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ATTACHMENT #1 Committee Meeting of 05/27/2008 Burns &. McDonnell Electric Rate Adjustment Considerations Presented to the City of Dover, Delaware May 27, 2008 800Z/LZ/S0 JO SUNOOPY SoH TUMUIOD ANTI T# LNAINHOVLILV

Burns McDonnell | | N ee Current Rates Implemented July 1, 2007 Additional Changes were Expected Financial Forecast was Updated Purchased Power Costs Adjusted Capital Requirements Incorporated

SINCE 1898) Projected Expenses Increasing: — Purchased Power Expenses ¢ Up 10.4 Percent — Total Electric Operating Expenses ¢ Up 7 Percent — Major Capital Improvements ¢ $22 Million in New Debt

McDore Financial Forecast ¢« Results were Reviewed ¢ Key Financial Targets: — Debt Service Coverage — Positive Net Margins Determined Revenue Adjustment — FY 2009 — 7.0 Percent

McDor eI Cost-of-Service Analysis ¢e Unbundled Revenue Requirements — Power Supply (Demand & Energy) — Transmission — Distribution — Customer ¢ Assigned Costs to Classes — Allocation Factors ¢ Summarized Results

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be McDonnell] Rate Design Analysis ¢ Address 7% Revenue Shortfall ¢ Rate Implementation Strategy — Implement July 1, 2008 — Consider Cost of Service Results — Rate Adjustments by Class Vary

Customer Class Residential Small Commercial Single Phase Small Commercial Three Phase Medium Commerical Single Phase Medium Commerical Three Phase Large Commercial * Primary * Transmission * Customer Charge ($/month) Current 5.00 5.00 15.00 5.00 15.00 15.00 10.00 Proposed 5.00 5.00 15.00 5.00 15.00 15.00 10.00 Energy Charge ($/kWh) Current 0.1343 0.1387 0.1387 0.0950 0.0950 0.0950 0.0935 0.0886 Proposed 0.1450 0.1465 0.1465 0.0915 0.0915 0.0915 0.0895 0.0875 Demand Charge ($/kW-month) Current * Large Commercial, Primary and Transmission customer classes have power factor adjustment. Proposed

Transmission Rate Determination of Demand Adjustment Power Factor Correction Change 90% 98.5% Change Holds Transmission Customers to the Same Standard as the City

McDonnell | Typical Bill Comparisons

Burns July 1,2007 July 1, 2008 Change Rate Rate Amount Percent Monthly Energy Usage of 1,000 kWh Customer Charge $5.00 $5.00 $0.00 Energy Charges 134.30 145.00 10.70 Total Bill $139.30 $150.00 $10.70 Monthly Energy Usage of 750 kWh Customer Charge $5.00 $5.00 Energy Charges 100.73 108.75 Total Bill $105.73 $113.75

Burns | - ; cums&— Small Commercial — Rental Office (Single Phase) July 1,2007 July 1, 2008 Change Rate Rate Amount Percent Monthly Energy Usage of 2,226 kWh Customer Charge $5.00 $5.00 $0.00 Energy Charges 308.75 326.11 17.36 Utility Tax 13.33 14.07 0.74 Total Bill $327.08 $345.18 $18.10 Monthly Energy Usage of 3,220 kWh Customer Charge $5.00 $5.00 $0.00 Energy Charges 446.61 471.73 25.12 Utility Tax 19.19 20.26 1.07 Total Bill $470.81 $496.99 $26.18

Burns eu ee Small Commercial — Bank SINCE 1898 | July 1, 2007 Rate Monthly Energy Usage of 2,507 kWh Customer Charge $15.00 Energy Charges 347.72 Utility Tax 15.42 Total Bill $378.14 Monthly Energy Usage of 3,510 kWh Customer Charge $15.00 Energy Charges 486.84 Utility Tax 21.33 Total Bill $523.17 July 1, 2008 Rate $15.00 367.28 16.25 $398.52 $15.00 §14.22 22.49 $551.71 Change Amount $0.00 19.55 0.83 $20.39 $0.00 27.38 1.16 $28.54 Percent

Burns STE Medium Commercial — Bank (Single Phase) July 1, 2007 Change Rate Amount Percent Monthly Energy Usage of 6,240 kWh, Demand of 18.50 kW Customer Charge $5.00 $5.00 $0.00 Demand Charges 180.38 290.45 110.08 Energy Charges 592.80 570.96 -21.84 Utility Tax 33.07 36.82 3.75 Total Bill $811.25 $903.23 $91.98 Monthly Energy Usage of 5,683 kWh, Demand of 25.50 kW Customer Charge $5.00 $5.00 Demand Charges 248.63 400.35 Energy Charges 539.89 519.99 Utility Tax Total Bill

“McDonnell| Large Commercial — Car Dealer July 1, 2007 Rate July 1, 2008 Rate Monthly Energy Usage of 43,000 kWh, Demand of 133.60 kW Customer Charge Demand Charges Energy Charges Power Factor Adjustment Utility Tax Total Bill $15.00 1,302.60 4,085.00 -16.25 229.61 $5,615.96 $15.00 2,097.52 3,934.50 -26.16 257.00 $6,277.85 Monthly Energy Usage of 42,520 kWh, Demand of 146.80 kW Customer Charge Demand Charges Energy Charges Power Factor Adjustment Utility Tax Total Bill $15.00 1431.30 4039.40 -36.56 233.14 $5,682.29 $15.00 2304.76 3890.58 -58.87 263.94 $6,415.41 Change $0.00 794.92 -150.50 -9.92 27.39 $661.89 $0.00 873.46 -148.82 -22.31 30.80 $733.13 Amount Percent 12.90%

Primary — Insurance Company SINCE 1898 | July 1, 2007 July 1, 2008 Change Rate Rate Amount Percent Monthly Energy Usage of 129,000 kWh, Demand of 330.01 kW Customer Charge $10.00 $10.00 $0.00 Demand Charges 3,168.10 3,712.61 §44.52 Energy Charges 12,061.50 11,545.50 -516.00 Power Factor Adjustment 712.37 834.81 122.44 Utility Tax 304.79 305.36 0.57 Total Bill $16,256.76 $16,408.29 $151.53 Monthly Energy Usage of 77,000 kWh, Demand of 300.00 kW Customer Charge $10.00 $10.00 $0.00 Demand Charges 2,880.00 3,375.00 495.00 Energy Charges 7,199.50 6,891.50 -308.00 Power Factor Adjustment 0.00 0.00 0.00 Utility Tax 201.79 205.53 3.74 Total Bill $10,291.29 $10,482.03 $190.74

Transmission July 1, 2007 July 1, 2008 Change Rate Rate Amount Percent Monthly Energy Usage of 1,674,000 kWh, Demand of 2,604.15 kW Demand Charges 16,275.94 27,343.58 11,067.64 Energy Charges 148,316.40 146,475.00 -1,841.40 Power Factor Adjustment 1,946.97 3,270.92 1,323.94 Utility Tax 3,291.85 3,476.37 184.52 Total Bill $169,831.16 $180,565.86 $10,734.70 Monthly Energy Usage of 1,458,000 kWh, Demand of 2,234.00 kW Demand Charges 13,964.06 23,459.63 9,495.56 Energy Charges 129,178.80 127,575.00 -1,603.80 Power Factor Adjustment 1,712.92 2,877.70 1,164.78 Utility Tax 2,862.86 3,020.69 157.84 Total Bill $147,718.64 $156,933.02 $9,214.38

Burns | McDonnell | Electric Rate Adjustment Considerations Discussion and Questions

Selected Area Utilities Summer (June - Sept.) RESIDENTIAL RATE COMPARISON ATTACHMENT #2 (Page 1 of 2) Utility Committee Meeting of 05/27/2008 1,000 kWh % Difference % Difference De Co-op $131.54 0% -11% Newark $137.53 5% 7% Dover $139.48 6% 5% New Castle $139.98 6% 5% Middletown $145.07 10% 1% Seaford $145.19 10% 1% Milford $145.27 10% 1% Delmarva Power $147.17 12% 0% Clayton $152.70 16% 4% Smyrna $155.28 18% 6% Lewes $168.61 28% 15% * Approximate. DP&L's new transmission capacity charge is based on each individual's Peak Load Contribution (PLC) to the overall transmission load. Each customer has a unique PLC that changes every January. Local Utilities - Summer @ 1,000 kWh's As of June 1, 2008 $180.00 $160.00 $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 $131.54 $137.53 $139.48 $139.98 $145.07 $145.19 $145.27 $147.17 $152.70 $155.28 $168.61 De Co-op Newark Dover New Castle | Middletown Seaford Milford Delmarva Clayton Smyrna Lewes Power 800Z/LZ/S0 JO SUSOPY Soy TUMMIOD AVN] (Z JO [ e8ed) 7# LNANHOVLLV

Selected Area Utilities ATTACHMENT #2 (Page 2 of 2) Winter (Oct. - May) Utility Committee Meeting of 05/27/2008 RESIDENTIAL RATE COMPARISON @ 1,000 kWh % Difference % Difference De Co-op $121.95 0% -19% New Castle $132.48 9% -12% Milford $133.53 9% 11% Seaford $136.79 12% -9% Newark $137.53 13% 8% Dover $139.48 14% -7% Middletown $148.24 22% 1% Smyrna $149.28 22% -1% *Delmarva Power $150.16 23% 0% Clayton $152.70 25% 2% Lewes $165.61 36% 10% * Approximate. DP&L's new transmission capacity charge is based on each individual's Peak Load Contribution (PLC) to the overall transmission load. Each customer has a unique PLC that changes every January. Local Utilities - Winter @ 1,000 kWh's As of June 1, 2008 $180.00 $160.00 $140.00 $120.00 $100.00 $80.00 $60.00 $40.00 $20.00 $0.00 $121.95 $132.48 $133.53 $136.79 $137.53 $139.48 $148.24 $149.28 $150.16 $152.70 $165.61 De Co-op New Castle Milford Seaford Newark Dover Middletown Smyrna *Delmarva Clayton Lewes Power (7 J0 Z 88% d) 7# LNANHOVLLV 800Z/LZ/S0 JO SUNSS SoMTUMMIOD ANH]