Most utilities are expected to report average earnings gains of 6% to 7% in coming years -- impressive for a supposedly dull industry. Warren Buffett is a fan of the sector, admiring its predictable, if moderate, gains. One of the largest divisions within Buffett's Berkshire Hathaway (BRK-A) is MidAmerican Energy, which owns regulated utilities in Iowa and the Pacific Northwest.

Among the big regulated utilities, Wynne favors PG&E, which serves the northern and central parts of California. Its operations are almost entirely regulated, and its shares trade around 40, or for nearly 13 times projected 2009 profits of $3.16 a share and almost 12 times estimated 2010 earnings of $3.40. Wynne contends that PG&E's profits can expand at an 8% annual clip in the coming years, fueled by capital spending, primarily on new transmission and distribution infrastructure. His price target is 45

A case can be made for most of the major regulated utilities. Con Edison (ED) is low-risk because it is involved mostly in the transmission and distribution of electricity and gas. It is largely out of the power-generation business, and is allowed to pass on changes in purchased-power costs to its New York customers. It yields nearly 6%. Southern historically has had one of the highest P/Es in the group, owing to a favorable regulatory environment and good growth prospects. Its stock has lagged this year, leaving it undervalued.

Southern historically has had one of the highest P/Es in the group, owing to a favorable regulatory environment and good growth prospects. Its stock has lagged this year, leaving it undervalued.

Exelon, with the largest independent power unit fueled by nuclear plants, is a play on carbon legislation. The more onerous the burden on carbon-heavy coal plants, the better the outlook for Exelon's low carbon-emission nuclear plants.

The Dow Jones Utility Average is up about 25% from its March low, roughly half the gain of the S&P 500. But year to date, the utility index is flat, versus the S&P's 15% rise. Stocks such as Southern Co. (SO), American Electric Power (AEP), Entergy (ETR) and Exelon (EXC) are down in 2009.

Citigroup analyst Brian Chin favors American Electric Power, which has one of the group's lowest P/Es. At 30, it trades for less than 11 times projected 2009 profits and yields 5.3%. With operations in the Midwest and Texas, American Electric Power is more exposed to weak industrial markets, and the regulatory environment in Ohio is viewed as difficult. Also, environmentalists and others have stalled construction of a half-finished $1.6 billion coal plant that an American Electric unit is building in Arkansas.

Wynne likes Edison International (EIX), the parent of both Southern California Edison and independent power producer Edison Mission Energy, which owns a group of coal-fired generators. He has called Southern California Edison "perhaps the fastest-growing, most favorably regulated electric utility in the United States." SoCal Edison, which is expected to contribute about 80% of Edison's projected earnings of $3 a share this year, is capable of generating 11% growth in annual profits in the next five years. Wynne values SoCal Edison alone at $33 a share, in line with Edison's current share price. That means that investors effectively get Mission Energy free. Wynne has a price target of 36 on the stock. Edison's profits are expected to fall almost 20% this year, reflecting declining earnings at Mission. If power prices recover, Mission will do better, potentially lifting the stock. It peaked around 60 in 2007.