Rumsey Electric Welcomes You

1
Rumsey ElectricWelcomes You
2
Agenda

• 8 AM - PPL
• Raymond Murphy
• ACT129 and planned incentives in the PPL trading
  area
• 9 AM Pennsylvania Department of Environmental
  Protection
• Heather Cowley
• Stimulus programs at the State and Federal level
• Featured Partners Product Highlights
• Dave Hayes
• 10 - AM PECO
• Phil Eastman
• ACT129 and planned incentives in the PECO trading
  area

3
PPL Electric Utilities and Act 129

• Our Piece of the Puzzle

4
Act 129- Background

• Expiration of Pennsylvania generation rate caps
  12/31/09
• House Bill 2200- signed into law as Act 129 on
  October 15, 2008
• Act 129- effective November 14, 2008

5
Act 129 The Focus of Energy Efficiency
Conservation Plan

• Provide customers more choices regarding their
  electricity usage
• Help customers manage their electric consumption
• Reduce the need for new, more costly resource-
  intensive infrastructure

6
Act 129- The Timing

• PPL Electric Utilities filed their Energy
  Efficiency Conservation (EEC) Plan to the PUC
  on 07/01/09
• EEC Plan approval expected by 11/01/09
• Pending plan approval, program implementation
  December 2009- March 2010

7
Act 129- The Requirements

• EEC Plan must be cost-effective and must provide
  equity across customer classes
• The cost of the Plan is capped at an average of
  61.5 million/year -- 2 of 2006 utility revenues
  - 246 million for the 4 year program

8
Act 129- The Requirements

• Costs of the Act 129 Plan will be recovered in
  base rates in future rate cases
• EDC is subject to a penalty of 1 million to 20
  million for not meeting targets

9
Act 129- The Goals

• Goal for 5/31/11
• 1 energy reduction
• 382 million kWh/yr reduction for PPL Electric
  from 2009 forecast
• Average 44 MW for PPL
• Goal for 5/31/13
• 3 energy reduction
• 1.146 billion kWh/yr reduction for PPL Electric
• Average 132 MW for PPL
• 4.5 peak load reduction
• Calculated from the 100 highest summer peak hours
  (June- Sept)
• 297 MW for PPL

10
The Proposed Programs

• PPL Electric Utilities EEC Plan

11
Residential Programs

• Appliance Recycling
• Energy Assessment Weatherization
• ENERGY STAR New Homes
• Energy Efficiency Education Behavior
• Direct Load Control
• Compact Fluorescent Lighting Campaign
• Time of Use Rate
• Renewable Energy Program

12
Low Income Programs

• E Power Wise
• Low-Income WRAP
• Compact Fluorescent Lighting Campaign
• Direct Load Control
• Time of Use Rate

13
Small Commercial Industrial Programs

• Efficient Equipment Incentive
• C I Custom Incentive
• HVAC Tune-up
• Direct Load Control
• Compact Fluorescent Lighting Campaign
• Time of Use Rate

14
Large Commercial Industrial Programs

• Load Curtailment
• C I Custom Incentive
• Efficient Equipment Incentive

15
Governmental/Non-Profit Programs

• C I Custom Incentive
• Direct Load Control
• Efficient Equipment Incentive
• HVAC Tune-up
• Time of Use Rate
• Renewable Energy
• Load Curtailment

16
Next Steps

• EEC Plan approval by the PUC expected 11/1/09
• Communicate programs to customers 4th Quarter
  2009
• Program Implementation beginning Fall 2009

17

• State Financial Incentives for Alternative
  Energy Energy Efficiency
• Heather Cowley
• Regional Energy Manager
• Southeast Regional Office

18
Financial Assistance for Energy

• Pre-existing PEDA, AFIG, Small Business Loan,
  etc.
• 2008 Legislation Alternative Energy Investment
  Fund
• American Recovery and Reinvestment Act Programs

19
Financing Tools

• Pre-existing
• PEDA closed for 2009, may reopen 2010. HIGHLY
  competitive, large scale capital projects
• AFIG See later slide
• Loans See later slide
• Alternative Energy Investment Fund 7.5 years of
  funding, partly bond, part budget
• ARRA only 5 solicitations remaining

20
But First, Efficiency..

• Before considering alternative energy
• Building envelope analysis
• Building systems analysis
• Occupant usage and behavior review
• Equipment analysis
• Annual fuels/electric usage review

21
Pennsylvania Energy Development Authority - PEDA

• Competitive grants for alternative energy
  production and the manufacturing of alternative
  energy technologies
• Focus Innovative alternative energy generation
  or job creation through manufacturing of
  alternative energy technologies
• Examples Solar, biomass, fuel cell deployment,
  clean coal technologies

22
Alternative Fuels Incentive Grant (AFIG)

• Alternative Fuel Incentive Grant (AFIG)
• Funding for the use of biofuels, purchase of
  hybrid fleet vehicles, fleet refueling
  equipment
• Funding for RD related to alternative fuels
• Opened Oct. 5th, closes Nov. 6th

23
Pollution Prevention Assistance Account (PPAA)
Loan Program

• Overview
• Eligible projects include pollution prevention
  and energy efficiency improvements for small
  businesses of 100 employees or less
• Projects must have a simple payback of 10 years
  or less consisting of energy or pollution related
  savings
• Program can loan up to 100,000 at a 2 fixed
  interest rate for up to 10 years
• (Loan not to exceed 75 of project cost)
• Revolving loan fund is open year round

24
Renewable Energy Program Geothermal Wind
Projects

• Grants, Loans and Guarantees
• Program Funding 25 million
• Eligibility
• Installation and development of geothermal and
  wind projects as well as the manufacturing of
  these systems
• All Businesses, Non-Profit Entities, Political
  Subdivisions and Individuals are eligible to
  apply
• Applications must be received 60 days prior to
  the next scheduled Commonwealth Financing
  Authority to be considered
• Meeting schedule posted on program website

25
Alternative Energy Investment Fund

• Variety of programs
• Efficiency, alternative generation
• Variety of targets
• Residential to large commercial
• Variety of products
• Loans, Finance Guarantees, Grants

26
High Performance Building Program

• Grants, Loans Guarantees - 25 Million in
  funding
• Small businesses with 100 or fewer employees and
  homeowners are eligible
• New construction and renovation costs are
  eligible
• Eligible projects will have to be certified by
  the US Green Building Council meet certain LEED
  Standards
• Applicants are required to provide dollar for
  dollar matching funds for any funds awarded by
  this program

27
Alternative and Clean Energy Program

• Grants, Loans Guarantees for businesses,
  nonprofits, counties, municipalities, school
  districts
• To promote utilization of alternative
  energy/energy efficiency in buildings AND the
  manufacturing of clean energy/energy efficient
  components
• Eligible alternative energy projects include
  waste coal, biomass, wind energy, geothermal,
  clean coal technologies, waste-to-energy,
  large-scale or low-impact hydro, biologically
  derived methane gas, fuel cells, coal mine
  methane, or by-products of pulping and wood
  manufacturing processes
• Facilities that produce alternative fuels are
  also eligible

28
Solar Energy Program

• Grants, Loans Guarantees - 80 Million in
  funding
• Commonwealth Financing Authority
• Open to all businesses, local governments,
  non-profits, schools
• Solar photovoltaic (PV) and solar thermal
  installations are eligible
• Solar manufacturing, as well as RD facilities
  are eligible
• Applicants are required to provide dollar for
  dollar matching funds for any funds awarded by
  this program

29
Pennsylvania Sunshine Solar Program

• Rebates for solar installations PA DEP
• Rebates for qualifying solar photovoltaic (PV)
  and solar thermal installations Program opened
  on May 18, 2009
• 100 million in funding available for small
  business (100 employees or less) and residential
  solar projects
• Rebate funding levels are posted on the website
• A county by county list of DEP qualified solar
  installers is posted on the website for
  applicants to reference
• For more information
• Website www.depweb.state.pa.us keyword PA
  Sunshine Solar Program

30
Keystone HELP

• Low-interest loans for homeowners that make
  eligible energy efficiency improvements
• Loans are available only for projects initiated
  after the programs effective date of Feb 23,
  2009.
• Combined household income must be less than
  150,000 to be eligible for program funds
• Eligible improvements include ENERGY STAR heating
  cooling equipment, windows, doors, water
  heaters, fans, and thermostats air sealing and
  insulation ENERGY STAR closed loop geothermal
  and recommendations of a certified (BPI/RESNET)
  energy auditor with sufficient predicted energy
  savings.

31
Recovery Act in PA

• Energy Efficiency and Conservation Block Grants
  (Conservation Works!) 22.2 million
• State Energy Program (various programs) 99
  million
• Weatherization Assistance, Water Sewer
  Infrastructure
• Various Competitive Programs

32
PA Green Energy Works!

• ARRA-funded grant program for combined heat
  power (CHP), biogas, solar, and wind energy
  projects
• Biogas Solar programs currently open. They
  will close on Oct. 23rd Nov. 6th respectively.
• Businesses, nonprofits, colleges/universities,
  local governments, municipal authorities/utilities
  are eligible to apply

33
Biodiesel Production Incentive Program

• Biodiesel incentive program is for individuals
  who produce sell 25,000 gallons or more/month
  for transportation or home heating
• Provides a reimbursement of 0.75/gallon of
  biodiesel produced
• NOTE Anyone who qualifies for this program most
  likely needs permits from DEP

34
Alternative Energy Production Tax Credit

• Provides tax credit of 15 of net cost of
  alternative energy production projects in PA
  (limit of 1 million per taxpayer)
• Eligible projects include those which produce or
  distribute alternative energy, manufacture
  alternative energy/alternative fuels/energy
  efficient products, improve energy efficiency,
  RD for alternative energy/alternative fuels, or
  enhance efficiency of locomotives
• Tax credit will be available again in 2010

35
www.depweb.state.pa.us
36
Technical Assistance Providers

• Small Business Development Centers
  Environmental Management Assistance Program
  www.askemap.org 877-ask-emap
• Pennsylvania Technical Assistance Program
  www.penntap.psu.edu 412-675-9482
• DOE Industrial Assessment Centers
  http//www.iac.rutgers.edu/
• Regional Office of the Department of
  Environmental Protection

37
Department of Environmental ProtectionOffice of
the Small Business Ombudsman

• For Small Business Grant Loan Information -
  Small Business Ombudsmans Office
• 717-783-8411
• OR to sign up to be notified as updates occur for
  programs
• www.depweb.state.pa.us
• Federal Incentives tracking sites
• www.dsireusa.org
• www.ase.org

38
Featured Partners Products
39
New LED Products
AmbientLED EnduraLED LED lamp technology
providing long-life, energy savings, superb color
consistency mercury-free
40
Energy Efficient Ballasts
Optanium High efficiency instant program
start ballasts that consume fewer input
watts Pulse Start Warms up re-strikes more
quickly than traditional ballasts while using
less energy
41
Control Management Systems
Saves energy by converting a constant volume air
handler to variable airflow without making
changes to the mechanical control systems
FanMaster
PEMS
Power Energy Management Systems Monitor,
measure and control energy loads
42
Process Measurement Instruments
Flow BTU Energy Measurement for

• STEAM
• COMPRESSED AIR
• GAS
• WATER SYSTEMS

43
New Retrofit Fixture Solutions
RT5R 2x 4 Retrofit fixture cuts energy use by a
1/3 RT5 Volumetric recessed fixture that uses a
1/3 less energy
ES8 Energy efficient troffer
44
Coordinated Lighting System
EcoSystem
Commercial lighting system that provides
businesses with 40 to 70 energy savings
45
Sensors Controls
H-Moss Optimizer
Sensors for residential, commercial industrial
applications. Saves you 30 in energy costs
while reducing re-lamping intervals.
46
Imagers - Analyzers - Meters
Ti32 Industrial thermal imager 435
Power quality analyzer 233 Wireless
remote display digital multimeter 411D
Distance meter Solar 500 Solar
analyzer LM-120 Portable digital light
meter
47
Metering
Advanced metering technology for Smart Grid
automatic meter reader applications
Metering Sub-Metering
Induction Lighting
PVW Hybrid Area Lighting
Sustainable off-grid lighting solution that runs
on solar wind turbine power
48
Follow Up

• Email Survey
• Copies of presentations available via survey

49
PECO Post-2010 and Act 129Rumsey
ElectricOctober 14, 2009
50
Todays Discussion

• Deregulation/End of Transition
• PECO Default Service
• Price Uncertainty
• PA Act 129

51
Utility Functions

• Before deregulation, utilities owned and
  operated all parts of the electric system.
• After deregulation, utilities are only
  responsible for the delivery of electricity
  they do not produce electricity.

Generation
Transmission
Distribution
52
Exelon Snapshot
Post-Deregulation generation is separate from
transmission and distribution
53
Deregulation in PA

• Retail Electric Competition (1996)
• Generation to be open to competition
• Distribution/Transmission to remain regulated
• Transition period through 12/31/2010
• Prices set through 2010 rate caps protect
  against volatile market prices
• PECO no longer owns or generates power contract
  for power through 2010
• Limited competition because rate caps are lower
  than what suppliers can provide, i.e. prices
  today are below market

54
PECO Post-2010 and Act 129Rumsey
ElectricOctober 14, 2009
55
Todays Discussion

• Deregulation/End of Transition
• PECO Default Service
• Price Uncertainty
• PA Act 129

56
Utility Functions

• Before deregulation, utilities owned and
  operated all parts of the electric system.
• After deregulation, utilities are only
  responsible for the delivery of electricity
  they do not produce electricity.

Generation
Transmission
Distribution
57
Exelon Snapshot
Post-Deregulation generation is separate from
transmission and distribution
58
Deregulation in PA

• Retail Electric Competition (1996)
• Generation to be open to competition
• Distribution/Transmission to remain regulated
• Transition period through 12/31/2010
• Prices set through 2010 rate caps protect
  against volatile market prices
• PECO no longer owns or generates power contract
  for power through 2010
• Limited competition because rate caps are lower
  than what suppliers can provide, i.e. prices
  today are below market

59
PECO Electric Rate HT, /kWh
Rates set by Restructuring and Merger Settlements
Approximately 15 increase over 14 years
7.95
7.94
7.94
7.94
7.59
7.15
7.16
7.05
7.07
7.01
7.01
6.67
6.49
Generation (Energy Capacity)
CTC
Transmission
Distribution
60
PECO Electric Rate HT, /kWh
? /kWh
7.94/kWh
CTC
? Generation (Energy Capacity)
Generation
Distribution Transmission
61
Looking Ahead

• Transition Period Ends December 31, 2010
• Rate caps expire
• Competitive Transition Charge (CTC) eliminated
• PECOs contract for generation expires
• PECO will remain as Default Service Provider.
• New rules for how PECO procures generation supply
  for default service customers.
• Prices determined by competitive energy market

62

• PECO Default Service

63
PECO Default Service Plan

• Approved by PA PUC 4/16/09
• Defines plan for procuring energy for customers
  receiving default service
• Early phase-in option for accts lt500kW
• Cap defer plan if customer class faces increase
  gt25
• Quarterly reconciliation

64
PECO Procurement Schedule
Default Generation price in 2011 will be a
blend of the above procurements for each rate
class. Prices for 2011 will not be finalized
until the results of the Fall 2010 procurement
are known
65
Procurement Classes

• Four PECO procurement classes
• 1. Large Commercial and Industrial (gt500kW)
• GS, PD, HT
• 2. Medium Commercial (gt100 kW and lt500kW)
• GS, PD, HT
• 3. Small Commercial (lt100kW)
• GS, PD, HT, AL, TL, POL, SLE, SLS, SLP
• 4. Residential
• R, RH, RT, OP

66
Procurement Options

• Large CI customers (gt 500 KW) - 3 options for
  generation
• Contract with alternative retail supplier
• Default service from PECO at day-ahead hourly
  prices
• Default service (PECO) at fixed price (first year
  only)
• Residential and small CI (lt 500 KW) - 2
  options
• Contract with alternative retail supplier
• Choose default service from PECO at a fixed-price

67
Key Changes in Rate Design

• Demand charges are no longer included as a
  separate component for generation
• Demand charges
• For Large CI, hourly pricing will include a
  demand charge based on PJMs charges one year
  contract will include demand charges. (Generation
  only)
• GS Heating Block
• Phased out over 3 years (Generation only)
• Night Service Riders, HT, PD, GS Construction
  Rider
• Eliminated for generation only in 2011

68

• Price Uncertainty

69
Price Uncertainty

• The market for electricity is dynamic!
• There has been much volatility over the last 12
  months
• Generation prices may be higher in 2011, but
  currently are relatively low
• Key uncertainties influencing 2011 electric
  generation rates
• Supply (fuel, construction costs)
• Demand (economy, efficiency)
• Natural gas prices
• Environmental considerations (carbon, AEPS)

70
Price Uncertainty, cont.

• PA PUC projected price increases
• Rate GS Rate HT
• 6/27/08 42 52
• 9/29/08 9 15
• 12/30/08 -2 3
• 3/30/09 -13 -10
• 6/27/09 -10 -7
• First PECO competitive purchase for 2011
  (residential) 9 increase

71
PUC estimate 15 increase For Rate HT
PUC estimate 3 increase For Rate HT
PUC estimate 10 decrease For Rate HT
2007
2008
2009
Notes 1. The monthly forward market prices
reflect the average of the NYMEX PJM on and
off-peak 12 months futures price strip.
2. The price listed for Jan 2011 is the
NYMEX market price (average of on and off-peak
prices) as of September 1, 2009 for an energy
contract from Jan-Dec, 2011.
72
Load Shape/Load Factor
10 Load Factor
Demand
50 Load Factor
Demand
100 Load Factor
Demand
73
Customer Checklist - Shopping

• Pre-Shopping
• Obtain list of licensed suppliers
• Obtain list of electric accounts including
  utility rates
• Determine hourly metered accounts versus daily or
  monthly metered accounts
• Obtain usage data- monthly or hourly
• Marketers/ Suppliers
• Types of products offered- fixed price, indexed,
  combination
• Billing options- one bill or two

74
Customer Checklist - Shopping

• Benefits of curtailment or generation
• Term and conditions of contracts- one year, two
  year, etc. Out-clauses or evergreen clauses.
  Get standard contract approved while negotiating
  price
• Penalties- switching suppliers, changes in load
• Experience as a supplier- billing, interface with
  utility, customer references
• Use of consultants
• Length of time proposed price is valid
• Credit requirement

75

• PA Act 129

76
Act 129 Overview

• Signed into Law on October 15, 2008
• Three components
• Energy Efficiency and Conservation (EEC)
• Smart Meters deployment of smart meter
  technology
• Procurement relates to Default service
• Electric Distribution Companies (EDCs) with at
  least 100,000 customers must develop a plan to
  reduce electric energy consumption and demand
• PECOs EEC plan filed with the PUC on 7/1/09
• PUC will render a decision on the Plan on
  10/15/09

77
Act 129 Targets

• Energy Efficiency (Consumption)
• Savings target of 1 for each EDC by May 31, 2011
• 3 savings target by May 31, 2013 (1.2B kWh)
• Baseline set from forecasted usage for 6/1/09 to
  5/31/10
• Demand Reduction (Demand)
• 4.5 reduction off of 100 hrs peak demand for
  each EDC by May 31, 2013 (355 MW)
• Baseline peak demand set from 6/1/07 5/31/08

78
Other Requirements

• Minimum of 10 of consumption reductions shall be
  obtained from federal, state and local government
  including municipalities, school districts,
  institutions of higher education, non-profit
  organizations
• Plan must include measures for Low Income
  Households
• 2 annual cost cap for EEC plans based on EDCs
  revenue as of 12/31/06 ( 85.5M/yr)

79
Other Requirements, cont.

• Plan must include how QA and performance will be
  measured, verified and evaluated
• Plans must be cost effective
• Total Resource Cost (TRC) Test as outlined in the
  California Standard Practice Manual
• Penalties for failure to achieve target savings -
  1M to 20M

80
Other Requirements, cont.

• EDCs must competitively bid out the
  implementation of a portion of the Plan to
  Conservation Service Providers (CSPs)
• All CSPs must be registered and approved by PUC
• PUC established a registry of entities that will
  provide consultation, design, administration and
  management services to an EDC
• Registry establishes minimum requirements for
  CSPs to do business with EDCs
• EDCs can impose more stringent requirements
• PUC CSP registry available at www.puc.state.pa.us

81
Proposed Plan Residential

• In-store CFL discounts, give-aways
• Low-Income energy efficiency measures
• Whole Home Performance - audit measures
• Home Energy Incentives energy efficient
  appliances and equipment
• New Construction energy efficiency design
• Appliance pickup
• Direct Load Control monthly incentive for
  control of air conditioning unit compressor
• Time-of-Use Rate

82
Proposed Plan CommInd

• Equipment Incentives (32.6M)
• Financial incentives for retrofits that
  incorporate energy efficient measures for all
  major end uses in small business and general CI
  facilities
• Prescriptive incentives (/measure)
• Custom incentives (/kWh saved)
• New Construction (1.9M)
• Financial incentives to incorporate energy
  efficient building design and construction
  practices in new facilities and major renovations

83
Proposed Plan CommInd

• Government/Institutional/Non-Profit (29.5M)
• Street lights, traffic signals
• Prescriptive and custom incentives
• Partial audit reimbursement
• Renewable Resources (2.3M)
• Incentives for solar PV and hot water systems
  (/W)
• Permanent Load Reduction (3.4M)
• Incentive for projects and technologies that
  permanently reduce demand or shift demand from
  on-peak to off-peak time period

84
Proposed Plan Other

• Direct Load Control (5.5M)
• Monthly incentives for thermostat control
• Similar to RDLC, but instead of switches,
  Programmable Communicating Thermostats (PCTs) are
  installed to raise temperature set points during
  called curtailment events
• Time-of-Use Rate (0.9M)
• Time-of-Use tariff designed to lower demand
  during a narrow band of peak hours (aligned with
  system peak hours)
• Customer charged significantly higher prices
  during the super peak periods, lower rates in
  shoulder and off peak

85
Proposed Plan Other

• DR Aggregator Contracts (20.8M)
• Leverage Curtailment Service Provider expertise
  and customer contacts to contract guaranteed
  demand reduction during highest 100 hours
• Distributed Energy Resources (11.1M)
• Financial incentives provided to existing backup
  generation owners in exchange for PECO taking
  over dispatch of the units as a DR resource

86
Proposed Measures
87
Proposed Measures
88
Proposed Measures
89
What Can You Do Right Now?

• Understand electric usage
• Review past electric bills
• Manage energy consumption
• Reducing consumption prior to 2011 will mitigate
  impact of future price increase
• Stay informed as rules are developed and the
  energy market evolves
• www.peco.com/know
• www.puc.state.pa.us.org/utilitychoice

90

• Questions?

91
Changes in Rate Design
The figures on these charts are for illustration
purposes only. We will not know the exact
figures until after the supplier bids are
received and accepted.
92
Changes in Rate Design
The figures on this chart are for illustration
purposes only. We will not know the exact
figures until after the supplier bids are
received and accepted.
93
Default Procurement Plan
94
PECO Electric Rate HT, /kWh
Rates set by Restructuring and Merger Settlements
Approximately 15 increase over 14 years
7.95
7.94
7.94
7.94
7.59
7.15
7.16
7.05
7.07
7.01
7.01
6.67
6.49
Generation (Energy Capacity)
CTC
Transmission
Distribution
95
PECO Electric Rate HT, /kWh
? /kWh
7.94/kWh
CTC
? Generation (Energy Capacity)
Generation
Distribution Transmission
96
Looking Ahead

• Transition Period Ends December 31, 2010
• Rate caps expire
• Competitive Transition Charge (CTC) eliminated
• PECOs contract for generation expires
• PECO will remain as Default Service Provider.
• New rules for how PECO procures generation supply
  for default service customers.
• Prices determined by competitive energy market

97

• PECO Default Service

98
PECO Default Service Plan

• Approved by PA PUC 4/16/09
• Defines plan for procuring energy for customers
  receiving default service
• Early phase-in option for accts lt500kW
• Cap defer plan if customer class faces increase
  gt25
• Quarterly reconciliation

99
PECO Procurement Schedule
Default Generation price in 2011 will be a
blend of the above procurements for each rate
class. Prices for 2011 will not be finalized
until the results of the Fall 2010 procurement
are known
100
Procurement Classes

• Four PECO procurement classes
• 1. Large Commercial and Industrial (gt500kW)
• GS, PD, HT
• 2. Medium Commercial (gt100 kW and lt500kW)
• GS, PD, HT
• 3. Small Commercial (lt100kW)
• GS, PD, HT, AL, TL, POL, SLE, SLS, SLP
• 4. Residential
• R, RH, RT, OP

101
Procurement Options

• Large CI customers (gt 500 KW) - 3 options for
  generation
• Contract with alternative retail supplier
• Default service from PECO at day-ahead hourly
  prices
• Default service (PECO) at fixed price (first year
  only)
• Residential and small CI (lt 500 KW) - 2
  options
• Contract with alternative retail supplier
• Choose default service from PECO at a fixed-price

102
Key Changes in Rate Design

• Demand charges are no longer included as a
  separate component for generation
• Demand charges
• For Large CI, hourly pricing will include a
  demand charge based on PJMs charges one year
  contract will include demand charges. (Generation
  only)
• GS Heating Block
• Phased out over 3 years (Generation only)
• Night Service Riders, HT, PD, GS Construction
  Rider
• Eliminated for generation only in 2011

103

• Price Uncertainty

104
Price Uncertainty

• The market for electricity is dynamic!
• There has been much volatility over the last 12
  months
• Generation prices may be higher in 2011, but
  currently are relatively low
• Key uncertainties influencing 2011 electric
  generation rates
• Supply (fuel, construction costs)
• Demand (economy, efficiency)
• Natural gas prices
• Environmental considerations (carbon, AEPS)

105
Price Uncertainty, cont.

• PA PUC projected price increases
• Rate GS Rate HT
• 6/27/08 42 52
• 9/29/08 9 15
• 12/30/08 -2 3
• 3/30/09 -13 -10
• 6/27/09 -10 -7
• First PECO competitive purchase for 2011
  (residential) 9 increase

106
PUC estimate 15 increase For Rate HT
PUC estimate 3 increase For Rate HT
PUC estimate 10 decrease For Rate HT
2007
2008
2009
Notes 1. The monthly forward market prices
reflect the average of the NYMEX PJM on and
off-peak 12 months futures price strip.
2. The price listed for Jan 2011 is the
NYMEX market price (average of on and off-peak
prices) as of September 1, 2009 for an energy
contract from Jan-Dec, 2011.
107
Load Shape/Load Factor
10 Load Factor
Demand
50 Load Factor
Demand
100 Load Factor
Demand
108
Customer Checklist - Shopping

• Pre-Shopping
• Obtain list of licensed suppliers
• Obtain list of electric accounts including
  utility rates
• Determine hourly metered accounts versus daily or
  monthly metered accounts
• Obtain usage data- monthly or hourly
• Marketers/ Suppliers
• Types of products offered- fixed price, indexed,
  combination
• Billing options- one bill or two

109
Customer Checklist - Shopping

• Benefits of curtailment or generation
• Term and conditions of contracts- one year, two
  year, etc. Out-clauses or evergreen clauses.
  Get standard contract approved while negotiating
  price
• Penalties- switching suppliers, changes in load
• Experience as a supplier- billing, interface with
  utility, customer references
• Use of consultants
• Length of time proposed price is valid
• Credit requirement

110

• PA Act 129

111
Act 129 Overview

• Signed into Law on October 15, 2008
• Three components
• Energy Efficiency and Conservation (EEC)
• Smart Meters deployment of smart meter
  technology
• Procurement relates to Default service
• Electric Distribution Companies (EDCs) with at
  least 100,000 customers must develop a plan to
  reduce electric energy consumption and demand
• PECOs EEC plan filed with the PUC on 7/1/09
• PUC will render a decision on the Plan on
  10/15/09

112
Act 129 Targets

• Energy Efficiency (Consumption)
• Savings target of 1 for each EDC by May 31, 2011
• 3 savings target by May 31, 2013 (1.2B kWh)
• Baseline set from forecasted usage for 6/1/09 to
  5/31/10
• Demand Reduction (Demand)
• 4.5 reduction off of 100 hrs peak demand for
  each EDC by May 31, 2013 (355 MW)
• Baseline peak demand set from 6/1/07 5/31/08

113
Other Requirements

• Minimum of 10 of consumption reductions shall be
  obtained from federal, state and local government
  including municipalities, school districts,
  institutions of higher education, non-profit
  organizations
• Plan must include measures for Low Income
  Households
• 2 annual cost cap for EEC plans based on EDCs
  revenue as of 12/31/06 ( 85.5M/yr)

114
Other Requirements, cont.

• Plan must include how QA and performance will be
  measured, verified and evaluated
• Plans must be cost effective
• Total Resource Cost (TRC) Test as outlined in the
  California Standard Practice Manual
• Penalties for failure to achieve target savings -
  1M to 20M

115
Other Requirements, cont.

• EDCs must competitively bid out the
  implementation of a portion of the Plan to
  Conservation Service Providers (CSPs)
• All CSPs must be registered and approved by PUC
• PUC established a registry of entities that will
  provide consultation, design, administration and
  management services to an EDC
• Registry establishes minimum requirements for
  CSPs to do business with EDCs
• EDCs can impose more stringent requirements
• PUC CSP registry available at www.puc.state.pa.us

116
Proposed Plan Residential

• In-store CFL discounts, give-aways
• Low-Income energy efficiency measures
• Whole Home Performance - audit measures
• Home Energy Incentives energy efficient
  appliances and equipment
• New Construction energy efficiency design
• Appliance pickup
• Direct Load Control monthly incentive for
  control of air conditioning unit compressor
• Time-of-Use Rate

117
Proposed Plan CommInd

• Equipment Incentives (32.6M)
• Financial incentives for retrofits that
  incorporate energy efficient measures for all
  major end uses in small business and general CI
  facilities
• Prescriptive incentives (/measure)
• Custom incentives (/kWh saved)
• New Construction (1.9M)
• Financial incentives to incorporate energy
  efficient building design and construction
  practices in new facilities and major renovations

118
Proposed Plan CommInd

• Government/Institutional/Non-Profit (29.5M)
• Street lights, traffic signals
• Prescriptive and custom incentives
• Partial audit reimbursement
• Renewable Resources (2.3M)
• Incentives for solar PV and hot water systems
  (/W)
• Permanent Load Reduction (3.4M)
• Incentive for projects and technologies that
  permanently reduce demand or shift demand from
  on-peak to off-peak time period

119
Proposed Plan Other

• Direct Load Control (5.5M)
• Monthly incentives for thermostat control
• Similar to RDLC, but instead of switches,
  Programmable Communicating Thermostats (PCTs) are
  installed to raise temperature set points during
  called curtailment events
• Time-of-Use Rate (0.9M)
• Time-of-Use tariff designed to lower demand
  during a narrow band of peak hours (aligned with
  system peak hours)
• Customer charged significantly higher prices
  during the super peak periods, lower rates in
  shoulder and off peak

120
Proposed Plan Other

• DR Aggregator Contracts (20.8M)
• Leverage Curtailment Service Provider expertise
  and customer contacts to contract guaranteed
  demand reduction during highest 100 hours
• Distributed Energy Resources (11.1M)
• Financial incentives provided to existing backup
  generation owners in exchange for PECO taking
  over dispatch of the units as a DR resource

121
Proposed Measures
122
Proposed Measures
123
Proposed Measures
124
What Can You Do Right Now?

• Understand electric usage
• Review past electric bills
• Manage energy consumption
• Reducing consumption prior to 2011 will mitigate
  impact of future price increase
• Stay informed as rules are developed and the
  energy market evolves
• www.peco.com/know
• www.puc.state.pa.us.org/utilitychoice

125

• Questions?

126
Changes in Rate Design
The figures on these charts are for illustration
purposes only. We will not know the exact
figures until after the supplier bids are
received and accepted.
127
Changes in Rate Design
The figures on this chart are for illustration
purposes only. We will not know the exact
figures until after the supplier bids are
received and accepted.
128
Default Procurement Plan
129
Rumsey ElectricThanks You