Energy industry positioned for growth, increase in M&A activity, report says

SAN FRANCISCO, Calif., March 22, 2004 — In sharp contrast to a year ago, the utility sector is likely to see an upswing in mergers and technology expenditures in the coming year, but serious challenges remain for merchant companies, according to the latest Energy & Utilities Project: Positioning For Growth report, the fourth annual volume of thought leadership published by Montgomery Research, Inc. and IBM Business Consulting Services.

Positioning For Growth includes white papers from experts at the U.S. Department of Energy, the California Public Utilities Commission, Standard & Poor’s and IBM Business Consulting Services. It also includes Solution Provider Profiles of leading vendors in the energy and utilities sector, such as ABB, Experian, Indus, Lodestar, MDSI Mobile Data Solutions Inc. and Panasonic Computer Solutions Company.

“This is the ‘Year of Focus’ for energy and utility organizations,” said Machael Valocchi, IBM Business Consulting Services Partner for the Energy & Utility industry. “We are seeing our clients hone their strategies and capitalize on core business, while the regulated side of the industry continues to be at the forefront of market. With increased focus and leveraging growth opportunities these companies will improve responsiveness and in turn, transform their enterprises.”

Among those experts who contributed white papers for the report is Peter N. Rigby, Director of Utilities, Energy, and Project Finance at Standard & Poor’s. Rigby points to the difficult challenges facing merchant energy companies, which are still attempting to recover from the economic downturn nearly two years ago. “In less than a decade, U.S. energy merchant companies have gone from the cradle to the graveside, if not the grave itself,” he wrote.

Other papers are more optimistic, reflecting the report’s theme, “Positioning for Growth.” For example, Larisa Dobriansky, Deputy Assistant Secretary for National Energy Policy at the U.S. Department of Energy, said the current challenges “call for changing the course of world energy development through technology innovation.”

In a white paper by Kevin Genieser, an Executive Director in the Investment Banking Division of Morgan Stanley and a member of the firm’s Global Energy and Utility Group, he highlights a number of factors that predict a return to robust merger and acquisition activity in the utility sector.

“We’re delighted that the fourth annual volume of this project reflects the best and brightest thinking within an industry that has been hard hit by the turmoil of the past three years,” said Nick Smith, Publisher for the project.

About IBM Business Consulting Services

With consultants and professional staff in more than 160 countries globally, IBM Business Consulting Services is the world’s largest consulting services organization. IBM Business Consulting Services provides clients with business process and industry expertise, and the ability to translate that expertise into integrated, adaptive, on demand business solutions that deliver bottom-line business value. For more information, visit www.ibm.com/bcs.

About Montgomery Research

Montgomery Research, Inc. publishes reports that focus on the convergence of business and technology. Montgomery Research works in partnership with e-business visionaries and experts to define industry trends. Find out more about Montgomery Research at mriresearch.com.

To request copies of The Energy and Utilities Project: Positioning For Growth, please call (415) 397-2400 or fill out the subscription form online at www.utilitiesproject.com.