In October 2000, Mary Watts, the chief financial officer of Pacific Northwest Electric (PNW), a utility servicing the Pacific Northwest Region of the United States, reviewed the financial plan for PNW’s 2000-2001 forthcoming winter season. Winter temperatures affected the firm’s revenues: the colder the season, the greater the electricity usage. She recalled that the last few years had offered a warmer-than-average winter climate, resulting in adverse financial results for PNW. The weather, combined with rapid deregulation in PNW’s market area, meant that the firm reported substantially no EPS growth from 1995 to 1999, in an otherwise buoyant economic setting. PNW’s stock price had suffered accordingly. On her desk was a report from a weather advisory service predicting another unseasonably warm winter.