Energy East Corporation Announces Second Quarter 2008 Financial Results

PORTLAND, Maine, July 31 /PRNewswire-FirstCall/ — Energy East Corporation today announced its second quarter financial results. Earnings per basic share for the second quarter 2008 were 10 cents compared to 12 cents per share earned in the second quarter 2007.

For the 12 months ended June 30, 2008, earnings per basic share were $1.56 compared with $1.68 per share for the 12 months ended June 30, 2007.

Earnings per basic share for the second quarter of 2008 were 2 cents lower than second quarter 2007 earnings of 12 cents per share. Results for the quarter included a charge of two cents per share resulting from provisions of Central Maine Power Company (CMP)’s new rate plan which was approved by the Maine Public Utilities Commission in June 2008. As part of this rate plan, CMP was required to write off $5.2 million in previously deferred costs, including $4.1 million in storm costs.

Merger Update

To date, all regulatory approvals have been received for Energy East’s acquisition by Iberdrola with the exception of approval from the New York State Public Service Commission (NYPSC). The New York merger approval proceeding culminated in early July with the submittal of Briefs Opposing Exceptions to the Administrative Law Judge’s recommended decision, and Energy East and Iberdrola are awaiting a NYPSC decision. Energy East is currently unable to predict either the outcome of this proceeding or the timing of a NYPSC decision.

Unaudited Consolidated Statements of Income and Energy Distribution and Weather Statistics are presented on the following pages.

In addition, Energy East today filed its Form 10-Q with the Securities and Exchange Commission. The document contains additional details regarding second quarter 2008 financial results and is available on Energy East’s website: http://www.energyeast.com/. Shareholders may obtain a free copy of our Form 10-Q by contacting Investor Relations at (207) 688-4386.

Forward Looking Statement:

This communication contains forward-looking information and statements about Energy East. Forward-looking statements are statements that are not historical facts. These statements may include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words “expects,”"anticipates,”"believes,”"intends,”"estimates” and similar expressions. Although the management of Energy East Corporation believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of Energy East Corporation shares are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Energy East Corporation, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward- looking information and statements. These risks and uncertainties include those discussed or identified in the public documents sent by Energy East to their regulators and under “Risk Factors” in their annual and quarterly reports filed with the SEC. Except as required by applicable law, Energy East undertakes no obligation to update any forward-looking information or statements.

About Energy East:

Energy East is a respected super-regional energy services and delivery company serving about 3 million customers throughout upstate New York and New England. By providing outstanding customer service and meeting customers’ energy requirements in an environmentally friendly manner, Energy East will continue to be a valuable asset to the communities we serve.

                          Energy East Corporation              Consolidated Statements of Income – (Unaudited)                                    Three Months            Twelve Months   Period Ended June 30,         2008        2007        2008         2007    (Thousands, except    per share amounts)    Operating Revenues       Utility                $957,915    $977,006   $4,581,291   $4,718,605       Other                   124,361     112,020      542,979      506,387          Total Operating          Revenues           1,082,276   1,089,026    5,124,270    5,224,992    Operating Expenses     Electricity purchased      and fuel used in generation       Utility                 317,416     351,412    1,360,625    1,472,205       Other                    96,490      85,164      379,193      353,791     Natural gas purchased       Utility                 195,634     174,232    1,145,871    1,110,286       Other                    14,189      12,120       91,456       80,632     Other operating expenses  199,936     203,503      841,178      801,295     Maintenance                43,769      48,809      165,691      216,855     Depreciation and      amortization              69,513      68,273      278,433      280,176     Other taxes                61,451      58,787     260,806       252,204          Total Operating          Expenses             998,398   1,002,300    4,523,253    4,567,444    Operating Income             83,878      86,726      601,017      657,548   Other (Income)               (7,426)    (10,752)     (33,100)     (48,523)   Other Deductions              2,577       1,423       10,019       21,085   Interest Charges, Net        69,234      67,855      277,654      291,217   Preferred Stock Dividends    of Subsidiaries                282         282        1,128        1,129    Income Before Income Taxes   19,211      27,918      345,316      392,640   Income Taxes                  4,256       8,427       99,893      141,549    Net Income                  $14,955     $19,491     $245,423     $251,091    Earnings per Share, basic      $.10        $.12        $1.56        $1.68    Earnings per Share, diluted    $.09        $.12        $1.55        $1.67    Dividends Declared per Share   $.31        $.30        $1.23        $1.19    Average Common Shares    Outstanding, basic         157,016     157,112      157,137      149,627    Average Common Shares    Outstanding, diluted       158,299     158,122      158,277      150,500                             Energy East Corporation                Energy Distribution Statistics – (Unaudited)                                 Three Months             Twelve Months   Periods Ended June 30,  2008     2007  % change   2008      2007  % change    Electricity    (thousands of      megawatt-hours)      Residential         2,648     2,784    (5%)   12,257    12,428    (1%)      Commercial          2,351     2,470    (5%)    9,892     9,887     –       Industrial          1,857     1,945    (5%)    7,337     7,167     2%      Other                 564       545     3%     2,338     2,249     4%         Total retail      7,420     7,744    (4%)   31,824    31,731     –          Wholesale       1,005     1,783   (44%)    5,836     8,050   (28%)    Total Deliveries       8,425     9,527   (12%)   37,660    39,781    (5%)    Natural Gas    (thousands of dekatherms)      Residential         9,901    11,493   (14%)   74,110    75,846    (2%)      Commercial          3,439     4,234   (19%)   24,397    25,567    (5%)      Industrial            486       539   (10%)    3,495     3,564    (2%)      Other               2,692     2,698     –     13,025    13,494    (3%)      Transportation of       customer-owned       gas               16,927    16,885     –     79,315    77,955     2%         Total retail     33,445    35,849    (7%)  194,342   196,426    (1%)          Wholesale          86       267   (68%)    1,777       638   179%         Total         Deliveries      33,531    36,116    (7%)  196,119   197,064     –                             Energy East Corporation                      Weather Statistics – (Unaudited)    Three Months Ended June 30,              2008       2007      Normal    New York   Heating degree days                       806        910        957    (Warmer) than prior year                 (11%)    (Warmer) than normal                     (16%)    New England   Heating degree days                       731        824        835    (Warmer) than prior year                 (11%)    (Warmer) than normal                     (12%)  

Energy East Corporation

CONTACT: Energy East Corporation, Investor Relations, +1-207-688-4386

Web site: http://www.energyeast.com/