We have a continuing dialogue with all our stakeholders. Where appropriate, we also track and measure their level of satisfaction.

Shareholders

Our annual reports have been a main tool of communication with our shareholders along with our Annual General Meetings (AGMs). In 2001, to obtain feedback, we canvassed shareholders through a questionnaire on the back of proxy forms sent to all shareholders prior to last year's AGM. The response rate was good with 56,204 questionnaires completed, representing 60% of the proxy forms returned to the Registrars. It also represented a response rate of around 8% of the shareholder base at the time.

The results indicate that environmental and social performance are important for a significantly large proportion of shareholders:

• 77% agree that our environmental and social performance is as important as our economic performance
• 73% agree that our environmental and social performance has the potential to significantly influence our future economic performance
• 55% take into account a company's environmental and social performance when choosing to invest in them.

Investors

We undertake an active programme of contact with institutional investors and brokers and publish information on our website. www.eon-uk.com

Employees

We have a continuing programme of communication with our employees. Our intranet is updated daily with news about the Powergen Group and contains an area for questions. We also update employees via a bi-monthly newspaper and major announcements are communicated to employees by a variety of means, including briefings by line management, letters and emails. Finally, senior management have spelled out strategy at a series of roadshows which have encouraged two-way communication.

In the summer of 2001 we conducted our 8th Employee Opinion Survey which was the first to include employees from LG&E Energy (LG&E). A number of questions addressed aspects of social responsibility. The results showed support for the idea that being an ethical, responsible and caring corporate citizen is important to Powergen's success. Over half of employees also believe that reducing the impact of our operations on the environment is a priority for Powergen.

Customers

We obtain customer satisfaction levels from our own research and also from external organisations, including regulatory agencies. In the US, JD Power and Associates has made a number of top customer satisfaction awards to LG&E Energy over the years. These various results are referred to in more detail in the Marketplace Section of this report.

Government / Regulator

We maintain an active dialogue with Government and energy regulators on both sides of the Atlantic.

Nick Baldwin, Chief Executive until 1st July 2002, also sits on the UK Government Advisory Committee on Business and the Environment (ACBE). The aim of ACBE is to provide for dialogue between Government and business on environmental issues, both of an immediate topical interest and of a longer-term nature. Nick also chairs the steering committee for the UK Climate Change Projects Office.

External bodies

Powergen is represented on, or involved with, a large number of external bodies. These bodies vary from the local to the international in terms of their scope and interests. Our dealings with them are guided by our desire to build stronger stakeholder relations. We aim to communicate our views, share our experiences and to listen and respond to different opinions.

Internationally, Powergen is represented on the World Business Council for Sustainable Development (WBCSD), International Chamber of Commerce (ICC) and Eurelectric - the Union of the European Electricity Industry. Powergen has also been involved with the United Nations, for example with the United Nations Environment Programme (UNEP) and the United Nations Framework Convention on Climate Change (UNFCCC).

Within the UK, Powergen is a member of the Electricity Association, the Association of Electricity Producers and Business in the Community (BiTC), and has links with bodies like the Confederation of British Industry (CBI), National Energy Action (NEA), Age Concern, Shelter and the National Society for Clean Air.

In the US, LG&E has many partnerships with external bodies, including Greater Louisville Inc., the Metro Chamber of Commerce, the Commonwealth of Kentucky and Junior Achievement.