A P R I L   2 0 0 8

I M G A   B O A R D   M E E T I N G

Prepayment market update

S T

 R I 

C T

 L Y

   P R

 I V A

 T E

   A N

 D   

C O

 N F

 I D E

 N T

 I A L

I M G A

This presentation was prepared exclusively for the benefit and internal use of the JPMorgan client to whom it is directly addressed and delivered (including such client’s subsidiaries, the “Client”) in order to assist the Corporation in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by JPMorgan. Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of JPMorgan.

The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views as of this date, all of which are accordingly subject to change. JPMorgan’s opinions and estimates constitute JPMorgan’s judgment and should be regarded as indicative, preliminary and for illustrative purposes only. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Client or which was otherwise reviewed by us. In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of the Client or any other entity. JPMorgan makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects.

Notwithstanding anything herein to the contrary, the Client and each of its employees, representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Client relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to the Client by JPMorgan.

JPMorgan’s policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a rating or price target, to a subject Client as consideration or inducement for the receipt of business or for compensation. JPMorgan also prohibits its research analysts from being compensated for involvement in investment banking transactions except to the extent that such participation is intended to benefit investors.

IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

JPMorgan is a marketing name for investment banking businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan arranging, financial advisory and other investment banking activities are performed by a combination of J.P. Morgan Securities Inc., J.P. Morgan plc, J.P. Morgan Securities Ltd. and the appropriately licensed subsidiaries of JPMorgan Chase & Co. in Asia-Pacific, and lending, derivatives and other commercial banking activities are performed by JPMorgan Chase Bank, N.A. JPMorgan deal team members may be employees of any of the foregoing entities.

This presentation does not constitute a commitment by any JPMorgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services.

I M G

 A   

B O

 A R

 D   

M E

 E T

 I N G

Agenda

Page

I M G A

Outlook for 2008

Market environment

Background

1

1

6

13

I M G

 A   

B O

 A R

 D   

M E

 E T

 I N G

I M G A

Prepayments completed ($millions)Prepayments completed ($millions)

Energy prepayments began in the 1990s, but interest has surged in the last 24 months

207 174 398749 660

1,698

775

10,676

9,462

1,049

Pre-1995 1996 1997 1998 1999 2000-2003 2003 2004 2005 2006 2007 2008*

Treasury Review

No energy prepayments completed

*Projects completed 2008 YTD

2B A

 C K

 G R

 O U

 N D

I M G A

Total = 1800 Bcf

How much gas has been prepaid?

Municipal utilities use approximately 1800 Bcf of natural gas a year1

Public gas utilities 1200 Bcf/year Public electric utilities 600

Bcf/year

For deals completed in 2006 and 2007, prepaid gas volumes average approximately 330 Bcf/year through 2015, or 19% of total load per annum

Municipal Utilities’ Annual Load ProfilesMunicipal Utilities’ Annual Load Profiles Prepaid Volumes Comprise 19% of Total Load Prepaid Volumes Comprise 19% of Total Load

¹Source: Energy Information Administration

Total = 1800 Bcf

3B A

 C K

 G R

 O U

 N D

I M G A

Natural gas prepayments in 2007

Feb Apr Jun Aug Oct

Main Street$528$527

Main Street$528$527

Southeast

Alabama$907

Southeast

Alabama$907

Lower Alabama

$383

Lower Alabama

$383

Salt River

$1,159

Salt River

$1,159

Roseville

$198

Roseville

$198

Long Beach$886

Long Beach$886

PEAK$451PEAK$451

Main Street$497

Main Street$497

Indiana Bond Bank$309

Indiana Bond Bank$309

TX GAS$1,934

TX GAS$1,934

San Antonio CPS$644

San Antonio CPS$644

SCCPA

$500

SCCPA

$500

SMUD

$758

SMUD

$758

Market highlightsMarket highlights

15 gas prepayments executed in 2007 - $10.2 billion

10 gas prepayments executed in 2006 - $9.6 billion

JPMorgan led the market with $2.2 billion in 2007

Denotes JPMorgan involvement as senior manager, gas supplier, commodity swap counterparty or credit provider

Jan Mar May Jul Sep Nov Dec

Central Plains$529

Central Plains$529

4B A

 C K

 G R

 O U

 N D

I M G A

Gas

Prepayment

Debt

Serv

ice

Bond

Pro

ceeds

Fixe

dPa

ymen

tFl

oatin

gPa

ymen

tFixed

Payment

Floating

Payment

JPMorgan Ventures

Tennergy

MunicipalBondholders

JPMorganChase & Co. Guaranty

12

3

Review of Tennergy project mechanics

IMGA andother participants

Gas

Index gasminus discount

4

BP NorthAmerica

3

2 6Commodity Swap: Tennergy and JPMVEC execute matched gas swaps with BP North America to convert pricing from fixed to a floating Index

Guaranty: JPMorgan Chase & Co. unconditionally guarantees JPMVEC’s financial obligations to Tennergy

Gas Purchase Agreement: Tennergy pays JPMorgan Ventures (JPMVEC) upfront for a 20 year supply of firm natural gas

Bond issuance: To finance the prepayment, Tennergy sells tax-exempt debt secured only by revenues from the project, non-recourse to the Participants

Gas Supply Agreement: Tennergy delivers daily gas volumes to IMGA and the other participants in exchange for a floating Index price less a discount and annual refund

1

Flo

ati

ng

Paym

ent

Gas

BP Energy

6

4Source of gas: JPMVEC enters into a 20 year physical natural gas supply contract with BP Energy

Annual Refund

5

5

5B A

 C K

 G R

 O U

 N D

Agenda

Page

I M G A

Outlook for 2008

Market environment

Background

6

1

6

13

I M G

 A   

B O

 A R

 D   

M E

 E T

 I N G

I M G A

Prepayments depend of several value drivers

Increase in interest rates should produce greater savings

MMD/LIBOR relationship is at its lowest since June 2003 As spread widens, prepayment savings will increase

Interest Rates

Tenor

Longer prepayments typically result in greater savings by capturing more of the taxable vs. tax-exempt differential

Savings are not always linear

Natural Gas Prices

Absolute levels could be higher but stability has been helpful Higher gas prices increase the value of a prepayment

Shape of forward curve could be more contango Lower near-term pricing and less backwardation will

support prepayment savings

Prepaid Gas

Volumes

Seasonal sculpting can increase savings

Increasing prepaid volume later in the project will also improve savings (backloading)

Credit Markets

Tax-exempt prepayment bond spreads are likely to remain wide

Subprime exposure has pushed supplier credit spreads wider and even resulted in credit rating downgrades for some

?

?

?

7M A

 R K

 E T

   E N

 V I 

R O

 N M

 E N

 T

I M G A

High interest rate environment is generally more favorable

Spread between taxable and tax-exempt rates is a primary value driver Historically, the spread between tax-exempt and taxable rates widens as rates rise Wider tax-exempt/taxable spreads, or a lower MMD/LIBOR ratio, improves project

savings

Market movements have been severe in 2008, but have recently improved

3%

4%

5%

6%

Dec-05 Feb-06 Apr-06 J ul-06 Sep-06 Nov-06 J an-07 Mar-07 May-07 J ul-07 Sep-07 Dec-07 Feb-08 Apr-08

0

20

40

60

80

100

120

140

160

180

200

10-year LIBOR 10-year MMD MMD-LIBOR Spread

Historical 10-year AAA MMD vs. 10-year LIBOR1Historical 10-year AAA MMD vs. 10-year LIBOR1

MMD & LIBOR Rates LIBOR/MMD Spreads

1Reflects market conditions as of April 21, 2008

Optimal environment: High rates and high spread between MMD and LIBOR

8M A

 R K

 E T

   E N

 V I 

R O

 N M

 E N

 T

I M G A

Ultimately, it is the combination of interest rates and credit spreads that are a key factor

Illustration - Taxable funding levels vs. tax-exempt prepayment pricingIllustration - Taxable funding levels vs. tax-exempt prepayment pricing

Gas supplier’s cost of capital is a function of LIBOR plus a specific credit spread

Municipal issuer’s cost of capital is a function of MMD plus a specific credit spread

Gas Supplier Municipal Issuer

LIBOR

Credit Spread

MMD

Credit Spread

Prepayment Value

VS.

9M A

 R K

 E T

   E N

 V I 

R O

 N M

 E N

 T

I M G A

Gas suppliers’ credit spreads have increased sharply since August 2007

As financial institutions have taken over $206 billion of write-downs on their exposure to subprime mortgages

These write-downs created anxiety among investors and, in part, led to investors demanding increased credit spreads

Source: The Wall Street Journal, 01/18/08

5Y Credit default swap spreads (bps)

Source: JPMorgan DataQuery, as of April 15, 2008

0

40

80

120

160

200

240

280

320

360

Feb-07 Apr-07 J un-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08

J PMorgan (Aa2/ AA-/ AA-)

Bank of America (Aa1/ AA/ AA)

Citigroup (Aa3/ AA-/ AA)

Goldman Sachs (Aa3/ AA-/ AA-)

Merrill Lynch (A1/ A+/ A+)

10M A

 R K

 E T

   E N

 V I 

R O

 N M

 E N

 T

I M G A

As supplier credit spreads have increased, so have credit spreads for prepayment bonds

Source: JPMorgan DataQuery, as of April 15, 2008. Spreads to MMD.

10Y MMD vs. the spreads of prepayment bonds10Y MMD vs. the spreads of prepayment bonds

Spreads (bps)

MMD Rates

Prepayment bond ratings are based primarily on gas supplier’s credit

Prepayment bond credit spreads in some cases have increased more on a percentage basis than gas suppliers credit spreads have increased

11M A

 R K

 E T

   E N

 V I 

R O

 N M

 E N

 T

I M G A

NYMEX natural gas curve as of April 23, 2008NYMEX natural gas curve as of April 23, 2008

Gas market dynamics appear stable

The stability in gas prices, especially compared to the rates and credit markets, has been conducive to the execution of prepayments

A gas curve that is more contango would create more savings Natural gas prices are notoriously unpredictable due to their correlation with

weather

*JPMorgan forecast as of March 10, 2008

12M A

 R K

 E T

   E N

 V I 

R O

 N M

 E N

 T

Agenda

Page

I M G A

Outlook for 2008

Market environment

Background

13

1

6

13

I M G

 A   

B O

 A R

 D   

M E

 E T

 I N G

I M G A

Outlook for balance of 2008?

Taxablevs

Tax-Exempt Rates

Tax-ExemptPrepayment

Bond Spreads

Gas Supplier’sCost of Capital

Investor Demandand

Market Access

Alternative FundingStructures

Absolute Level ofInterest Rates

14O U

 T L

 O O

 K   

F O R

   2 0

 0 8

I M G A

Interest rates expected to trend slightly higher

Interest Rate Forecast (%)Interest Rate Forecast (%)

Economic Data1 (%ch q/q, saar, unless otherwise noted)Economic Data1 (%ch q/q, saar, unless otherwise noted)

1 Data as of 4/18/2008* Q4/Q4 change

04/18/08 06/30/08 09/30/08 12/31/08 03/31/09

Q2 Q3 Q4 Q1

Security Current Forecast Forecast Forecast Forecast

Fed Funds Target 2.25 1.75 1.75 1.75 1.75

3-Month LIBOR 2.91 2.15 1.95 2.00 2.15

3-Month T-bill 1.35 0.90 0.85 1.05 1.20

2-Year T-note 2.17 1.50 1.80 1.90 2.00

5-Year T-note 2.95 2.65 3.00 3.05 3.15

10-Year T-note 3.74 3.80 4.05 4.10 4.15

30-Year T-bond 4.52 4.65 4.85 4.90 4.90

Source: J PMorgan, MorganMarkets.

JPMorgan economic forecast

15O U

 T L

 O O

 K   

F O R

   2 0

 0 8

I M G A

Supplier credit spreads have shown some improvement

5Y Credit default swap spreads (bps)

Source: JPMorgan DataQuery, as of April 15, 2008

0

40

80

120

160

200

240

280

320

360

Oct-07 Dec-07 J an-08 Apr-08

J PMorgan (Aa2/ AA-/ AA-)

Bank of America (Aa1/ AA/ AA)

Citigroup (Aa3/ AA-/ AA)

Goldman Sachs (Aa3/ AA-/ AA-)

Merrill Lynch (A1/ A+/ A+)

16O U

 T L

 O O

 K   

F O R

   2 0

 0 8

I M G A

The MMD/LIBOR relationship has rebounded from extreme levels

The spread on 10 year MMD vs. 10 year LIBOR bottomed at just 11 basis points from a high of nearly 170 basis points on July 6th , it has since rebounded by approximately 60 basis points

Though the future is uncertain, market movement in recent weeks is encouraging

3.00%

3.25%

3.50%

3.75%

4.00%

4.25%

4.50%

4.75%

5.00%

4-J an 11-J an 18-J an 25-J an 1-Feb 8-Feb 15-Feb 22-Feb 29-Feb 7-Mar 14-Mar 21-Mar 28-Mar 4-Apr 11-Apr

0

20

40

60

80

100

120

10-year LIBOR 10-year MMD MMD-LIBOR Spread

2008 10-year AAA MMD vs. 10-year LIBOR12008 10-year AAA MMD vs. 10-year LIBOR1

MMD & LIBOR Rates LIBOR/MMD Spreads

1Reflects market conditions as of April 15, 2008

Low of 11 bps

17O U

 T L

 O O

 K   

F O R

   2 0

 0 8

I M G A

What does this mean for prepayments?

Potential for continued market improvement and project execution MMD vs. LIBOR spread Supplier credit spreads Prepayment bond spreads

Is investor demand returning to the fixed rate bond market? Long term market seeing some strength Size constraints improving

Can additional projects get done with variable rate financing structure? Credit availability Prepaid supplier funding considerations Additional termination events

Prepayment market depends on future market technicals and economic news Municipal market supply/demand Tax-exempt vs. taxable ratios News/earnings reports for investment banks/commercial banks Overall credit cycle

18O U

 T L

 O O

 K   

F O R

   2 0

 0 8

I M G A

Tennergy project team

• Lance Etcheverry – 214-965-3722lance.s.etcheverry@jpmorgan.com

• Melissa Houskamp – 904-305-4888melissa.l.houskamp@jpmorgan.com

• Robert Servas – 212-834-7155

robert.c.servas@jpmorgan.com

McKee NelsonMcKee Nelson

• Doug Bird – 917-777-4666dbird@mckeenelson.com

JPMorgan Ventures EnergyJPMorgan Ventures Energy

• Chris Calger – 212-834-2036christopher.f.calger@jpmorgan.com

• Mark Lenczowski – 212-648-0285mark.lenczowski@jpmorgan.com

J.P. Morgan Securities Inc.J.P. Morgan Securities Inc. BP Corporation North AmericaBP Corporation North America

• Troy Black – 281-366-4733troy.black@bp.com

• Don Black – 281-366-6993donald.black@bp.com

Bass, Berry & SimsBass, Berry & Sims

• Mark Mamantov – 865-521-0365mmamantov@bassberry.com

• Russ Miller – 615-742-7778rmiller@bassberry.com

Tennergy CorporationTennergy Corporation

• Philip Bell – 731-422-7212pbell@tennergy.com

• Mechele Williams – 731-422-7254 mwilliams@tennergy.com

Hunton & WilliamsHunton & Williams

• Darrell Smelcer – 404-888-4209dsmelcer@hunton.com

• Lynn Gavin – 404-888-4273lgavin@hunton.com

19O U

 T L

 O O

 K   

F O R

   2 0

 0 8