TXU Energy

1. …Enabled By a Streamlined IVR • From: • A complex design • To: • A streamlined design Play outage message or directed to CCA queue; ASA 15 seconds Ways to pay menu Billing menu TXU Energy Is The Largest Competitive Retailer In AGrowth Market TXU Energy Is Focused On Achieving A Distinctive Customer Experience Electric IVR 2.2.1 Account 2.1 Account main menu balance balance 2.2.2 Payment 1 2.2 Ways 1.0 Outage locations to Pay 2.2.3 Mail 2.3 Make time to Pay* 2.0 Billing 100 2 Directed to CCA 2.4 Other queue; ASA 15 seconds • Large competitive customer base • 03; Millions of customers High growth 03-12E; Percent annual demand growth 100 Existing 3.0 Existing 3 • Description service menu service Reconnect IVR 3.1 Re - connect 3.2 Stop or Directed to CCA 4 4.0 New move queue; ASA • Access • The speed in which the customer can access TXU help (can be a human or an automated system) service services 15 seconds 100 100 Directed to CCA queue, ASA 15 seconds • Interaction • The quality of the help (friendly and knowledgeable) • Customer experience TXU RRI CPL/WTU/ Direct Energy First Choice Green Mountain ERCOT SERC WECC MAAC MAIN FRCC ECAR MAPP SPP NPCC • Problem • Resolution • The frequency in which the issue is resolved to the customer’s satisfaction on the first try Source: KEMA Source: NERC • User friendly voice recognition will further enhance the IVR • Highly competitive market • 02-04; Number of certified ERCOT retailers • North Texas reputation for goodcustomer service • July 04; Percent • Competitive switch rate • Transaction • How often TXU delivers what was promised (on time hookups, accurate bills, etc.) • Feedback loop • Perception of price/value • The customer’s assessment of the price and value of TXU relative to its competitors TXU Company A CompanyB CompanyC 1 2 Source: PUC Our Goal Is To Deliver World Class Customer Access… • Average time to reach call representative • 04; Seconds • 263 • 195 • 151 • 141 • Average speed of answer • 100 • 77 • Time in Interactive Voice Response • Recent • Planned • ERCOT competitor A • ERCOT competitor B • Baby Bell telephone company • Leading financial services company • TXU 3 4 Source: Competitive research 1,620 phone calls to five companies between August 12-14, 2004 TXU Energy

2. …Improved Customer Service Has Had A Positive Impact On Customer Churn… • Access Customer churn 02-04; Percent of customers • ASA, seconds • IVR transit time, seconds • Service level, X% within Y seconds • ASA, seconds In-territory residential • Interaction • Satisfaction with CCA, % • Satisfaction with IVR, % • Customer satisfaction with CCA, % • Customer satisfaction with IVR, % • Web customer satisfaction, % We Are Measuring Our Service Performance Through A More Robust Scorecard… • Problem • Resolution • Customer-reported FCR, % • Customer-reported FCR, % • CCA QA First Call Resolution, % • Repeat call within 24 hours, % • 03 Scorecard • 04 Scorecard • None • Satisfaction with bill accuracy, % • Web transaction rate, % • Delivery “late rate”, % • Transaction 02 03 YTD 04 In-territory small and medium business • Overall satisfaction with recentcall, % • Overall satisfaction with TXUE, % • Satisfaction with value-price offer, % • Customer loyalty to TXU, % • Overall 02 03 YTD 04 • Despite aggressive competitive activity, churn has been significantly reduced • CapGemini Energy contract ensures alignment with performanceexpectations and 2004 indicators 5 6 • Operational EPS03-05; $ per share • EBITDA103-05; $ millions >1000% 357% • 03 • 04E • 05E • 03 • 04E • 05E 7 8 TXU Energy 29% 82% …And We Will Focus On Profitable Out Of Territory Growth These Initiatives Are Improving Energy’sFinancial Performance • Significant out of territory opportunities remain… • …Captured by an integrated planof attack • Profitably serve larger class of customers: • Prepaid products for credit challenged customers • Tighter enforcement of existing collection policies • Disconnect rights • Improve customer targeting and acquisition effectiveness • Improve business model to lower costs to serve: • Capture scale benefits from CapGemini Energy contract • Base decisions upon true marginal costs • Out of territory estimated market share04-06; Percent 1Results are from continuing operations excluding special items