |    | to December 31, 2007 |   |
|                                                                        |   | (In thousands) |    |
| Beginning AOCI                                                              |   | $              | 62,184  |   |            | $      | 18,204  |                 |   | $ | - |   |
|    Balance from Optim Energy Generation contribution              |   |           | -       |   |            |   | -       |                 |   |   | (6,326 | ) |
|    Change in fair market value of designated cash flow hedges     |   |           | 38,860  |   |            |   | 68,780  |                 |   |   | 26,121 |   |
|    Reclassification adjustment for (gain) on designated cash      |   |           |    |   |            |   |    |                 |   |   |   |   |
|        flow hedges included in net earnings (loss) |   |           | (70,680 | )      |            |   | (24,800 | )                    |   |   | (1,591 | ) |
| Ending AOCI                                                                 |   | $              | 30,364  |   |            | $      | 62,184  |                 |   | $ | 18,204 |   |

----

----

----