1. TXU Energy Is Focused On Achieving A Distinctive Customer Experience Competitive switch rate Customer experience Perception of price/value Description The speed in which the customer can access TXU help (can be a human or an automated system) Feedback loop Access Interaction Problem Resolution Transaction The quality of the help (friendly and knowledgeable) The frequency in which the issue is resolved to the customer’s satisfaction on the first try How often TXU delivers what was promised (on time hookups, accurate bills, etc.) The customer’s assessment of the price and value of TXU relative to its competitors TXU Energy Is The Largest Competitive Retailer In A Growth Market Large competitive customer base 03; Millions of customers TXU Highly competitive market 02-04; Number of certified ERCOT retailers North Texas reputation for good customer service July 04; Percent TXU High growth 03-12E; Percent annual demand growth ERCOT FRCC SERC ECAR WECC MAPP MAAC SPP MAIN NPCC Source: KEMA RRICPL/ WTU/ Direct Energy First Choice Green Mountain Source: NERC Source: PUC Company A Company B Company C TXU Energy 12 34 …Enabled By a Streamlined IVR From: A complex design To: A streamlined design User friendly voice recognition will further enhance the IVR Reconnect IVR 1.0 Outage Electric IVR main menu 2.0 Billing 3.0 Existing service 4.0 New service Play outage message or directed to CCA queue; ASA 15 seconds Directed to CCA queue, ASA 15 seconds 100 Billing menu 2.1 Account balance 2.2 Ways to Pay 2.3 Make time to Pay* 2.4 Other 100 Existing service menu 3.1 Re- connect 3.2 Stop or move services 100 Ways to pay menu 2.2.1 Account balance 100 2.2.2 Payment locations 2.2.3 Mail Directed to CCA queue; ASA 15 seconds Directed to CCA queue; ASA 15 seconds 4 3 2 1 Our Goal Is To Deliver World Class Customer Access… Average time to reach call representative 04; Seconds Average speed of answer Time in Interactive Voice Response RecentERCOT competitor A Planned 141 151 263 195 100 77 TXU ERCOT competitor B Baby Bell telephone company Leading financial services company Source: Competitive research 1,620 phone calls to five companies between August 12-14, 2004

2. Customer churn 02-04; Percent of customers In-territory small and medium business In-territory residential Despite aggressive competitive activity, churn has been significantly reduced 0203YTD 04 0203YTD 04 …Improved Customer Service Has Had A Positive Impact On Customer Churn… …And We Will Focus On Profitable Out Of Territory Growth Significant out of territory opportunities remain… …Captured by an integrated plan of attack Out of territory estimated market share 04-06; Percent  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 These Initiatives Are Improving Energy’s Financial Performance We Are Measuring Our Service Performance Through A More Robust Scorecard… 04 Scorecard Access Interaction Problem Resolution Transaction 03 Scorecard IVR transit time, seconds Service level, X% within Y seconds ASA, seconds Customer-reported FCR, % CCA QA First Call Resolution, % Repeat call within 24 hours, % Customer-reported FCR, % Customer satisfaction with CCA, % Customer satisfaction with IVR, % Web customer satisfaction, % Satisfaction with CCA, % Satisfaction with IVR, % Satisfaction with bill accuracy, % Web transaction rate, % Delivery “late rate”, % None Overall Overall satisfaction with TXUE, % Satisfaction with value-price offer, % Customer loyalty to TXU, % Overall satisfaction with recent call, % CapGemini Energy contract ensures alignment with performance expectations and 2004 indicators TXU Energy 56 78 29% 82% Operational EPS 03-05; $ per share EBITDA 1 03-05; $ millions 357% 04E05E03 >1000% 04E05E03 1 Results are from continuing operations excluding special items