Capital Ratios

Cal-Ore's capital ratios as of June 30, 2001, submitted as supplemental information to the Application, are presented below as recorded and adjusted to give pro forma effect to the proposed $6.7 million loan and estimated retained earnings of $1.2 million for years 2002 through 2004:

Recorded Pro Forma

($000) % ($000) %

Long-Term Debt 3,236 29.3 9,936 52.4

Common Equity 7,815 70.7 9,015 47.6

Total Capitalization 11,051 100.0 18,951 100.0

Capital structures are normally subject to review in cost of capital or general rate case proceedings. We will not, therefore, make a finding in this decision of the reasonableness of the projected capital ratios for ratemaking purposes.