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Five analysts and top management from fifteen sector firms examine the energy sector in this special 70-page Energy issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info461.htm.

TWST: Are there any emerging technologies coming down the road that potentially could do that?

Mr. McAtee: We think so. If you look at a fuel cell system, there are three major components. First is the fuel cell stack itself. The second is where you get the hydrogen to run the fuel cell. And the third is the balance of plant — the power conditioning, how all of the gas that comes in is controlled and the water that is produced is controlled. So we look at those three segments. On the fuel cell side itself, we are looking for companies that make better membranes. They are making progress, but I’m not sure that there is any investment there because they are divisions of larger companies. Another issue that we’re focused on is where they get the hydrogen from. That’s one of the key issues we look at when we evaluate different fuel cell companies — how they are getting the hydrogen to run their fuel cell.

TWST: Neal, for the most part, which are the companies, who are the customers for the distributed power suppliers?

Mr. McAtee: At this point, the customers are primarily those who need clean energy and dependable energy. And when I say clean, I don’t necessarily mean green. What I mean by clean is very few voltage spikes, a very clean power curve. The best markets are the uninterruptible power supply (UPS) and continuous power supply markets.

TWST: Give me an example of companies who use this.

Mr. McAtee: A cell phone tower is powered by electricity. If the grid goes down, there needs to be instantaneous backup power. A credit card processing center is processing credit card transactions 24 hours a day, seven days a week. If that were to go down —

TWST: As they did on September 11 in New York.

Mr. McAtee: I think that’s an extreme case. I would summarize it this way. The utility grid is 99.9% dependable. But if you do the math, that means it’s down eight hours a year. For you and me at home, so what if our refrigerator is down an hour a day for eight days? But then you have to consider what this would mean to an airline reservation center, a credit card operation or even a brokerage firm. If a brokerage firm were down for two hours because the utility had an issue, one would be talking about losing at least 10 million over a couple of hours. Or think about Amazon.com or eBay going down — if they went down for eight hours, that would be a great deal of lost revenue. So the people who are paying for these types of technologies right now are the ones who need six or seven “nines” of reliability. They can only afford to be down between a second and 30 seconds a year.

TWST: Let’s say we have an investor who wants to have exposure to the group. Where does that investor start?

Mr. McAtee: We need to go back and look at the criteria that I laid out. First, I would look at Millennium Cell (Nasdaq:MCEL). Another company in the fuel cell arena is Avista Labs, which is a subsidiary of Avista Corporation (NYSE:AVA). Avista has designed a work-around for an existing technological hurdle for the fuel cell stack’s reliability, which is the longevity of the membrane. In addition, the company is working on processor technology with the Chicago-based company H2fuel. I believe Avista is a leader in one of those criteria we discussed earlier — how the company addresses the basic components of the fuel cell system. In addition, we believe that there is underlying value in Avista Corp.’s traditional utility that is close to the current stock price. As a result, we believe that the current stock price allows investors a lower risk alternative for investing in the fuel cell industry.

1) Outlook for Energy Stocks - In an in-depth (9,000 words) Analyst Interview, Arthur L. Smith, Chairman and CEO, Christopher W. Sheehan, Senior Vice President, Robert E. Gillon, Vice President and John B. Parry, Vice President, all at John S. Herold, Inc., examine the outlook for the sector and share specific stock recommendations.

2) Distributed Power Technology - In an in-depth (4,900 words) Analyst Interview, W. Neal McAtee, Managing Director at Morgan Keegan & Company, Inc., examines the outlook for the sector and shares specific stock recommendations.

3) CEO interviews (average 2,500 words). Top management of fifteen sector firms examine the outlook for their firm and the sector.