Anexo

ATTACHMENT #1 Utility minutes of 10-23-2006 A RESOLUTION PROPOSING THE INCLUSION OF AN AREA WITHIN THE LIMITS OF THE CITY OF DOVER AND CALLING FOR A SPECIAL ELECTION TO BE HELD IN THE SAID AREA. A RESOLUTION PROPOSING THE INCLUSION OF AN AREA WITHIN THE LIMITS OF THE CITY OF DOVER AND CALLING FOR A SPECIAL ELECTION TO BE HELD IN THE SAID AREA. WHEREAS, the Charter of the City of Dover authorizes Council to extend the boundaries of the said City after a special election of the qualified voters and real estate owners of the territory proposed to be annexed, and WHEREAS, the Mayor and Council of the City of Dover deem it in the best interest of the City of Dover to include an area located on the south side of Route 8, between Artis Drive and Dover; and an area located on the south side of Route 8 between Mifflin Road and Artis Drive; and an area located on the south east side of Route 8; and an area located at 1550 and 1538 Forrest Avenue which is contiguous to the present City limits, into the limits of the City of Dover and within a zoning classification as recommended by the City of Dover Planning Commission. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 1. That a special election be held for an area located on the south side of Route 8 between Artis Drive and Dover; and an area located on the south side of Route 8 between Mifflin Road and Artis Drive; and an area located on the south east side of Route 8; and an area located at 1550 and 1538 Forrest Avenue situated in East Dover Hundred, Kent County, State of Delaware. 2. That the election be held on the 14th day of DECEMBER, 2006 commencing at the hours of 11:00 a.m. in the City Hall Annex, 15 E. Loockerman Street, Dover, Delaware, for the purpose of submitting the question of annexation of the above areas to those persons entitled to vote thereon. 3. That the election be held and conducted pursuant to the provisions of the Charter of the City of Dover as amended. 4. That this resolution be published in accordance with the City of Dover Charter. ADOPTED: November 13, 2006

ATTACHMENT #2 Utility minutes of 10-23-2006 A RESOLUTION PROPOSING THE INCLUSION OF AN AREA WITHIN THE LIMITS OF THE CITY OF DOVER AND CALLING FOR A SPECIAL ELECTION TO BE HELD IN THE SAID AREA. WHEREAS, the Charter of the City of Dover authorizes Council to extend the boundaries of the said City after a special election of the qualified voters and real estate owners of the territory proposed to be annexed, and WHEREAS, the Mayor and Council of the City of Dover deem it in the best interest of the City of Dover to include an area located at 1166 South Bay Road, which is contiguous to the present City limits, into the limits of the City of Dover and within a zoning classification as recommended by the City of Dover Planning Commission. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 1. That a special election be held for an area located at 1166 South Bay Road situated in East Dover Hundred, Kent County, State of Delaware. 2. That the election be held on the 14th day of December, 2006 commencing at the hours of 11:00 a.m. in the City Hall Annex, 15 E. Loockerman Street, Dover, Delaware, for the purpose of submitting the question of annexation of the above area to those persons entitled to vote thereon. 3. That the election be held and conducted pursuant to the provisions of the Charter of the City of Dover as amended. 4. That this resolution be published in accordance with the City of Dover Charter. ADOPTED: November 13, 2006

ATTACHMENT #3 Utility Minutes of 10-23-2006 Washington New York Houston Columbia San Diego London Moscow Mexico City Asset, Energy and Risk Management First Quarter Update City of Dover Utilities Subcommittee October 23, 2006

Agenda ™ Asset Operations Update ™ Energy Management and Power Purchases ™ Risk Management and Market Monitoring ™ Strategic Review of Generation Assets 2 Proprietary & Confidential

Asset Operations Update Completed personnel transition to North American Energy Services • Plans & Benefits transitioned • Staff reduced 10% • Transition costs under budget • Union negotiations underway Operations (very mild summer) • July. Operated all 4 units 13 days • August. Operated all 4 units only 4 days (very rare) • September. No operations (extremely rare) • Transformer outage, however all PJM testing was successfully completed • Currently under budget 3 Proprietary & Confidential

Asset Operations Update Maintenance • Completed annual outages on units 1 and 2 ahead of schedule and accident free • Fuel oil tank inspection scheduled for Spring Environmental and Safety • No environmental Notice of Violations, All quarterly reports filed on time • No accidents, 1 ½ years without a lost time accident • Monitoring/active in Delaware multi-pollutant legislation 4 Proprietary & Confidential

Energy Management and Power Purchases • Procured 95% of Dover’s on-peak needs and 99% of its off-peak needs for the 2006-2007 power year (July 2006 through June 2007) • Purchases are with four investment grade counterparties • Power is delivered to Dover/Delmarva aggregate bus eliminating congestion risk • Wholesale price to Dover is currently expected to be at or below target of $84/MWh inclusive of Energy Manager and PJM fees • Daily coordination with station management to bid or self schedule Dover generation into the PJM wholesale markets 5 Proprietary & Confidential

Risk Management and Market Monitoring • Risk management monitors current and future power markets and recommends volume, timing and pricing to manage Dover’s future price exposure • Market volatility presents opportunities to meet or beat current market pricing • Monitor counterparty credit to ensure any collateral requirements are met • On-line, web based systems are available to City professionals to monitor current and future pricing movements in the PJM market and their relative impact on purchases made 6 Proprietary & Confidential

Strategic Review of Generation Assets • Currently preparing a market based valuation of McKee Run and Van Sant Stations • PACE will evaluate fixed and variable costs and compare such costs to projected future revenues from energy, capacity and ancillary services (black start, etc.) • PACE will develop valuations of the stations based on net cash flows from the stations as well as from recent sales of assets in PJM as well as other financial metrics (i.e.. earnings multipliers, etc.) • Currently working with North American Energy Services on remainder or power year cost projections based on current market conditions 7 Proprietary & Confidential

Generation Station Economics Monthly Operating Expenses and Gross Margin 1,000,000 • Gross margin includes energy, capacity 900,000 800,000 700,000 and black-start revenues Dollars ($) 600,000 500,000 400,000 300,000 • Additional revenues from sales of excess 200,000 100,000 0 emissions allowances ($1 million to $1.5 Sept NoO Au ve De be em ct Ju gu ob m be ly st r er Ap ril Ju M ay ne r million) will offset expenses ce m Ja r be nu Fe ry br a ua M ar ry ch Expenses Gross Margin • Projected operating costs will continue to Dover Generation, Operating Expenses vs Gross Margin decline if projected dispatch is realized 7,000,000 6,000,000 5,000,000 • On-going cost evaluations will continue as Dollars ($) 4,000,000 3,000,000 future dispatch scenarios are examined 2,000,000 1,000,000 0 Se Au Ju gus ly Ap ril pt O em be t r M ay ct No ber ve o June De ce mm be be r Ja nu Fe ry a r br M ua ry ar ch Actual Expenses Summed GM Summed Expenses Summed 8 Proprietary & Confidential

ATTACHMENT #4 Utility Minutes of 10-23-2006 Updated Electric Rate Analysis and Adjustments Presented to the City of Dover, Delaware October 23, 2006

Agenda • Need for Adjustments • Key Changes Since June • Net Margins / Cash Flow • Rate Adjustments • Discussion

Need for Rate Adjustments • Current Rates Implemented July 1, 2006 • Expected Additional Changes • Updated Financial Forecast • Purchased Power Contract Updated • Power Plant Costs Evaluated

Previous Increase Explanation Revenue without Revenue with June 2006 Rate Study July 1 Increase July 1 Increase Percent $1,000 $1,000 Increase Rate Revenue $ 57,485 $ 79,320 38.00% Power Cost Adjustment $ 7,323 Total $ 64,808 $ 79,320 22.50%

Key Changes Since June Amount $1,000 Excess Capacity Charge 63 Elimination of Duke Revenues 964 PACE Incentive Fee 973 Elimination of Bond Reserve Utilization 440 Changes to Forecast Affecting Margins 743 3,183

Other Adjustments • Rate Stabilization Fund Monies Not Available for Coverage - $5 Million • Power Plant Not Breaking Even - $4.5 Million Next Year • Adjustments for Street Lighting - Revenues and kWh’s

Updated Financial Forecast • Adjusted Revenue Forecast • Growth Reduced to 1 Percent • Kraft and P&G No Growth • Expenditure Forecast • Included Additional Charges for: • Excess Capacity Charge • PACE Incentive Fee • Adjustment to Loss Factor • Transfer to General Fund from Fixed Amount to Percent of Revenue

Debt Service Coverage Comparison FY2007 June 2006 Study - Final Oct 2006 Study - Final Operating Revenue - Retail Rate Revenue 57,484,530 55,711,900 Operating Revenue - Retail Rate Adjust. July 1, 2006 21,844,121 22,894,000 Operating Revenue - Retail Rate Adjust. Jan 1, 2007 - 3,144,200 Operating Revenue - Other 2,492,060 2,328,400 Operating Revenue - Utility Tax 1,777,668 1,440,700 Total Revenue 83,598,379 85,519,200 Purchased Power Expense (66,957,951) (60,775,216) Operating Expenses (13,102,579) (18,636,190) Total Operating Expenses (80,060,529) (79,411,406) Operating Margin 3,537,849 6,107,794 Non-Oper. Rev. - Interest on Operating Funds 384,086 634,000 Operating Transfers from Reserves 5,440,000 Operating Transfers - Out (5,700,000) (5,700,000) Margins Available For Debt Service 3,661,935 1,041,794 Interest for Long-Term Debt (884,652) (859,048) Cash From Operations 2,777,283 182,746 Other Non Cash Revenues and Expenses (4,505,455) (4,274,140) Net Margins (1,728,173) (4,091,394) Debt Service Coverage Margins Avail. for Debt Service 3,661,935 1,041,794 Total Debt Service 2,614,652 2,589,048 Debt Service Coverage Ratio 1.40 0.40

Updated Financial Forecast • Reviewed Results • Determined Level of Additional Revenue Adjustment • Working on Adjusted Rates

Net Margins - Power Plant Breakeven 2007 2008 2009 2010 2011 Net Margins Operating Revenue - Retail Rates [1] 78,605,900 85,692,100 93,418,200 94,296,700 95,184,500 Retail Rates Increase Percentage 8.00% 8.00% Operating Revenue - Retail Rates Adjustment [2] 3,144,200 6,855,400 - - - Operating Revenue - Other and Utility Tax 3,769,100 3,369,400 3,384,700 3,400,200 3,415,800 Total Revenue 85,519,200 95,916,900 96,802,900 97,696,900 98,600,300 Purchased Power Expense (60,775,216) (61,166,200) (61,555,800) (61,943,700) (62,329,800) Operating Expenses (18,636,190) (19,447,900) (21,529,800) (22,274,100) (23,046,100) Total Operating Expenses (79,411,406) (80,614,100) (83,085,600) (84,217,800) (85,375,900) Operating Margin 6,107,794 15,302,800 13,717,300 13,479,100 13,224,400 Non-Oper. Rev. - Interest on Operating Funds 634,000 634,000 634,000 634,000 634,000 Operating Transfers - Out (5,700,000) (6,234,600) (6,292,200) (6,350,300) (6,409,000) Margins Available For Debt Service 1,041,794 9,702,200 8,059,100 7,762,800 7,449,400 Interest for Long-Term Debt (859,048) (1,599,500) (1,726,400) (1,617,400) (1,498,300) Cash From Operations 182,746 8,102,700 6,332,700 6,145,400 5,951,100 Non Cash Income/Loss (4,274,140) (4,581,700) (4,981,600) (5,146,500) (5,153,900) Net Margins ($) (4,091,394) 3,521,000 1,351,100 998,900 797,200 Debt Service Coverage Margins Avail. for Debt Service 1,041,794 9,702,200 8,059,100 7,762,800 7,449,400 Total Debt Service 2,589,048 3,379,500 4,171,300 4,157,500 4,160,100 Debt Service Coverage Ratio 0.40 2.87 1.93 1.87 1.79 [1] Retail Rates in FY2007 includes additional Rate Revenue from July 1, 2006 increase. [2] Retail Rates Adjustment Revenue shown in FY2007 is for the January 1, 2007 increase.

Power Plant Costs FY2008 January 1, 2007 July 1, 2007 Total Annual Power Plant Increase Additional Increase Additional Increase Additional Income (Loss) Required Increase Required Increase Required Increase $ - 8.000% 0.000% 8.000% 0.000% 16.640% 0.000% $ (4,500,000) 8.000% 0.000% 14.000% 6.000% 23.120% 6.480%

Net Margins - Power Plant Loss 2007 2008 2009 2010 2011 Net Margins Operating Revenue - Retail Rates [1] 78,605,900 85,692,100 98,608,100 99,535,500 100,472,500 Retail Rates Increase Percentage 8.00% 14.00% Operating Revenue - Retail Rates Adjustment [2] 3,144,200 11,996,900 - - - Operating Revenue - Other and Utility Tax 3,769,100 3,460,000 3,476,200 3,492,500 3,509,000 Total Revenue 85,519,200 101,149,000 102,084,300 103,028,000 103,981,500 Purchased Power Expense (60,775,216) (65,666,200) (66,055,800) (66,443,700) (66,829,800) Operating Expenses (18,636,190) (19,538,500) (21,631,600) (22,376,900) (23,149,900) Total Operating Expenses (79,411,406) (85,204,700) (87,687,400) (88,820,600) (89,979,700) Operating Margin 6,107,794 15,944,300 14,396,900 14,207,400 14,001,800 Non-Oper. Rev. - Interest on Operating Funds 634,000 634,000 634,000 634,000 634,000 Operating Transfers - Out (5,700,000) (6,574,700) (6,635,500) (6,696,800) (6,758,800) Margins Available For Debt Service 1,041,794 10,003,600 8,395,400 8,144,600 7,877,000 Interest for Long-Term Debt (859,048) (1,599,500) (1,726,400) (1,617,400) (1,498,300) Cash From Operations 182,746 8,404,100 6,669,000 6,527,200 6,378,700 Non Cash Income/Loss (4,274,140) (4,581,700) (4,981,600) (5,146,500) (5,153,900) Net Margins ($) (4,091,394) 3,822,400 1,687,400 1,380,700 1,224,800 Debt Service Coverage Margins Avail. for Debt Service 1,041,794 10,003,600 8,395,400 8,144,600 7,877,000 Total Debt Service 2,589,048 3,379,500 4,171,300 4,157,500 4,160,100 Debt Service Coverage Ratio 0.40 2.96 2.01 1.96 1.89 [1] Retail Rates in FY2007 includes additional Rate Revenue from July 1, 2006 increase. [2] Retail Rates Adjustment Revenue shown in FY2007 is for the January 1, 2007 increase.

Rate Design Analysis • Rates to be Developed to: – Generate Adequate Revenues – Reflect Costs of Providing Service – Meet City’s Policies and Objectives – Incorporate Direction Provided – Reestablish Debt Service Coverage

Rate Design Analysis • Need to Address Revenue Shortfalls • Rate Implementation Strategy – Adjust Rates 8 Percent January 1, 2007 – Additional Adjustment July 1, 2007 • Approximately 14 Percent (Includes the 8 Percent for July 1, 2007) • Will Cover Power Plant Shortfall • Continue to Monitor Power Supply Costs – Plant Operating Costs – Power Markets

Updated Electric Rate Analysis and Adjustments Discussion and Questions