Attachment

UTILITY COMMITTEE AGENDA JULY 13, 2015 - 5:00 P.M. CITY HALL COUNCIL CHAMBERS 15 LOOCKERMAN PLAZA DOVER, DELAWARE PUBLIC COMMENTS ARE WELCOMED ON ANY ITEM AND WILL BE PERMITTED AT APPROPRIATE TIMES. WHEN POSSIBLE, PLEASE NOTIFY THE CITY CLERK (736-7008 OR E-MAIL AT CITYCLERK@DOVER.DE.US) SHOULD YOU WISH TO BE RECOGNIZED. AGENDA ADDITIONS/DELETIONS 1. NORTH AMERICAN ENERGY SERVICES (NAES) AMENDED AND RESTATED OPERATING AGREEMENT 2. ANNUAL ENGINEERING CONSULTANT'S REPORT ON THE OPERATION AND MAINTENANCE (O & M) OF THE ELECTRIC SYSTEM - FISCAL YEAR 2014 (STAFF RECOMMENDS ACCEPTANCE OF THE REPORT) 3. TEA/NAES REPORT (MAY) (STAFF RECOMMENDS ACCEPTANCE OF THE REPORT) 4. UPDATES (DEFERRED DURING THE MEETING OF JUNE 22, 2015) (COMMITTEE ACTION NOT REQUIRED ON THE BELOW ITEMS) A. GREEN ENERGY FUNDING AND PROGRAMMING B. NATIONAL POLLUTION DISCHARGE ELIMINATION SYSTEM (NPDES) MUNICIPAL SEPARATE STORM SEWER SYSTEMS (MS4) PERMIT C. GARRISON OAK TECHNICAL PARK PROJECT UPDATES C-1. CITY INFRASTRUCTURE C-2. CALPINE ENERGY CENTER C-3. DOVER SUN PARK 5. ADJOURNMENT BY 5:55 P.M. /TM S:\AGENDAS-MINUTES-PACKETS-PRESENTATIONS-ATT&EXH\COMMITTEE-AGENDAS\2015\07-13-2015 UTILITY.WPD THE AGENDA ITEMS AS LISTED MAY NOT BE CONSIDERED IN SEQUENCE. THIS AGENDA IS SUBJECT TO CHANGE TO INCLUDE THE ADDITION OR THE DELETION OF ITEMS, INCLUDING EXECUTIVE SESSIONS.

Engineering Consultant’s Report on the Operation and Maintenance of the Electric System Fiscal Year 2014 City of Dover, Delaware Project No. 85685 06/18/2015

Engineering Consultant’s Report prepared for City of Dover, Delaware Dover, Delaware Project No. 85685 06/18/2015 prepared by Burns & McDonnell Engineering Company, Inc. Kansas City, Missouri COPYRIGHT © 2015 BURNS & McDONNELL ENGINEERING COMPANY, INC.

June 18, 2015 Ms. Donna S. Mitchell, CPA Controller/Treasurer City of Dover 5 East Reed Street Weyandt Hall, Suite 300 Dover, Delaware 19901 Re: Engineering Consultant’s Report Project No. 85685 Dear Ms. Mitchell: In compliance with the requirements of Section 705 and Section 504 of the City of Dover, Delaware Resolution Authorizing and Securing Electric Revenue Bonds, adopted December 23, 1985 (Resolution), Burns & McDonnell presents this Annual Engineering Consultant’s Report on the Operation and Maintenance of the Electric System for the fiscal year ended 2014. This report summarizes our review and assessment of the City of Dover’s (City) Electric System, its existing retail electric rates, its insurance coverage in effect, and its reserve funds. Financial, statistical, and operating data used in preparing the report were initially reported in the City’s annual financial statements and accounting records. Additional information was furnished by City and Electric Division staff. In the preparation of this Engineering Consultant’s Report, Burns & McDonnell completed assessments of the electric generating stations and the transmission and distribution system of the City’s Electric Division. Assessments involved interviews, observations, and review of fiscal year 2014 expenditures and fiscal year 2015 budgets. In addition, an analysis of the balances of the Improvement and Extension Fund as well as other funds supporting the Electric Division was performed. Burns & McDonnell also reviewed the adequacy of revenues provided by current retail rates in relation to the requirements of the Resolution. Finally, a high-level assessment of the City’s insurance coverage related to the Electric Division was completed. Based on these reviews and assessments, it is the opinion of Burns & McDonnell that the Electric System is being operated and maintained, including replacements and upgrades as appropriate, in a manner that is consistent with current electric utility practices. In addition, the current retail rates have provided sufficient revenues to satisfy the debt service coverage requirement in the Resolution. Further, it is the opinion of Burns & McDonnell that the balances in the various reserve funds maintained by the City for the Electric Division are sufficient for their intended purposes. 9400 Ward Parkway \ Kansas City, MO 64114 O 816-333-9400 \ F 816-333-3690 \ burnsmcd.com

We appreciate the cooperation and assistance provided by the City and the Electric Division staff in the preparation of this report. We will be happy to discuss the report with you at your convenience. Sincerely, Burns & McDonnell Ted J. Kelly Principal & Senior Project Manager Business & Technology Services TJK/glb

FY 2014 Engineering Consultant’s Report Table of Contents TABLE OF CONTENTS Page No. 1.0 EXECUTIVE SUMMARY ................................................................................... 1-1 1.1 Introduction .......................................................................................................... 1-1 1.2 Electric System Overview and Assessment ......................................................... 1-1 1.2.1 General Plant ......................................................................................... 1-2 1.2.2 Production Plant .................................................................................... 1-2 1.2.3 Transmission &Distribution Plant ........................................................ 1-3 1.3 Financial Overview and Assessment ................................................................... 1-3 1.4 Conclusions .......................................................................................................... 1-5 2.0 INTRODUCTION ............................................................................................... 2-1 2.1 Purpose of Report ................................................................................................ 2-1 2.2 Organization ......................................................................................................... 2-2 3.0 ELECTRIC SYSTEM OVERVIEW AND ASSESSMENT .................................. 3-1 3.1 Electric System Overview.................................................................................... 3-1 3.1.1 Production Plant .................................................................................... 3-3 3.1.2 Transmission & Distribution Plant ....................................................... 3-3 3.1.3 General Plant ......................................................................................... 3-3 3.2 Production Plant Assessment ............................................................................... 3-4 3.2.1 Production Plant Operations ................................................................. 3-4 3.2.2 McKee Run Condition Assessment ...................................................... 3-8 3.2.3 VanSant Condition Assessment .......................................................... 3-12 3.2.4 Production Plant Conclusion............................................................... 3-13 3.3 Transmission & Distribution Plant Assessment ................................................ 3-13 3.3.1 T&D Plant Operations ........................................................................ 3-14 3.3.2 T&D Plant Condition Assessment ...................................................... 3-18 3.3.3 T&D Plant Conclusion ........................................................................ 3-19 4.0 FINANCIAL OVERVIEW AND ASSESSMENT................................................. 4-1 4.1 Required Revenue ................................................................................................ 4-1 4.2 Electric Rates ....................................................................................................... 4-1 4.3 Operating Results ................................................................................................. 4-2 4.3.1 Adequacy of Electric Rates ................................................................... 4-6 4.4 Status of Revenue Bonds ..................................................................................... 4-7 4.5 Insurance .............................................................................................................. 4-8 4.6 Operating and Reserve Accounts ....................................................................... 4-11 4.6.1 Electric Revenue Fund ........................................................................ 4-11 4.6.2 Electric Improvement and Extension Fund......................................... 4-12 5.0 CONCLUSIONS ................................................................................................ 5-1 City of Dover, Delaware TOC-1 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Table of Contents LIST OF TABLES Page No. Table 3-1: Year-End Plant in Service ...................................................................................... 3-1 Table 3-2: Fiscal Year 2015 On-going/Planned Capital Expenditures.................................... 3-2 Table 3-3: FY 2014 Generating Plant Operating Statistics ..................................................... 3-5 Table 4-1: Annual Sales and Customer Accounts ................................................................... 4-3 Table 4-2: Annual Revenues and Sales Ratios ........................................................................ 4-4 Table 4-3: Revenue Margins and Unaccounted for Energy .................................................... 4-5 Table 4-4: Comparative Statement of Revenues, Expense, ..................................................... 4-6 Table 4-5: Debt Service Coverage ........................................................................................... 4-7 Table 4-6: Debt Service Schedule of Electric Revenue Bonds ............................................... 4-8 Table 4-7: Schedule of Insurance Coverage in Effect ............................................................. 4-9 Table 4-8: Reserve Account Activity and Balances .............................................................. 4-14 City of Dover, Delaware TOC-2 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Table of Contents LIST OF FIGURES Page No. Figure 2-1: Organization ........................................................................................................... 2-3 Figure 2-2: Administration Section ........................................................................................... 2-3 Figure 2-3: Electric Engineering Section .................................................................................. 2-3 Figure 2-4: Electric Transmission & Distribution Section ....................................................... 2-4 City of Dover, Delaware TOC-3 Burns & McDonnell

FY 2014 Engineering Consultant’s Report List of Abbreviations LIST OF ABBREVIATIONS Abbreviation Term/Phrase/Name Burns & McDonnell Burns & McDonnell Engineering Company, Inc. City City of Dover, Delaware DCS distributed control system EDQP Employee Development and Qualification Program EIA U.S. Energy Information Administration FY Fiscal Year GWh gigawatt-hour I&E Fund Electric Improvement & Extension Fund kV kilovolt kW kilowatt kWh kilowatt-hour LAN local area network McKee Run McKee Run Generating Station MW megawatt MWh megawatt-hour NAES North American Energy Services Corporation NERC North American Electric Reliability Corporation NRG NRG Energy Center Ohm standard unit of electrical resistance PJM Pennsylvania New Jersey Maryland Interconnection Report 2014 Engineering Consultant’s Report on the Operation and Maintenance of the Electric System Resolution Resolution Authorizing and Securing Electric Revenue Bonds, adopted December 23, 1985 City of Dover, Delaware i Burns & McDonnell

FY 2014 Engineering Consultant’s Report List of Abbreviations VanSant VanSant Generating Station TEA The Energy Authority, Inc. City of Dover, Delaware ii Burns & McDonnell

FY 2014 Engineering Consultant’s Report Statement of Limitations STATEMENT OF LIMITATIONS In preparation of the Annual Engineering Consultant’s Report on the Operation and Maintenance of the Electric System for the fiscal year ended 2014 (the Report), Burns & McDonnell relied upon information provided by the City of Dover, Delaware (the City). The information included various analyses, computer-generated information and reports, audited financial reports, and other financial and statistical information, as well as other documents such as operating budgets and current retail electric rate schedules. While Burns & McDonnell has no reason to believe that the information provided, and upon which Burns & McDonnell has relied, is inaccurate or incomplete in any material respect, Burns & McDonnell has not independently verified such information and cannot guarantee its accuracy or completeness. In addition, Burns & McDonnell has used the information provided to make certain assumptions with respect to conditions that may exist in the future. While Burns & McDonnell believes the assumptions made are reasonable for the purposes of the Report, it makes no representation that the conditions assumed will occur. City of Dover, Delaware iii Burns & McDonnell

1.0 – EXECUTIVE SUMMARY

FY 2014 Engineering Consultant’s Report Executive Summary 1.0 EXECUTIVE SUMMARY 1.1 Introduction The Fiscal Year 2014 Engineering Consultant’s Report on the Operation and Maintenance of the Electric System (Report) has been prepared in compliance with the requirements of the City of Dover, Delaware Resolution Authorizing and Securing Electric Revenue Bonds, adopted December 23, 1985 (Resolution). Burns & McDonnell was retained as the Engineering Consultant by the City of Dover, Delaware (City) to complete an inspection of the Electric System and prepare a report on findings. The Resolution requires that the Engineering Consultant complete the following: “The City covenants that it will cause the Engineering Consultants employed under the provisions of Section 705 of this Resolution . . . to make an inspection of the Electric System at least once each fiscal year and . . . to submit to the City Manager a report setting forth (a) their findings whether the properties of the Electric System have been maintained in good repair, working order and condition and whether they have been operated efficiently and economically and (b) their recommendation as to (i) the proper maintenance, repair and condition of the Electric System during the ensuing fiscal year and an estimate of the appropriations which should be made for such purposes, (ii) the insurance to be carried under the provisions of Article VII of this Resolution, (iii) the amount that should be deposited during the ensuing fiscal year to the credit of the Improvement and Extension Fund for the purposes set forth in Section 510 of this Article, (iv) the extensions, improvements, renewals and replacements which should be made during the ensuing fiscal year, and (v) any necessary or advisable revisions of the electric rates.” This is the twelfth annual Engineering Consultant’s Report prepared for the City by Burns & McDonnell. 1.2 Electric System Overview and Assessment The Electric Division served a monthly average of 24,165 accounts in fiscal year (FY) 2014, approximately 19,000 of which were residential customers. Five of the Electric Division customers take service from the 69-kV transmission system. These customers include the Dover Air Force Base, Kraft, Proctor & Gamble, White Oak Solar and NRG Energy Center (NRG). NRG is an exempt wholesale City of Dover, Delaware 1-1 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Executive Summary generator that sells power that must be transmitted through the City’s transmission system to third party purchasers. When the NRG plant is not operational, the Electric Division provides power for the plant site. 1.2.1 General Plant General plant facilities consist primarily of Electric Division administrative and operations facilities and pollution control related equipment on McKee Run Generating Station (McKee Run) and VanSant Generating Station (VanSant). Other types of general plant include office furniture and equipment, transportation and power-operated equipment, and communication equipment. Effective July 1, 2011, the City entered into an Energy Management Agreement with The Energy Authority, Inc. (TEA) to assist the City with its energy procurement, energy sale, purchase of fuels, establishment and management of risk policies, and the development and management of hedging protocols and related energy procurement challenges. Headquartered in Jacksonville, Florida, TEA is a non-profit energy manager owned by seven public utility systems operating across the nation. 1.2.2 Production Plant The City owns two generating plants, the McKee Run and VanSant generating stations. McKee Run consists of three steam turbine generating units with a total combined capacity of 136 megawatts (MW). VanSant is a 39 MW simple-cycle combustion turbine unit. NAES Corporation operates the generating plants. The agreement between the City and NAES Corporation has been in effect since July 1, 2006. The various systems and components of the generating plants reviewed by the Engineering Consultant are listed below: Major Equipment  Steam turbines/generators  Boilers and auxiliaries  Station cooling water systems  Fuel handling systems  Water treatment systems  Station electrical systems  Station control systems  General facilities City of Dover, Delaware 1-2 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Executive Summary Management and Organization  Safety  Training  Staffing Based on statements and information provided by the City, as well as the observations and reviews performed, it is the Engineering Consultant’s opinion that the City’s power generation facilities are being operated and maintained consistent with generally accepted electric utility practice in the United States. In general, the performance, operation, maintenance, staff, planning, and training aspects for the McKee Run and VanSant were found to be above average. Specifically, the generation facilities have demonstrated a high level of availability despite the dispatching of the units primarily for peak demand. 1.2.3 Transmission &Distribution Plant The transmission and distribution network includes 44 miles of overhead transmission lines, 0.12 miles of underground transmission lines, 190 miles of overhead distribution lines and 271 miles of underground distribution lines. Five Electric Division customers take service off of the 69-kV transmission system. The following list includes areas of the transmission and distribution system that were considered and reviewed.  System reliability  Power quality  Operations and maintenance  Design standards and specifications  Transmission and distribution improvements It is the Engineering Consultant’s opinion that the design, construction, operation, and maintenance of the City’s electric transmission and distribution system and the associated facilities are consistent with current generally accepted electric utility standards. In recent years, the City has made appropriate upgrades and improvements which the Engineering Consultant has observed while conducting the reviews and assessments to complete the annual reports. 1.3 Financial Overview and Assessment The level of revenues required from the retail electric rates for the Electric Division were determined through the analysis of the financial results and net income or net margins for FY 2014. The Resolution requires that the Electric Division maintain a debt service coverage ratio of 1.25. City of Dover, Delaware 1-3 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Executive Summary Customers of the Electric Division of the City were charged for the electric service they received based on the City’s rate schedules and contracts that were in place in FY 2014. A comprehensive cost-of-service and rate design study was completed in 2006 and subsequent rate analyses were completed in 2007, 2008, 2012, and 2013 to examine revenue requirements and revenue generation. Specifically, the 2006 rate study was conducted to address increased costs associated with a new power supply contract that became effective on July 1, 2006. The rate study recommended combining a number of rate classes and implementing rate increases on July 1, 2006. The 2006 rate study also recommended an additional increase be implemented on January 1, 2007 to cover increased costs associated with operating the generating station. The 2007 and 2008 rate analyses re-examined Electric Division revenues and expenses and recognized additional revisions to power supply costs. As a result of these analyses, additional rate increases were implemented on July 1, 2007, July 1, 2008, and July 2012. The July 2013 rate adjustments established the rate schedules utilized by the Electric Division today. Total energy sales increased from 710.3 GWh in FY 2012 to 723.1 GWh in FY 2013, an increase of 1.8 percent. Total revenue from sales to electric customers in FY 2013 was $88.3 million, representing a decrease of $3.6 million from FY 2012 rate revenue of $91.9 million. In FY 2013, the average revenue per kWh for residential customers was 14.00 cents and the system-wide average price was 12.22 cents per kWh. The Electric Division’s largest cost in providing electric service to its customers is the wholesale cost of power purchased from the Pennsylvania New Jersey Maryland Interconnection (PJM) marketplace through its energy manager, TEA. From FY 2012 to FY 2013, the cost of power increased from $58.9 million to $65.4 million. Net income decreased from $8.5 million in FY 2012 to $6.2 million in FY 2013. The net income decrease in FY 2013 was due in large part to the increase in transfers out of the Electric Revenue Fund. Following is an excerpt from Section 502(c) of the Resolution. “(c) The total amount of the Revenues of the Electric System during the preceding fiscal year shall have been not less than the total of the following: The Current Expenses of the Electric System during the current fiscal years shown by the Annual Budget . . . for such fiscal year, and City of Dover, Delaware 1-4 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Executive Summary One hundred twenty-five percent (125%) of the maximum amount of the Principal and Interest Requirements for any fiscal year thereafter on account of all bonds then Outstanding under the provisions of this Resolution.” The Resolution requires that annual revenues of the Electric Division be no less than the total current expenses plus 125 percent of the greatest remaining annual debt service. The Electric Division achieved debt service coverage ratios for FY 2012, FY 2013, and FY 2014 of 6.64, 6.73, and 3.30, respectively. Therefore, the revenues generated by the current electric rates have been sufficient to meet the applicable covenant of the Resolution. The City maintains a comprehensive insurance program to cover varying types of liabilities, as well as significant losses related to various Electric Division properties. It is the opinion of Burns & McDonnell as Engineering Consultant, and not as insurance counselor, the insurance in full force and affect appears to satisfy the requirements of Section 706 of the Resolution. The City established the Electric Revenue Fund and the Electric Improvement & Extension (I&E) Fund to make moneys available for specific purposes when they are needed. The following is a list of these funds’ respective cash accounts: Electric Revenue Fund  Insurance Reserve Account  Contingency Reserve Account  Electric Rate Stabilization Reserve Account  Interest and Sinking Account Electric Improvement and Extension Fund  Depreciation Reserve Account  Future Capacity Reserve Account The Engineering Consultant reviewed activity information on the accounts listed above and found that the balances in those accounts as of June 30, 2014, were consistent with the required or target balances. 1.4 Conclusions Based on the reviews and assessments completed, it is the opinion of Burns & McDonnell that: City of Dover, Delaware 1-5 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Executive Summary 1. The City’s power generation facilities are being operated and maintained consistent with generally accepted electric utility practice in the United States. 2. The design, construction, operation, and maintenance of the City’s electric transmission and distribution system and the associated facilities are consistent with current generally accepted electric utility standards and over the past few years, the system has been upgraded in order to improve operation and service to customers. 3. The Electric Division capital projects included in the City’s Capital Investment Plan and the FY 2015 Operating Budget are necessary and should provide improved reliability and power quality for the Electric System. 4. The cash balances as of June 30, 2014 for the various accounts maintained by the City for the Electric Division appear to be sufficient for their defined purposes. 5. The insurance coverage in full force and effect as maintained by the City related to the various assets of the Electric Division appears to satisfy the requirements of Section 706 of the Resolution. 6. The electric revenues generated by the City’s current retail rates are more than sufficient to fulfill the debt service coverage requirement (125 percent of current expenses) defined in Section 502(c) of the Resolution. City of Dover, Delaware 1-6 Burns & McDonnell

2.0 – INTRODUCTION

FY 2014 Engineering Consultant’s Report Introduction 2.0 INTRODUCTION The City of Dover, Delaware (City) operates a municipally-owned electric utility system that served 23,354 customers, excluding lighting, within the City and surrounding areas at the end of fiscal year (FY) 2014. The 68 square-mile service area of the electric utility is located in central Delaware; with the City itself located approximately 70 miles south of Philadelphia, Pennsylvania. 2.1 Purpose of Report This FY 2014 Annual Engineering Consultant’s Report (Report) has been prepared in compliance with the requirements adopted December 23, 1985 of the City of Dover Electric Bond Resolution (Resolution). Burns & McDonnell was retained by the City as the Engineering Consultant defined in Section 705 of the Resolution, as follows. “The City covenants that it will, for the purpose of performing and carrying out the duties imposed on the Engineering Consultants under the provisions of this Resolution, employ an independent engineer or engineering firm or corporation having a nationwide and favorable repute for skill and experience in such work.” The required scope of the Report is described in Section 504 of the Resolution, as follows. “The City covenants that it will cause the Engineering Consultants employed under the provisions of Section 705 of this Resolution . . . to make an inspection of the Electric System at least once each fiscal year and . . . to submit to the City Manager a report setting forth (a) their findings whether the properties of the Electric System have been maintained in good repair, working order and condition and whether they have been operated efficiently and economically and (b) their recommendation as to (vi) the proper maintenance, repair and condition of the Electric System during the ensuing fiscal year and a estimate of the appropriations which should be made for such purposes, (vii) the insurance to be carried under the provisions of Article VII of this Resolution, (viii) the amount that should be deposited during the ensuing fiscal year to the credit of the Improvement and Extension Fund for the purposes set forth in Section 510 of this Article, (ix) the extensions, improvements, renewals and replacements which should be made during the ensuing fiscal year, and City of Dover, Delaware 2-1 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Introduction (x) any necessary or advisable revisions of the electric rates.” 2.2 Organization The Electric Utility Director is responsible for the overall management of the Electric Utility Division. Mr. Harry Maloney is the current Electric Utility Director for the Electric Division. The Electric Director oversees the day-to-day operations of the Electric Division and manages the Division’s staff. The Director also provides oversight of the production plant budget, monitors the contracts of the energy coordinator and the power generation operator/manager, and is responsible for North American Energy Services Corporation (NAES Corporation) contracts and oversight. The Electric Division is organized into four separate operating sections. Descriptions of the current Electric Division sections are provided below. Administration Section – Administration provides the overall management of the Electric Division’s Engineering and Transmission & Distribution Sections. This section performs all planning and budgeting, monitors all construction projects, administers all power supply and generating station operations agreements, and coordinates with customer service and public relations for the Electric Division. Electric Engineering Section – Electric Engineering provides design, specifications, construction management, and project inspection for all capital investment projects of the Electric Division. This section also develops and maintains maps, plans, and specifications, as well as engineering standards for construction and maintenance of the Electric System. The group formerly known as the System Operations Section has been reorganized as part of the Electric Engineering Section. This group is responsible for the operation of a 24/7 system operations control center and is comprised of the System Operators Crew Leader and the Operators. Transmission & Distribution Section – Transmission & Distribution constructs, operates, and maintains the overhead and underground electric systems and fiber optic communication facilities. This section installs and maintains all electric metering, as well as street and security lighting. This section also investigates and resolves customers’ power supply problems and oversees the work of tree trimming contractors. Figures 2-1 through 2-3 provide organizational charts illustrating the staffing hierarchies of the various sections in the Electric Division. The number of individuals in each position was indicated as appropriate. Electric Division staff totaled 37 at the time this report was issued. City of Dover, Delaware 2-2 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Introduction Figure 2-1: Organization City Manager Electric Director (1) Administration System Electric Electric T&D (2) Operations (4) Engineering (8) (22) Figure 2-2: Administration Section Administration Administrative Assistant (1) Account Clerk II (1) Figure 2-3: Electric Engineering Section Electric Engineering System Ops. Substation Engineering Electrical Electric Crew Leader Tech Crew Crew Leader Engineer (1) Draftsman (1) (1) Leader (1) (1) Engineering System Substation SCADA Tech Fieldworker Operators (3) Tech (2) (1) (1) City of Dover, Delaware 2-3 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Introduction Figure 2-4: Electric Transmission & Distribution Section Electric Transmission & Distribution Line Crew Superintendent (1) T&D Lineman Crew Electric Meter Groundworker Engineering Leader 1st Tech Crew (2) Coordinator (1) Class (3) Leader (1) Lineman 1st Lineman 2nd Linemand 3rd Electric Meter Class (8) Class (2) Class (3) Tech (1) The subsequent sections of the Report provide a discussion of the required reviews and inspections conducted pursuant to Section 504 of the Resolution. Section 3.0 describes the assessment of the Electric System and its condition. Section 4.0 presents the financial results for the Electric Division, including an analysis of the adequacy of revenues provided by the electric rates. Section 5.0 summarizes the conclusions of Burns & McDonnell regarding the operation and maintenance of the Dover Electric System. City of Dover, Delaware 2-4 Burns & McDonnell

3.0 – ELECTRIC SYSTEM OVERVIEW AND ASSESSMENT

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment 3.0 ELECTRIC SYSTEM OVERVIEW AND ASSESSMENT 3.1 Electric System Overview The Electric System owned by the City primarily consists of a production plant, transmission plant, distribution plant, general plant facilities, and construction work in progress. Table 3-1 displays the year- end balances of the various plant components for FY 2012 through FY 2014. Table 3-2 itemizes the specific capital investment plan projects and anticipated expenditures included in the FY 2015 budget. Table 3-1: Year-End Plant in Service FY 2012 FY 2013 FY 2014 Capital assets, not being depreciated Land $ 1,458,066 $ 1,458,066 $ 1,458,066 Construction in progress 789,014 1,338,909 1,690,462 Total capital assets, non-depreciable $ 2,247,080 $ 2,796,975 $ 3,148,528 Capital assets, being depreciated Buildings $ 17,456,628 $ 17,619,349 $ 17,666,269 Production 64,610,399 65,040,049 65,913,284 Transmission 33,106,748 34,010,686 35,084,087 Distribution 60,680,365 61,752,469 62,388,947 Administration 1,634,017 1,743,754 1,743,754 Vehicles 640,096 625,876 645,747 Total capital assets, being depreciated $ 178,128,253 $ 180,792,183 $ 183,442,088 Less accumulated depreciation for: Buildings $ (11,400,308) $ (11,795,879) $ (12,172,080) Production (41,416,622) (42,682,428) (44,002,794) Transmission (10,344,554) (11,537,017) (12,776,190) Distribution (25,322,267) (26,832,246) (28,382,673) Administration (1,196,545) (1,316,532) (1,427,205) Vehicles (464,219) (481,527) (517,428) Total accumulated depreciation $ (90,144,515) $ (94,645,629) $ (99,278,370) Total capital assets, being depreciated, net 87,983,738 86,146,554 84,163,718 Total capital assets, net $ 90,230,818 $ 88,943,529 $ 87,312,246 In FY 2014, the Electric System experienced a decrease in the annual system peak demand and a decrease in annual energy sales from the previous year. The Electric System experienced its peak at 4 p.m. on July 18, 2013 of 164.2 MW; a decrease of 7.4 MW from the previous year. For the year, 720.9 GWh of energy were sold; a decrease of 0.7 percent from the preceding year. The Electric Division projects energy sales in FY 2015 to total 712.2 GWh, a decrease of 1.2 percent. The Electric Division expects annual energy sales to grow moderately from FY 2016 through FY 2020. City of Dover, Delaware 3-1 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment Table 3-2: Fiscal Year 2015 On-going/Planned Capital Expenditures Production McKee Run & VanSant Preservation of Structures $ 135,800 McKee Run High Energy Piping 26,500 Unit 3 Boiler Systems 138,000 Unit 3 Auxillary System Components 89,000 Unit 3 Turbine Outage - Inspections & Repairs 151,800 Unit 3 Cooling Tower Life Extension 1,091,200 VanSant Capacity Increase 901,900 Metering System Upgrades 90,000 Safety & Compliance Improvements 115,100 Subtotal Electric Generation Division $ 2,739,300 Transmission & Distribution New Developments - UG Transformers $ 87,400 New Developments - UG Conductors/Devices 105,100 West Dover Connector 250,000 Meadows at Jefferson Terrace 15,400 Chestnut Grove Development 299,000 Garrison Oak Technical Park 184,000 Uzin Utz Manufacturing 8,000 Playtex/Energizer System Upgrades 200,000 Clearview Meadows 81,200 Dover Downs Tower 51,600 Leander Lakes 73,000 Eden Hill Lights 17,000 Family Dollar Store 7,500 Meter Replacements & System upgrades 150,000 Vehicles, Trucks, & Equipment 275,000 Subtotal Electric Transmission Division $ 1,804,200 Electric Engineering Substation Battery Replacement $ 24,500 Capitol Park - Underground 27,500 Richardson Circle 400 Chandelle Airport URD 52,900 Townpoint Distribution Upgrades 250,000 Lighting Project and Rehabilitation 50,000 Horsepond Road Substation Reliability Upgrade 468,700 McKee Run & State College Road Feeder replacements 50,000 GOTP Transmission Line Relocation 550,000 Horsepond SS to Cartanza 69kv Rebuild 75,000 69kv Substation Cable Replacement North Street 85,000 General Scott Switchgear 1,137,600 Vehicles, Trucks, & Equipment 28,600 Subtotal Electric Engineering Division $ 2,800,200 Total Planned Capital Investment Projects $ 7,343,700 City of Dover, Delaware 3-2 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment 3.1.1 Production Plant The City owns two plants, the McKee Run and VanSant generating stations. McKee Run consists of three steam turbine generating units with a total combined capacity of 136 megawatts (MW). VanSant is a 39- MW simple-cycle combustion turbine unit. NAES Corporation operates the generating plants. The agreement between the City and NAES Corporation has been in effect since July 1, 2006. The Engineering Consultant’s observations regarding the generating stations and units are described later in this section of the Report. Effective July 1, 2011, the City entered into an Energy Management Agreement with The Energy Authority, Inc. (TEA) to manage the sales associated with the production plants; the Electric Division’s first contract with TEA. TEA also assists the City with its energy procurement, energy sales, purchase of fuels, establishment and management of risk policies, the development and management of hedging protocols and related energy procurement challenges. 3.1.2 Transmission & Distribution Plant The service area includes 44 miles of overhead transmission lines, 0.12 miles of underground transmission lines, 190 miles of overhead distribution lines and 271 miles of underground distribution lines. Five Electric Division customers take service off of the 69-kV transmission system. These customers include the Dover Air Force Base, Kraft, Proctor & Gamble, and NRG Energy Center (NRG). NRG is an exempt wholesale generator that sells power that must be transmitted through the City’s transmission system to third party purchasers. When the NRG plant is not operating the Electric Division provides power for the plant site. The Electric Division has two contracts for providing transmission service through the Electric System. The Electric Division provides transmission service to NRG for the output of its 16 MW electric generator. The Electric Division also has a point-to-point contract for the output of an NRG Combustion Turbine which ties directly to the Kent Substation and is not part of the Dover transmission system. 3.1.3 General Plant The general plant category consists primarily of Electric Division administrative and operations facilities, and pollution control-related equipment at McKee Run and VanSant. The agreement with NAES Corporation stipulates NAES Corporation manage the operation and maintenance of the facilities while the City funds all replacements and upgrades required for maintaining the capability of the two generating stations. The City is also responsible for the costs of compliance with new regulations promulgated. Other types of items included in the general plant category include office furniture and equipment, computer- City of Dover, Delaware 3-3 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment related equipment, transportation and power-operated equipment, and communication equipment. Burns & McDonnell did not specifically assess the items in the general plant category for this Report. 3.2 Production Plant Assessment Burns & McDonnell made observations and conducted assessments of the Electric System assets in support of the development of this annual Engineering Consultant’s Report. On June 4, 2015, Mr. Ted Kelly of Burns & McDonnell met with representatives of NAES Corporation to discuss the condition of the McKee Run and VanSant generating stations. Mr. Kenneth Beard, the Plant O&M Manager, coordinated the visit along with Mr. Don Mordus, the Plant Manager. Mr. Harry Maloney, the Electric Utility Director, attended the meeting as well. The findings of Burns & McDonnell from the assessment of the City’s production plant assets are documented herein. 3.2.1 Production Plant Operations McKee Run consists of three units. Units 1 and 2 were originally coal-fired units, which began operations in 1961 and 1962, respectively. In 1972, these units were converted to burn No. 6 fuel oil. Units 1 and 2 each have rated capacities of 17 MW. Unit 3 began operations in 1975 and was designed to fire No. 6 fuel oil and natural gas. Unit 3 has a rated capacity of 102 MW. In FY 2008, the City began work to convert all three units at McKee Run to burn No. 2 fuel oil in order to reduce pollution from the plant. To date, the necessary upgrades and new equipment had been installed allowing each of the units to burn both natural gas and No. 2 fuel oil. VanSant consists of a simple cycle combustion turbine with a rated capacity of 39 MW. This unit commenced operation in 1991. VanSant remains unmanned, except when it is dispatched into service. On the occasions when the unit is dispatched, personnel from McKee Run are transferred to VanSant to startup and operate the unit. 3.2.1.1 Management and Organization Station management is well organized and knowledgeable. Personnel take a logical approach to the operation and maintenance of the generation facilities. Mr. Don Mordus serves as the Plant Manager. The management/leadership team consists of eight positions including Mr. Mordus’ position. The Administrative Manager, O&M Manager, Compliance Coordinator, and Materials Coordinator, all report directly to Mr. Mordus. (Note: there will be retirements in the leadership team in the next couple of years.) One Operations Supervisor position and one Day Shift Operator position are currently open at the plant. The open Operations Supervisor position is part of the management/leadership team. (Note: Three new operators have been hired in calendar year 2015.) City of Dover, Delaware 3-4 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment The O&M Manager oversees a Maintenance Supervisor and four Operations Supervisors. When fully staffed, each operations team consists of a supervisor and three operators working 12-hour rotating shifts. Two operators work eight-hour flex time shifts Monday through Friday, and fill in as needed. The maintenance team consists of a supervisor and five employees working eight-hour shifts. The operations and maintenance personnel are all union employees. The relationship between the union and management was reported to be excellent. McKee Run is currently at a staff level of 29 employees, with 32 approved positions. 3.2.1.2 Major Equipment Operations and Maintenance In general, the generation facilities appear to have been properly operated and maintained, and in good condition as evidenced by the high availability of the units. The generation facilities are dispatched sparingly and operate primarily as peaking units. As such, the individual units incur a low annual capacity factor. Table 3-3 summarizes the major FY 2014 operating statistics. Table 3-3: FY 2014 Generating Plant Operating Statistics Rated Net Net Heat Capacity - Production - Net Capacity Rate Number of Unit MW kWh Factor Btu/kWh Starts VanSant 39 2,836,509 0.83% 13,582 21 McKee Run Unit 1 17 895,980 0.60% 16,063 7 Unit 2 17 1,442,809 0.97% 14,593 8 Unit 3 102 23,304,093 2.61% 11,841 32 Total 175 28,479,391 1.86% 68 Forced Equivalent Outage Operating Service Availability Unit Hours Hours Factor Factor VanSant - 84.2 0.96% 60.29% McKee Run Unit 1 80.0 135.7 1.55% 59.36% Unit 2 - 228.1 2.60% 60.29% Unit 3 2.0 423.7 4.84% 60.26% Total 82.0 871.7 9.95% 60.04% The large amount of time that units are not operating allows for maintenance and repair of the units. As a result, the FY 2014 overall equivalent availability factor for the generation facilities averaged 60.04 percent. Low net capacity factors are offset by PJM capacity credits. In FY 2014, $15.1 million of PJM capacity credits helped cover the entirety of purchased capacity costs. PJM capacity credits are expected to continue to offset significant portions of system capacity costs in FY 2015 and beyond. City of Dover, Delaware 3-5 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment 3.2.1.3 O&M Management System Maintenance activities are organized, planned, and managed using MP2tm by CMMS Data Group, a computer-based management system. All three major categories of maintenance activities (corrective, preventative, and predictive) are electronically managed by MP2tm. For corrective maintenance activities, any station operator or mechanic can enter a work order into the system at any terminal on the Station local area network (LAN). A supervisor reviews the request, turns it into a work order, and assigns a priority according to a predetermined categorization. The work order is planned, parts are ordered, and then the work order is assigned to an operator or maintenance technician for completion once the material has been received. This system is also used to manage and track preventative maintenance activities that follow a schedule. Changing filters, and turning on and off heat tracing are examples of preventative maintenance. Predictive maintenance activities practiced include oil analyses, vibration testing, and infrared surveys. Portable vibration testing equipment is used at the Stations to improve the frequency of and capabilities to trouble- shoot rotating equipment. The technology allows personnel to identify problems and take corrective actions before equipment failure occurs. 3.2.1.4 Safety “Safety First” is an overall theme and attitude of the Electric Division. Near-miss incidents are documented, reviewed, and corrective follow-up actions are taken as required with an employee-run safety committee actively in place. This committee conducts monthly safety meetings, completes safety equipment inspections, and defines and implements tasks to improve safety in all areas. Members of the safety committee complete periodic visual inspections of employee work activities utilizing an observation checklist to detail their findings. Recorded observations are discussed and infractions corrected. Safety is the first topic discussed at all meetings at the generating plant. An indoctrination video emphasizing safety is shown to all visitors when entering the Station. Mr. Mike Benkert, Senior Project Manager – Safety, reported there were no restricted work days or lost time accidents reported in FY 2014. NAES ended the year with 54,420 man-hours worked with no OSHA recordable accidents. 3.2.1.5 Training The required annual OSHA compliance training is completed and documented for each employee. A formal two-day employee orientation program is required for all new employees. This orientation covers a multitude of subjects from employee benefits to a review of the various Station operating manuals. City of Dover, Delaware 3-6 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment For operator training, the Employee Development and Qualification Program (EDQP) was established prior to 2002. EDQP is a formal program for training operators to progressively advance to positions with additional responsibilities. The training program is a combination of a self-paced and instructor-led learning. In addition to the above programs, cross training of various disciplines also occurs. An example of cross training would be plant operators training with maintenance staff. NAES has made some modifications to the program to make it more applicable to the specific utility. Plant staff receive environmental and safety training online via the GPi Learning website. The training includes tutorials and exams to ensure comprehension of the subject matter. Plant manuals, meetings, etc. offer additional safety training. Plant staff continues to receive appropriate operator certification training for the Pennsylvania New Jersey Maryland Interconnection (PJM) market. This training should continue in the future. The plant also completes planning and scheduling training on a regular basis for plant operators. 3.2.1.6 Capital Improvements The following describes completed, on-going, and planned improvements to the City’s generation assets: Recently Completed (FY 2012- FY 2014):  Industrial Wastewater Discharge System  McKee Run Demineralizer Replacement  McKee Run Natural Gas System Block/Bleed Valves  Unit 3 Fire Protection System  Unit 3 - Stack Repairs  Unit 3 Boiler Air Heater  Unit 3 - Gas Modification  Unit 3 FD & ID Fan Controller Upgrade  Unit 3 DCS Computers & Software Upgrades  Unit 3 Air Heater Expansion Joint  McKee Industrial WW Discharge system  Unit 3 Generator Repairs  Units 1 & 2 Life Extension  Units 1 & 2 Cooling Tower Life Extension  Units 1 & 2 Control Modifications  Units 1 & 2 Stack Repairs City of Dover, Delaware 3-7 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment  Units 1 & 2 Component Repairs  Unit 1 Gasket Leak Repair  Unit 2 - Boiler Inspection & Repair On-Going:  McKee Run & VanSant Preservation of Structures  McKee Run High Energy Piping  Unit 3 Boiler Systems  Unit 3 Auxiliary System Components  Unit 3 Turbine Outage - Inspections & Repairs  Unit 3 Cooling Tower Life Extension  VanSant Capacity Increase  Metering System Upgrades  Safety & Compliance Improvements Planned (through FY 2020):  McKee Run Building Equipment Replacements  Unit 3 Software & Computer Upgrades - CEMS  Unit 3 - Stack Repairs  Unit 3 Cooling Water Line Replacement/Repairs  Unit 3 Hydrogen Purity Analyzers  VanSant Software & Computer Upgrades - CEMS  VanSant Major Overhaul & Inspection  VanSant Component replacements 3.2.2 McKee Run Condition Assessment The following is a summary of the condition assessment of major equipment at McKee Run as presented by the NAES corporation staff. Units 1 and 2 will be decommissioned in 2017; therefore, major maintenance and capital projects have been and will be limited for these units in the near future. Burns & McDonnell made no internal assessments of equipment during the facility tour. XL Insurance completes inspections of the Electric Division production facilities on an annual basis. After each inspection the insurance provider issues a report detailing its risk reduction recommendations. No new recommendations were made this year. City of Dover, Delaware 3-8 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment 3.2.2.1 Steam Turbines/Generators The steam turbines and generators for VanSant and McKee Run Units 1 and 2 were reported to be in satisfactory condition with no major problems. In FY 2012, Unit 1 conducted turbine generator checks and found a bearing steam seal leak. Steam seals were removed and sent out for refurbishment by Siemens Energy Services during the fall 2012 outage. Bearing was inspected and checked for wear. Bearing did have some wear and did not meet acceptable tolerance, so it was sent out for refurbishment by Fusion Babbiting. Turbine condition assessment was conducted during the fall outage and the Units were found to be in satisfactory working condition. During the spring 2013 outage, an extensive inspection and testing was performed on Unit 3’s turbine and generator. The inspection showed signs of seal oil, hydrogen, and busing box leakages. All issues were fixed and brought to acceptable operating standards. During the fall 2013 outage, NAES mechanics installed new hand wheel throttle valve mechanical parts. Thereafter, the IC&E installed a portable vacuum pump to the Unit 1 turbine to simulate vacuum. The turbine was reset and the throttle valve was closed. The throttle valve was then fully opened with no issues and the handle was freewheeling. No inspections, planned maintenance or upgrades were completed on Units 1 and 2 during the 2014 outages. During the spring 2014 outage, Unit 3 was dismantled and inspected. Erosion was detected in some places and steps were taken to mitigate. The unit experienced vibration issues during the startup process, but no cause was found after multiple tests. Vibration issues were no longer experienced during the fall outage. 3.2.2.2 Boilers and Auxiliaries Boiler inspections are conducted every year on each of the boilers. The annual inspections typically include the inspection and cleaning of the major boiler components, including the mud and steam drums, the forced draft and induced draft fans, the windbox, condenser water box, condenser tubes, hotwell, air preheater components, and safety valves. Following its FY 2010 annual inspection of the production facilities, XL Insurance recommended the City implement a program that tracks annual hot and cold settings of hangers in the steam, reheat, feedwater and boiler systems. In FY 2011 and FY 2012, the City met the recommendation by implementing a program that will examine the high energy piping systems on a five-year basis, beginning in 2014. In FY 2012, several principle changes were made on the generating system’s boiler and auxiliary units at McKee Run. New Beck drives were installed on Unit 3 induced draft and forced draft fans. Also, sector City of Dover, Delaware 3-9 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment plates and seals were replaced in the Unit 3 air heater. A leak was detected in a Unit 3 boiler water wall tube due to caustic gouging in 2012. Ultrasonic testing of the boiler tubes is planned during the next major outage in 2018. During FY 2013 inspections, no major issues were found within the Unit 1 or Unit 2 boiler. Unit 3 had an issue during the startup of the boiler while attempting to obtain a boiler purge. The issue was fixed by replacing a Gas Fuel Trip Relay. Waterwall tubing sections were replaced around Unit 3’s A-2 burner throat. During the spring 2014 outage, piping maintenance and replacements earned the most attention at Unit 1 in addition to typical planned inspections and maintenance on all units. Unit 2 repairs were primarily piping focused as well. Ash and debris was cleared from Unit 3 and a leak was found and repaired. No adverse conditions, controls, or operational concerns were reported during the 2014 fall outage at Units 1 and 2. During that outage the neutralization pit liner was replaced, new insulation and lagging was installed on the high energy piping, and leaking tubes were replaced all on Unit 3. 3.2.2.3 Station Cooling Water Systems The Station has split cooling water systems with one system serving Unit 1 and Unit 2 and a separate system serving Unit 3. Projectile tube cleaning was completed on the Unit 1 and Unit 2 condensers during the spring FY 2011 outage. All the tubes in each unit were cleaned utilizing the scraper blade plug method. Samples were taken from the tube cleanings and retained for inspection. No leaks were detected in the expansion joint or condenser tubes. Each condenser box was cleaned. A significant Unit 3 cooling tower project was completed in CY 2014. This project included the change out of a number of columns in the tower, work on the hot deck, and balancing of water flow. The cooling water systems are reported to be sufficiently sized and in satisfactory condition, with no major issues reported at the time of this Report. 3.2.2.4 Fuel Handling Systems Natural gas is delivered to the Station via a 4-inch pipeline for Unit 1 and Unit 2 and in a 10-inch diameter pipeline for Unit 3. No. 2 fuel oil is delivered to the Station by truck and unloaded into tanks. Forwarding pumps deliver the fuel oil to each of the units. No major fuel projects were reported to be completed in FY 2014. 3.2.2.5 Water Treatment/Steam Purity Quality control parameters for boiler feed-water, internal boiler water, cooling tower water, and steam purity are checked at a minimum of twice per day when systems are operating. Results are recorded and City of Dover, Delaware 3-10 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment graphically compared to control limits. Adjustments are then made as required. Boiler feed water is treated city water (well water from the City) using a regenerative ion resin demineralizer system, along with deaeration for oxygen control. Boilers 1 and 2 use a coordinated phosphate control for boiler internal purity control and Boiler 3 uses a balanced trisodium phosphate and disodium phosphate within a narrow pH range. A deep-bored water well was installed to provide water in addition to the City supplied water. City water has a high chlorine level which may exceed the Station permitted limits. By combining City water with the well water, the chlorine levels can be maintained at the permitted limits. Water for cooling tower makeup is also obtained from City water. The primary control parameter is silica concentration. Blow down is adjusted as required to maintain control. The City received an industrial waste water permit from Kent County to be able to discharge cooling water to the sewer system. No major water treatment issues were reported at the time of this Report. Steam purity is not continuously monitored. Samples are taken at least twice daily and tested for pH, conductivity, and silica. There have not been any problems with steam purity. Annual inspections of the boiler drums and separation internals have verified that these systems are intact and operating properly. Following its FY 2010 annual inspection of the production facilities, XL Insurance recommended the City implement lay-up procedures to protect water systems from corrosion. In FY 2011 and FY 2012, NAES worked to update plant procedures to conform to best practices/OSHA standards. In FY 2014, the station did not experience any internal corrosion related failures, steam path deposits, or excessive condenser fouling. Condor Technologies provides water treatment consulting services and chemicals. A representative visits the Station periodically to review test data and check chemical usage rates. No major issues were reported at the time of this Report. 3.2.2.6 Station Electrical Systems Overall, Station electrical systems and transformers are considered to be in satisfactory condition. A condition assessment of the generation facilities’ transformers was conducted in 2014 by TJ/H2b Analytical Services. Oil inspections and analyses were conducted. The inspector recommended that normal operation continue for all the transformers at the plant; however, heating was indicated at two of the transformers. The City has a contract with an environmental consultant to check each substation for oil leaks and to provide instruction on cleaning up in the event of an oil spill. Oil sampling is now completed twice per year on the generator step-up transformers (GSUs). Based on the 2012 XL Insurance annual inspection, there are still no sprinkler protection or blast walls for GSU’s 1-3. In 2012, the city had blast walls installed between Units 1 and 2 auxiliary transformers as City of Dover, Delaware 3-11 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment recommended in the insurance report. This item has since been closed per the insurance company. All plant transformers are examined annually. 3.2.2.7 Station Control Systems Unit 1 and Unit 2 controls are electro-pneumatic. Unit 3 controls are a distributed control system (DCS). Following its 2007 annual inspection of the production facilities, XL Insurance recommended the City seal openings in fire barriers through which cables pass. The City has worked each year since to make progress on sealing openings in fire barriers. The City completed sealing the rest of the openings as part of its boiler controls and control room upgrades in 2013. In general, the station control systems are considered to be in satisfactory condition. The Unit 1 and Unit 2 control systems are outdated but perform satisfactorily. All relays have recently been inspected at both McKee Run and VanSant for North American Electric Reliability Corporation, PJM Interconnection and Mid-Atlantic Area Council compliance. The electro hydraulic control system was modified to become a primary/primary system in 2013. In 2013 additional control wiring was installed to upgrade the Unit 1 and Unit 2 gas control system. No additional controls upgrades or issues to report for FY 2014. 3.2.2.8 General Facilities No major projects or improvements were completed to the General Facilities in FY 2014 other than routine maintenance and repairs. In general, the station facilities appeared clean and well maintained during the site visit. 3.2.3 VanSant Condition Assessment The following is a summary of the condition assessment of major equipment at VanSant as presented by the NAES corporation staff. Burns & McDonnell made no internal assessments of equipment during the facility tour. In general, the unit is operated infrequently, but is well maintained. The VanSant unit has the capability of black starts. The unit is not permitted for remote control. Although the station is only manned when operating, an operator performs a twice daily walk through with a checklist of items to review and the results are logged. XL Insurance completes inspections of the Electric Division production facilities on an annual basis. After each inspection the insurance provider issues a report detailing its risk reduction recommendations. The lone recommendation for VanSant following the FY 2012 inspection addressed safety. XL Insurance City of Dover, Delaware 3-12 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment recommended the installation of gas detection equipment at the plant. A gas detection system has been installed. The gas detectors will activate the fire suppression system and alarm to the central control system. No other major repairs or upgrades were made at VanSant in FY 2013. A capital project was completed on the exhaust stack and the D1 water tank was cleaned in FY 2014. NAES Instrument, Control and Electrical (IC&E) Technicians completed four recommended General Electric Technical Information Letters (TIL) projects for VanSant Unit 11 in the spring 2014 outage as shown below: 1. Annual TIL 1004-2R1 (IGV’s and first stage corrosion/pitting inspection) 2. Annual TIL 1068-2R1 (IGV’s bushing inspection) 3. Annual TIL 1132-2 (IGV thrust washer corrosion inspection) Spring 2014 inspections indicated normal wear on the unit and minor maintenance was completed. During the fall 2014 outage, several minor projects were identified and will be completed at the time of the next major project on the unit. No issues were reported. Every five years, the fuel tanks are inspected for rust and corrosion for leak prevention. The next scheduled inspection is in FY 2015. 3.2.4 Production Plant Conclusion Based on statements and information provided, as well as the observations and reviews performed, it is the opinion of Burns & McDonnell that the City’s power generation facilities are being operated and maintained consistent with accepted electric utility practice in the United States. In general, the performance, operation, maintenance, staff, planning, and training aspects for the McKee Run and VanSant stations were found to be above average. Specifically, the generation facilities have demonstrated a high level of availability despite the dispatching of the units primarily for peak demand. 3.3 Transmission & Distribution Plant Assessment On June 4, 2015, Mr. Ted Kelly visited the City to collect information and to observe the City transmission and distribution system, as operated and maintained by the Electric Division. Mr. Harry Maloney provided information related to the transmission and distribution system. Mr. Maloney also led a tour of the electric transmission and distribution system. City of Dover, Delaware 3-13 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment 3.3.1 T&D Plant Operations The Electric Division distributes power to its customers by a network of transmission lines, distribution substations, and distribution lines. The transmission lines are rated at 69 kV and are connected to fifteen distribution substations located throughout the service area. The distribution substations reduce the power from transmission voltages to the primary distribution voltages of 12 kV to facilitate distribution of electric power to customers. 3.3.1.1 Operations and Maintenance The Electric Division has a SCADA system that is monitored continuously for any problems that may arise in the Electric System. The main control room has two system operator desks and a large screen where system operating information is displayed. System operators can monitor the Electric System operation, such as voltage levels, current flows, etc. and make necessary adjustments as problems arise. The systems operators have received some PJM training, but are not required to be certified as Delmarva Power is the controlling agency. Loading on substation transformers used for an emergency, a switching operation, or maintenance is limited to 120 percent of the rated capacity, followed by a twelve-hour cool-down period. The Electric Division has eight line crews to work on the system. Four crews are responsible for overhead lines, four crews are responsible for underground lines, and one crew is responsible for maintenance. The primary responsibilities of the eight line crews are installation of new service connections and construction of new lines. The trouble crew maintains the street lights, repairs underground services and is the first responder to outages. Tree trimming is contracted out and is no longer performed by the Electrical Division; however, performance of the contractor is monitored by the Line Crew Superintendent. The Substation/Relay Maintenance Division is responsible for operation and maintenance of the substations and associated equipment. Visual inspections of substations, associated equipment, trip counter checks and battery systems checks are performed regularly. The Substation/Relay Maintenance Division is also responsible for contractor oversight during annual transformer condition assessments. TJ/H2b Analytical Services completed the annual transformer condition assessments in February 2011. No abnormal gas was indicated and since the oil condition was within acceptable parameters, TJ/H2b recommended the continuation of normal operation. The City has a contract with an environmental consultant to check each substation for oil leaks and to provide instruction on cleaning up in the event of an oil spill. City of Dover, Delaware 3-14 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment The City contracts with an outside firm to inspect and chemically treat each wood pole in the Electric System every ten years. This is accomplished by awarding a five-year contract to spread out the expenses. Pole treatments were completed in May of 2013. Dover treated and inspected over 760 poles during 2013, of which, only one pole was rejected resulting in a 99.9 percent pass rate. 3.3.1.2 Design Standards and Specifications The Electric Division designs the transmission and distribution circuits and some substation upgrades in conformance with national safety standards. Other substation and transmission design is contracted to Pike Electric, Inc. The underground distribution design utilizes road or alley front access construction. This design means the electrical equipment, such as transformers and underground cable, are installed beside the road instead of behind houses or buildings. The advantage of front access construction is the accessibility for maintenance and repairs to cable and electric equipment. The underground cables are installed in polymerized vinyl chloride pipe for added protection and for easy cable replacement. The Electric Division installs jacketed, concentric cable that is rated at 15 kV, with 133 percent ethylene propylene rubber insulation. The standard overhead distribution design utilizes a flat construction with a single cross-arm and insulators on 45-foot class 2 poles. Typically all electrical equipment locations have ground rods installed with measured readings of 25 ohms or less. The substation design is generally a low-profile rigid bus design. The circuit breakers are SF6 gas-filled and the relays are microprocessor based with SCADA control and monitoring. 3.3.1.3 System Reliability The Electric Division provides for reliability of its distribution system by configuring a majority of its distribution circuits in primary open loop arrangements, improving existing circuits, and installing adequate substation transformer capacity. Normal transformer and line loading are limited to provide sufficient margin to convey firm power requirements during an emergency or a switching operation, or for maintenance. 3.3.1.4 Power Quality The Electric Division does not have any significant power quality problems. The overall power factor for the Electric System is 99.9 percent. Power transformers are equipped with load tap changers that regulate bus voltages at the distribution substations. Distribution transformers are equipped with no-load taps to City of Dover, Delaware 3-15 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment make voltage adjustments. There are capacitors and voltage regulators on the Electric System that control voltage and vars on the portion of the system furthest away from the current source and generation. The system operators monitor the power factor closely and turn on capacitors or adjust the generation to compensate for low power factors. 3.3.1.5 Safety Mr. Maloney reported to Burns & McDonnell the Electric Division had 94.5 hours of lost time in FY 2014 comprised of four incidents. Details of the incidents were not provided for this report. 3.3.1.6 Capital Improvements The following describes completed, on-going, and planned improvements to the City’s transmission and distribution assets: Recently Completed (FY 2012-FY 2014):  Wyoming Avenue - Underground  Pleasonton Acres - Underground  Morris Estates - Underground  Royal Grant - New Underground Service  Dover Downs Switchgear  Lebanon 400 Feeder  Bayside Drive (Persimmon to White Oak Rd)  Distribution System Upgrades - Unidentified  Substation Equipment & Fencing (Division St)  SCADA Master Hardware Replacement  Transmission Line Maintenance Program  Distribution Feeder Replacement Program  Distribution Capacitors - Overhead  69-kV Switch Replacement  McKee Run Transformer/Substation Repairs  Frazier Substation Reliability Upgrade (900 circuits)  Substation PT & CT Replacement Program On-Going:  Substation Battery Replacement City of Dover, Delaware 3-16 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment  Capitol Park - Underground  Richardson Circle  Chandelle Airport URD  Townpoint Distribution Upgrades  Lighting Project and Rehabilitation  Horsepond Road Substation Reliability Upgrade  McKee Run & State College Road Feeder replacements  GOTP Transmission Line Relocation  Horsepond SS to Cartanza 69-kV Rebuild  69kv Substation Cable Replacement North Street  General Scott Switchgear  New Developments - UG Transformers  New Developments - UG Conductors/Devices  West Dover Connector  Meadows at Jefferson Terrace  Chestnut Grove Development  Garrison Oak Technical Park  Uzin Utz Manufacturing  Playtex/Energizer System Upgrades  Clearview Meadows  Dover Downs Tower  Leander Lakes  Eden Hill Lights  Family Dollar Store  Meter Replacements & System upgrades Planned (through FY 2020):  Distribution System Upgrades - Unidentified  Oak Grove Trailer Park Distribution Upgrade  Lakeland Laurel Point - Distribution Upgrade  Rt 8/ Mifflin Road Crossing - Distribution Upgrade  Route 8/Taps - Distribution Upgrade  Townsend Brothers - Distribution Upgrade City of Dover, Delaware 3-17 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment  Persimmon Tree Apartments - Distribution Upgrade  North Street OH to UG (Governors to Queen)  Dover East Estates - Distribution Upgrade  Satellite Synchronized Substation Clocks  Horsepond Road URD - Distribution Feeders  Transmission Line Maintenance Program  Distribution Capacitors - Overhead  Distribution Capacitors - Underground  Frazier Substation Reliability Upgrade (900 circuits)  Dover Air Force Base Substation Relocation  System Automation  DNREC R & R Metering  Public Works Wetland Project  Washington Street Lights  NBR Properties, LLC 3.3.2 T&D Plant Condition Assessment The transmission and distribution system assessment included drive-by observations of a sample of the transmission circuits and distribution circuits. Each of the fifteen substations was physically observed during the tour.  McKee Substation  College Park Substation  Dover Downs Substation  Frazier Substation  VanSant Substation  General Scott Substation  Division Street Substation  Mid-City Substation  Mayfair Substation  St. Joan’s Substation  Cartanza Substation  Horsepond Substation City of Dover, Delaware 3-18 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Electric System Overview and Assessment  Danner Farm Substation  Lebanon Substation  North Street Substation In general, the substations appeared to be in acceptable operating conditions. All battery set in the system substations are less than ten years of age. Mr. Harry Maloney, the Electric Department Director, provided a tour of the substations with Ted Kelly on June 4, 2015. The General Scott Substation has relatively new breakers, and the 12-kV switchgear and controls are scheduled to be upgraded in FY 2016. Horsepond Substation was recently rebuilt which included a three breaker 69-kV system for the 69-kV bus and the substation logic was reprogrammed. Work started in late February 2014 and was completed in November 2014. The Dover Downs Substation added a three breaker system for the 69-kV bus and a direct underground feed to Dover Downs. At the Cartanza Substation, Delmarva has expanded their side of the substation. In the near future, the Lebanon Substation will need work on the capacitor bank. The City has recently completed the process of replacing conductor throughout the entire 69-kV system. In addition, the City has invested heavily in its undergrounding program to increase system reliability. Moving forward, the system will continue to be converted from overhead to underground distribution, but this process has slowed to allow for further evaluation. 3.3.3 T&D Plant Conclusion It is the opinion of Burns & McDonnell that the design, construction, operation and maintenance of the City’s electric transmission and distribution system and the associated facilities are consistent with current generally accepted electric utility standards. In completing Annual Engineering Consultant’s Reports over the past several years, Burns & McDonnell has observed that the City has made appropriate system upgrades and improvements. The City and the Electric Division are proactive in preventative maintenance and expansion of the Electric System before problems arise. City of Dover, Delaware 3-19 Burns & McDonnell

4.0 – FINANCIAL OVERVIEW AND ASSESSMENT

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment 4.0 FINANCIAL OVERVIEW AND ASSESSMENT A review of the financial results of the Electric System for the fiscal year ended June 30, 2014, is provided herein. 4.1 Required Revenue The level of revenues required from the retail electric rates for the Electric Division was determined through the analysis of the financial results and net income or net margins for the most recent fiscal year. The City of Dover, Delaware Resolution Authorizing and Securing Electric Revenue Bonds, adopted December 23, 1985 requires that the Electric Division maintain a debt service coverage ratio of 1.25. The following is an excerpt from Section 502(c) of the resolution. “(c) The total amount of the Revenues of the Electric System during the preceding fiscal year shall have been not less than the total of the following: (3) The Current Expenses of the Electric System during the current fiscal years shown by the Annual Budget . . . for such fiscal year, and (4) One hundred twenty-five percent (125%) of the maximum amount of the Principal and Interest Requirements for any fiscal year thereafter on account of all bonds then Outstanding under the provisions of this Resolution. The City further covenants that, from time to time and as often as it shall appear necessary, it will adjust the electric rates as may be necessary or proper so that the revenues of the Electric System in each fiscal year will not be less than the total of the amounts set forth in subdivision (c) of this section.” 4.2 Electric Rates Customers of the Electric Division are charged for the electric service based on rate schedules, tariffs, or contracts that reflect the costs to the Electric Division of providing that service. For purposes of setting electric rates, customers with similar load and service characteristics should be placed in the same rate classification. A comprehensive cost-of-service and rate design study was completed in 2006 and subsequent rate analyses were completed in 2007 and 2008 to examine revenue requirements and revenue generation. Specifically, the 2006 rate study was conducted to address increased costs associated with a new power supply contract that became effective on July 1, 2006. The rate study recommended combining a number City of Dover, Delaware 4-1 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment of rate classes and implementing rate increases on July 1, 2006. The 2006 rate study also recommended an additional increase be implemented on January 1, 2007 to cover increased costs associated with operating the generating station. The 2007 and 2008 rate analyses re-examined Electric Division revenues and expenses and recognized additional revisions to power supply costs. As a result of these analyses, additional rate increases were implemented on July 1, 2007 and July 1, 2008. The City retained Burns & McDonnell to conduct cost-of-service and rate design study in 2012 followed by an update in 2013. The 2012 study examined revenue adequacy, revenue responsibility, and revenue recovery for the Electric Division. It scrutinized customer classes and proposed adjustments for demand rate components and corresponding changes to energy charges. In May 2013, the City retained Burns & McDonnell to incorporate updated power supply cost projections, and other updates, into the model it developed as part of the 2012 Study. An update to the model and rates analysis was completed in early 2015 to reallocate costs and redesign rates in order to remain regionally competitive. Electric rates are approved by Council on an annual basis. The current rate classes are listed below.  Residential  Small Commercial (1 Phase, 3 Phase, 1 Phase Heating, Church, and Municipal)  Medium Commercial (1 Phase & 3 Phase)  Large Commercial (3 Phase with Reactive Metering)  Primary  Transmission  Outdoor Development Lighting  Private Outdoor Lighting 4.3 Operating Results Table 4-1 presents a summary of the annual energy sales, the average monthly number of customer accounts, and the annual average kilowatt-hour (kWh) energy per customer of the Electric Division for FY 2012 through FY 2014. Annual energy sales were 729.8 GWh in FY 2013, an increase of 1.8 percent from FY 2012. Energy sales decreased to 720.9 GWh in FY 2014, a 1.2 percent decline from FY 2013. City of Dover, Delaware 4-2 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment Table 4-1: Annual Sales and Customer Accounts FY 2012 FY 2013 FY 2014 Energy Sales (kWh) Residential 196,388,942 204,759,680 205,302,701 Commercial 230,814,311 232,220,877 230,178,899 Primary 160,560,686 167,144,717 164,218,197 Transmission 122,563,783 119,003,804 114,470,558 Outdoor Lighting 6,681,804 6,704,350 6,724,400 Total Energy Sales 717,009,526 729,833,428 720,894,755 Average Number of Monthly Customers (accounts) Residential 19,910 19,990 19,900 Commercial 3,355 3,412 3,412 Primary 39 37 37 Transmission 4 4 5 Outdoor Lighting 811 811 811 Total Customers Accounts 24,119 24,254 24,165 Energy Usage Per Customer (kWh/cust./yr.) Residential 9,864 10,243 10,317 Commercial 68,797 68,060 67,462 Primary 4,116,941 4,517,425 4,438,330 Transmission 30,640,946 29,750,951 22,894,112 Outdoor Lighting 8,239 8,267 8,291 Average Usage Per Customer 29,728 30,091 29,832 Table 4-2 presents revenues from sales, revenue per kWh ratios, and average revenue per customer ratios for each revenue classification. Total revenue from sales to electric customers in FY 2014 was $78.2 million, representing a decrease of $10.1 million, or 11.5 percent from FY 2013. Total revenue from sales to electric customers includes utility tax revenue and power cost adjustment revenue. In FY 2014, the average rate revenue per kWh for residential customers was 12.61 cents and the total average rate revenue was 10.85 cents per kWh. The 2014 national average retail prices of electricity to ultimate customers, as published by the US Energy Information Administration (EIA), were 12.50 and 10.45 cents per kWh for residential customers and across all sectors, respectively.1 For a state-wide comparison, the EIA summarized the Delaware 2014 average monthly utility-level retail sales of 1 US Energy Information Administration, Table 5.3. Average Retail Price of Electricity to Ultimate Customer, Data for March 2015, Release Date: May 26, 2015. http://www.eia.gov/electricity/monthly/xls/table_5_03.xlsx (June 11, 2015) City of Dover, Delaware 4-3 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment electricity and associated revenue per kWh to be 13.37 cents per kWh for residential customers and 11.33 cents per kWh across all sectors.2 Table 4-2: Annual Revenues and Sales Ratios FY 2012 FY 2013 FY 2014 Revenue Residential $ 28,112,242 $ 28,200,423 $ 25,882,393 Commercial 31,767,838 29,642,803 25,852,554 Primary 18,056,475 17,809,562 15,619,663 Transmission 12,551,239 11,376,866 9,674,084 Outdoor Lighting 1,460,185 1,301,542 1,158,558 Total Revenue $ 91,947,980 $ 88,331,196 $ 78,187,252 Revenue/kWh Residential $ 0.1431 $ 0.1377 $ 0.1261 Commercial 0.1376 0.1276 0.1123 Primary 0.1125 0.1066 0.0951 Transmission 0.1024 0.0956 0.0845 Outdoor Lighting 0.2185 0.1941 0.1723 Total Revenue/kWh $ 0.1282 $ 0.1210 $ 0.1085 Revenue Per Customer Residential $ 1,412 $ 1,411 $ 1,301 Commercial 9,469 8,688 7,577 Primary 462,987 481,340 422,153 Transmission 3,137,810 2,844,216 1,934,817 Outdoor Lighting 1,800 1,605 1,429 Average Revenue Per Customer $ 3,812 $ 3,642 $ 3,236 The Electric Division’s largest cost in providing electric service to its customers in FY 2014 was the wholesale cost of power. The Electric Division purchased power from the PJM Interconnection marketplace through its Energy Manager, TEA. The cost of non-generated power includes energy and demand costs, power supply management expense, PJM charges and credits, generation fuels cost, and capacity charges and credits. The significance of power supply cost to the Electric Division is illustrated in Table 4-3. The top portion of the Table shows net operating revenue as the difference between total revenues generated by the rates and the cost of power supply.3 The ratios of power supply cost to sales revenues were calculated for FY 2 US Energy Information Administration, Table 5.6.B. Average Retail Price of Electricity to Ultimate Customers by End-Use Sector by State, Year-to-Date through December 2014 and 2013, Data for December 2014, Release Date: February 2015. http://www.eia.gov/electricity/monthly/current_year/february2015.pdf (June 11, 2015) 3 For the purposes of this Report, the phrase “Power Supply” refers to the sum of the costs of power purchased and power generated. This includes plant costs and the cost of fuel. Power Supply also includes any expenses in the CIP City of Dover, Delaware 4-4 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment 2012 through FY 2014. As illustrated, the Electric Division’s power supply cost as a percentage of rate revenue increased from 63.0 percent in FY 2013 to 73.2 percent in FY 2014. Table 4-3: Revenue Margins and Unaccounted for Energy FY 2012 FY 2013 FY 2014 Net Revenue Margins ($) Sales Revenues $ 91,947,980 $ 88,331,196 $ 78,187,252 Power Supply 58,929,133 55,681,251 57,233,726 Net Revenue Margin $ 33,018,847 $ 32,649,945 $ 20,953,526 Net Revenue Ratio 64.1% 63.0% 73.2% Unaccounted for Energy (kWh) Power Supply 738,190,000 752,869,000 762,254,000 Energy Sales 717,009,526 729,833,428 720,894,755 Unaccounted for Energy (Losses) 21,180,474 23,035,572 41,359,245 Percentage 2.9% 3.1% 5.4% Table 4-3 also illustrates the ratio of the amount of energy purchased and delivered to the electric system to total energy sales. This relationship identifies the level of unaccounted for energy in the Electric System. This unaccounted for energy may include energy that was unmetered, metered inaccurately, stolen, lost, PJM transmission line losses, local system line/transformer losses, etc. The bottom portion of Table 4-3 presents these comparisons for the Electric Division for FY 2012 through FY 2014. As shown, the percentage ratio of the unaccounted for energy to the total energy purchased for FY 2014 was 5.4 percent. This is up from 3.1 percent in FY 2013. In previous Annual Engineering Consultant’s Reports, Outdoor Lighting energy was recorded as losses. In this report, Outdoor Lighting customer accounts, energy sales, and revenues were recorded as a separate rate class. The impact this modification has on this Financial Overview and Assessment is most pronounced on the Table 4-3 Unaccounted for Energy analysis, as losses are shown to have decreased from corresponding years in previous reports. Table 4-4 presents a re-creation of the Electric Division’s Statement of Revenues, Expenses, and Changes in Unreserved Retained Earnings for the Electric Revenue Fund for FY 2012 through FY 2014. Net income decreased from FY 2013, totaling -$2.3 million in FY 2014. A decrease in Operating Transfers – Out was based on avoiding the $2.0 million transfer out from the previous year used to finance the Calpine Project which secured a Purchase Power Agreement and Capacity Agreement in light of the decommissioning Units 1 and 2. Fund that are not capital expenses. The phrase “Purchased Power” refers only to the cost of power purchased from the market and other directly associated costs. City of Dover, Delaware 4-5 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment Table 4-4: Comparative Statement of Revenues, Expense, and Changes in Unreserved Retained Earnings FY 2012 FY 2013 FY 2014 Operating Revenues: Charges for Electric Service $ 91,947,980 $ 88,331,196 $ 78,187,252 Miscellaneous Services/Incomes 1,581,421 2,354,497 1,287,501 Total Operating Revenues $ 93,529,401 $ 90,685,693 $ 79,474,753 Operating Expenses: General Administration $ 5,223,149 $ 4,470,795 $ 2,450,884 Power Supply 58,929,133 55,681,251 57,233,726 Transmission/Distribution 3,023,566 3,267,698 3,806,078 Engineering 1,163,379 1,107,231 1,331,909 Metering 205,791 219,010 284,229 System Operations 498,063 544,405 739,406 Utility Tax 1,548,208 1,443,853 1,258,957 Depreciation 4,783,444 4,621,501 4,748,120 Retirees Pension - 1,115,765 975,700 Retiree Health Care 1,015,731 696,500 513,300 Total Operating Expenses $ 76,390,464 $ 73,168,009 $ 73,342,309 Net Operating Income $ 17,138,937 $ 17,517,684 $ 6,132,444 Non-operating Revenues (Expenses) Interest Earned Operating Fund $ 120,876 $ 190,469 $ 2,112 Reserved Funds 348,640 506,771 216,010 Net Increase in Fair Value of Investments 45,200 (614,989) 426,399 Interest and Fiscal Charges (1,283,174) (1,432,779) (1,138,739) Bond Discount Amortized - Gain/(Loss) on Sale of Assets 47,966 5,203 14,439 Total Non-operating Revenues(Expenses) $ (720,492) $ (1,345,325) $ (479,779) Net Income Before Operating Transfers $ 16,418,445 $ 16,172,359 $ 5,652,665 Operating Transfers - In - 8,282 Operating Transfers - Out (7,876,288) (10,000,000) (8,000,000) Total Net Operating Transfers $ (7,876,288) $ (9,991,718) $ (8,000,000) Net Income $ 8,542,157 $ 6,180,641 $ (2,347,335) 4.3.1 Adequacy of Electric Rates The City’s Bond Resolution requires annual revenues of the Electric Division be no less than the total current expenses plus 125 percent of the greatest remaining annual debt service. “Current expenses”, as defined in the Resolution, includes all expenses necessary to maintain and repair the Electric System, all administrative expenses, and engineering, legal or other consultant fees. Transfers to reserve accounts and special purpose funds, and allowances for depreciation are specifically excluded from “current expenses.” City of Dover, Delaware 4-6 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment In order to determine if the City and the Electric Division have met this requirement, the net income shown in Table 4-4 was adjusted to include the interest on bonds, depreciation expense, and other non- cash income and expenses. Table 4-5 summarizes net income adjustments and the calculation of the revenues available for debt service for FY 2012 though FY 2014. Table 4-5: Debt Service Coverage FY 2012 FY 2013 FY 2014 Net Income $ 8,542,157 $ 6,180,641 $ (2,347,335) Plus Excluded Expenses: Operating Transfers - Out $ 7,876,288 $ 10,000,000 $ 8,000,000 Depreciation 4,783,444 4,621,501 4,748,120 Interest and Fiscal Charges 1,283,174 1,432,779 1,138,739 Bond Discount Amortized - - - Gain/(Loss) on Sale of Assets (47,966) (5,203) (14,439) Less Excluded Income: Net Increase in Fair Value of Investments (45,200) 614,989 (426,399) Interest Earned - Reserve Funds (348,640) (506,771) (216,010) Revenues Available for Debt Service $ 22,043,257 $ 22,329,654 $ 10,882,676 Maximum Principal and Interest in Any Year $ 3,401,954 $ 3,401,954 $ 3,344,404 Debt Service Coverage 6.48 6.56 3.25 Minimum Required Debt Service Ratio 1.25 1.25 1.25 As Table 4-5 illustrates, the City and the Electric Division maintained a debt service coverage ratio each year that exceeded the required 125 percent plus current expenses. Therefore, the revenues generated by the current electric rates have been sufficient to meet the applicable covenants of the Resolution. Section 502 of the Resolution requires that the annual debt service used in evaluating the revenues is to be the maximum amount for any fiscal year thereafter. Table 4-6 presents the annual totals of principal and interest amounts due on bonds currently outstanding. The calculation of the debt service coverage ratio in Table 4-5 is based on the total maximum debt service expense in any fiscal year. The FY 2014 calculation was based on the total FY 2015 debt service expense of $3,344,404. 4.4 Status of Revenue Bonds At the end of FY 2014, the City had two series of outstanding electric revenue bonds that were issued pursuant to the Resolution. On July 1, 2008, the City issued $22,200,000 in Electric Revenue Bonds (2008 Bonds). The proceeds from the sale of the 2008 Bonds were used (i) to finance or reimburse the City of Dover, Delaware 4-7 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment City for improvements to the City’s electric system; (ii) to fund a Debt Service Reserve Fund; and (iii) to pay the costs of issuance of the 2008 Bonds. On November 17, 2010, the City issued $8,810,000 of Electric Revenue Refunding Bonds (Series 2010). The proceeds from the sale of the Series 2010 Bonds were used (i) to refund the Series 2004 Bonds, and (ii) to pay the costs of issuance of the Series 2010 Bonds. The non-taxable Series 2010 Bonds received an underlying rating of Aa2 by Moody’s Investors Services and an underlying rating of A+ by Fitch Ratings. Table 4-6 illustrates the debt service schedule for the Series 2008 and 2010 Bonds. The principal and interest and the annual total are shown for each series of bonds. At the time of issuance of the Series 2010 Bonds, the combined outstanding principal balance for both series of bonds was $23,940,000. Table 4-6: Debt Service Schedule of Electric Revenue Bonds 2008 Electric Revenue Bonds 2010 Electric Revenue Refunding Bonds Total Annual Period Principal Interest Debt Service Principal Interest Debt Service Debt Service FY 2015 $ 450,000 $ 953,704 $ 1,403,704 $ 1,810,000 $ 130,700 $ 1,940,700 $ 3,344,404 FY 2016 475,000 930,579 1,405,579 1,890,000 47,250 1,937,250 3,342,829 FY 2017 695,000 901,329 1,596,329 - - - 1,596,329 FY 2018 730,000 865,704 1,595,704 - - - 1,595,704 FY 2019 765,000 831,580 1,596,580 - - - 1,596,580 FY 2020 800,000 798,706 1,598,706 - - - 1,598,706 FY 2021 840,000 763,856 1,603,856 - - - 1,603,856 FY 2022 880,000 726,756 1,606,756 - - - 1,606,756 FY 2023 925,000 686,694 1,611,694 - - - 1,611,694 FY 2024 970,000 644,056 1,614,056 - - - 1,614,056 FY25-34 12,710,000 3,405,972 16,115,972 - - - 16,115,972 Total $20,240,000 $ 11,508,936 $31,748,936 $ 3,700,000 $ 177,950 $ 3,877,950 $35,626,886 4.5 Insurance The City maintains a comprehensive insurance program to insure against varying types of liabilities and significant losses related to various Electric Division properties. Section 706 of the Resolution reads: "The City covenants that it will maintain a practical insurance program, with reasonable terms, conditions, provisions and costs, which the City Manager determines, with the approval of the Engineering Consultants, will afford adequate protection against loss, including loss of Revenues, caused by damage to or destruction of the Electric System or any part thereof and also comprehensive public liability insurance on the Electric System for bodily injury and property damage in such amounts as may be approved by the Engineering Consultants.” City of Dover, Delaware 4-8 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment Table 4-7 summarizes itemized insurance coverage procured by the City for the period July 1, 2014, through June 30, 2015. Burns & McDonnell has reviewed this list of insurance, and in the opinion of Burns & McDonnell, as Engineering Consultant and not as insurance counselor, the insurance in full force and affect appears to satisfy the requirements of Section 706 of the Resolution. Table 4-7: Schedule of Insurance Coverage in Effect July 1, 2014 - Starr Technical Risks Agency June 30, 2015 Coverage Property Earth Movement -Per Occurrence and in the $20,000,000 Annual Aggregate, except Earth Movement in High Hazard Earth Movement EXCLUDED Zones; Earth Movement in California; EXCLUDED Flood -Per Occurrence and in the Annual 10,000,000 Aggregate; Accounts Receivable; 100,000 Business Interruption; EXCLUDED Contingent Time Element Coverage; EXCLUDED Debris Removal (or 25% of Direct Property Loss, whichever the greater); 2,500,000 Demolition and Increased Cost of Construction; 10,000,000 EDP Media; 1,000,000 Errors and Omissions; 2,000,000 Expediting Expense; 1,000,000 Extra Expense, excluding replacement power or increased cost of generation, 2,000,000 transmission and/or distribution of electricity, water or natural gas; Fire Department Service Charges and Extinguishing Expenses; 500,000 Hazardous Substances -Per Occurrence and in the Annual Aggregate; 500,000 Inland Transit; 2,500,000 Newly Acquired Locations -90 Days reporting; 1,000,000 Personal Property Temporarily Off Premises; 100,000 Course of Construction; EXCLUDED Miscellaneous Unnamed Locations (except perils of Flood, Earth Movement and 500,000 Valuable Papers and Records; 100,000 Deductibles All deductibles listed below are per occurrence except with respect to coverage provided under the Boiler & Machinery which shall be any One Accident. In respect of Damage to Insured Property: $750,000 per Occurrence, except; $100,000 per Occurrence as respects Transit. In respect of Time Element loss (Extra Expense): 45 days per Occurrence, except; 72 hours per Occurrence in respect of Service Interruption. City of Dover, Delaware 4-9 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment July 1, 2014 - XL Insurance June 30, 2015 Coverage Property per Occurrence and in the Annual Aggregate in respect of Flood; $ 10,000,000 per Occurrence and in the Annual Aggregate in respect of Earth Movement, 20,000,000 Excluded. per Occurrence and in the Annual Aggregate applicable in High Hazard Movement zones; per Occurrence and in the Aggregate in respect Hazardous Substance; 500,000 per Occurrence in respect of Business Interruption; EXCLUDED per Occurrence in respect of Accounts Receivable; 100,000 per Occurrence in respect of scheduled, direct Contingent Time Element; EXCLUDED per Occurrence in respect of Incidental Course of Construction; 5,000,000 (or 25.00% of the direct physical loss, whichever greater) per Occurrence in 2,500,000 respect of Debris Removal; per Occurrence in respect of Demolition and Increased Cost of Construction; 10,000,000 per Occurrence in respect of Electronic Data Processing Media; 1,000,000 per Occurrence in respect of Errors and Omissions; 2,000,000 per Occurrence in respect of Expediting Expense; 1,000,000 per Occurrence in respect of Extra Expense excluding replacement power of 2,000,000 increased cost of generation, transmission and/or distribution of electricity, water or natural gas; per Occurrence in respect of Fire Department Service Charges and 500,000 Extinguishing Expenses; per Occurrence in respect of Newly Acquired Locations (ninety (90) days 1,000,000 reporting); per Occurrence in respect of property in Course of Inland Transit; 2,500,000 per Occurrence in respect of Miscellaneous Unnamed Locations, except: 500,000 Excluded. per Occurrence in respect of Flood; Excluded. per Occurrence in respect of Earth Movement; Excluded. per Occurrence in respect of Named Storm; per Occurrence in respect of Valuable Papers and Records; 100,000 per Occurrence in respect of Personal Property Temporarily Off Premise. 100,000 Deductibles / Retentions Application of Deductibles as described in Policy form unless otherwise indicated in Policy Form Revisions Section, if applicable. In respect of Damage to Insured Property: $750,000, Per Occurrence, except; $100,000, per Occurrence as respect Transit; In respect of Time Element loss (Extra Expense): 45 days per Occurrence except; 72 hours Per Occurrence in respect of Service Interruption City of Dover, Delaware 4-10 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment 4.6 Operating and Reserve Accounts The Electric Revenue Fund and the Electric Improvement & Extension (I&E) Fund are the City’s two funds devoted to the Electric Division. The funds are used to manage cash and transactions related to utility operations and capital expenditures, respectively. Each fund includes certain cash accounts established to make moneys available for specific purposes when they are needed. The accounts maintained within the Revenue and I&E Funds are listed herein. Electric Revenue Fund  Insurance Reserve Account  Contingency Reserve Account  Electric Rate Stabilization Reserve Account  Interest and Sinking Account Electric Improvement & Extension Fund  Depreciation Reserve Account  Future Capacity Reserve Account The following are descriptions of each Fund, their respective accounts and their purposes. 4.6.1 Electric Revenue Fund The Electric Revenue Fund was established in Section 503 of the Resolution. All revenues are to be deposited into the Electric Revenue Fund when received. Current expenses are to be paid and other accounts are to be maintained from the Electric Revenue Fund. Moneys are transferred from the Electric Revenue Fund to the Electric Rate Stabilization Reserve Account, the Interest and Sinking Account, the I&E Fund, the Depreciation Reserve Account, and the Future Capacity Reserve Account. 4.6.1.1 Insurance Reserve Account The Insurance Reserve Account was established by the City to fund insurance deductibles in the event of loss(es) covered by the City’s insurance policies then in effect. The target minimum balance in the Insurance Reserve is $350,000. The reserve balance at the end of FY 2014 was $737,543. In an effort to reduce insurance premiums, the City approved raising the minimum reserve balance to $750,000 in 2014. The new minimum balance will be in force in FY 2016; achieved by the accumulation of interest earnings and a $10,000 appropriation. City of Dover, Delaware 4-11 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment 4.6.1.2 Contingency Reserve Account The Contingency Reserve Account was established by the City in FY 2003 to provide for unplanned expenditures that may not be avoidable. The City’s Financial Policies require that a minimum balance be maintained in the Contingency Reserve Account equal to 1.0 percent of the current year revenues for the Electric Revenue Fund. The FY 2014 year-end balance was $819,136, which is equal to 1.03 percent of the FY 2014 revenues for the Electric Revenue Fund. 4.6.1.3 Electric Rate Stabilization Account The Electric Rate Stabilization Reserve Account was established in FY 2005 to offset the costs of the power cost adjustment to the customers of Dover. The account’s target balance is a minimum of 3.0 percent, not to exceed 10.0 percent, of purchased power cost in any given year. Any excess of this amount will be refunded to customers in future years by reducing the rate of the power cost adjustment. The account’s FY 2014 end-of-year balance was $10,465,824, which was 20.4 percent of the FY 2014 purchased power cost. 4.6.1.4 Interest and Sinking Account The Interest and Sinking Account was established in Section 507 of the Resolution. This account consists of two restricted accounts: the Bond Service account and the Reserve Account. The Bond Service Account is funded with equal monthly transfers from the Electric Revenue Fund such that the balance, as of each payment date for interest or for principal and interest, will be equal to the amount of the payment due. The payments of principal and interest due on bonds are made from the Bond Service Account. The Reserve Account is funded by transfers from the Electric Revenue Fund, as necessary, to maintain a balance equal to the maximum combined principal and interest for any future fiscal year through the life of all bonds then outstanding. Moneys in the Reserve Account are used for paying interest on and principal of bonds when the balance in the Bond Service Account is insufficient for making those payments. Excess moneys in the Reserve Account are also used towards paying current interest payments. The total amount in the Restricted Accounts for the 2008 and 2010 bonds as of June 30, 2014, was $3,529,445. 4.6.2 Electric Improvement and Extension Fund The I&E Fund was established in Section 507 of the Resolution. Funds are transferred to the I&E Fund from the Electric Revenue Fund to the extent that the amount of funds available from the Electric Revenue Fund exceeds the total of the amounts required to be added to the Interest and Sinking Account. The I&E Fund also receives additional funding from the Depreciation Reserve Account, the Future Capacity Reserve Account, and from development receipts. Section 510 of the Resolution indicates that, City of Dover, Delaware 4-12 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment except for certain situations, moneys held in the I&E Fund are to be used only for payment of costs of unusual maintenance or repairs, renewals or replacements, obtaining or replacing equipment, constructing extensions, additions, or improvements, and engineering expenses related to the foregoing activities. 4.6.2.1 Depreciation Reserve Account The Depreciation Reserve Account represents moneys that have been set aside for the sole purpose of funding renewals and replacements of the Electric System as components or equipment wear out, deteriorate, or otherwise become unsuitable for the intended purpose. Transfers from the Electric Revenue Fund and investment earnings are the only sources of additional moneys for the Depreciation Reserve Account. Transfers to the I&E Fund are made as necessary to fund capital projects. The target appropriation for the Depreciation Reserve Account each year is the excess of depreciation expense for the year over the amount of principal included in debt service payments made during the year. The reserve balance at the end of FY 2014 was $9,915,104. 4.6.2.2 Future Capacity Reserve Account The Future Capacity Reserve Account was established to set aside and accumulate funds from the Electric Revenue Fund for use in evaluating and pursuing activities related to the Electric Division’s alternatives for power supply resources for future demand for electricity. The target balance for this reserve is $10,000,000. The reserve balance at the end of FY 2014 was $10,064,390. Table 4-8 presents FY 2012 through FY 2014 year-end summaries of the activity within the cash accounts described above. The Insurance Reserve Account, the Contingency Reserve Account, the Electric Rate Stabilization Reserve Account, and the Interest and Sinking Account are accounts within the Electric Revenue Fund. The Depreciation Reserve Account and the Future Capacity Reserve Account are accounts within the I&E Fund. City of Dover, Delaware 4-13 Burns & McDonnell

FY 2014 Engineering Consultant’s Report Financial Overview and Assessment Table 4-8: Reserve Account Activity and Balances Insurance Contingency Electric Rate Bond Depreciation Future Reserve Reserve Stabilization Reserve Reserve Capacity Account Account Account Account Account Account Year Ended June 30, 2012 Balance in Account on July 1 $ 403,334 $ 1,056,788 $ 6,160,167 $ 3,519,376 $ 10,412,221 $ 9,178,771 Receipts Interest Earned 4,661 14,026 69,966 3,443 129,837 126,711 Appropriations - - 5,000,000 3,370,068 - - Total Funds Available $ 407,995 $ 1,070,814 $ 11,230,133 $ 6,892,886 $ 10,542,058 $ 9,305,482 Disbursements Debt Service Payments - - - (3,370,054) (500,000) - Transfer to Capital Projects/Ops. (70,730) - (1,000,000) - (300,000) 500,000 Balance in Account on June 30 $ 337,265 $ 1,070,814 $ 10,230,133 $ 3,522,833 $ 9,742,058 $ 9,805,482 Year Ended June 30, 2013 Balance in Account on July 1 $ 337,265 $ 1,070,814 $ 10,230,133 $ 3,522,833 $ 9,742,058 $ 9,805,482 Receipts Interest Earned 10,178 16,022 151,991 3,224 172,146 153,208 Appropriations 385,600 - 12,400,000 3,375,534 - 2,100,000 Total Funds Available $ 733,043 $ 1,086,836 $ 22,782,124 $ 6,901,591 $ 9,914,204 $ 12,058,690 Disbursements Debt Service Payments - (272,600) - (3,375,534) (58,500) (54,500) Transfer to Capital Projects/Ops. - - (5,400,000) - - (2,000,000) Balance in Account on June 30 $ 733,043 $ 814,236 $ 17,382,124 $ 3,526,057 $ 9,855,704 $ 10,004,190 Year Ended June 30, 2014 Balance in Account on July 1 $ 733,043 $ 814,236 $ 17,382,124 $ 3,526,057 $ 9,855,704 $ 10,004,190 Receipts Interest Earned 4,500 4,900 83,700 3,388 59,400 60,200 Appropriations - - - 3,391,860 - - Total Funds Available $ 737,543 $ 819,136 $ 17,465,824 $ 6,921,305 $ 9,915,104 $ 10,064,390 Disbursements Debt Service Payments - - - (3,391,860) - - Transfer to Capital Projects/Ops. - - (7,000,000) - - - Balance in Account on June 30 $ 737,543 $ 819,136 $ 10,465,824 $ 3,529,445 $ 9,915,104 $ 10,064,390 City of Dover, Delaware 4-14 Burns & McDonnell

5.0 – CONCLUSIONS

FY 2014 Engineering Consultant’s Report Conclusions 5.0 CONCLUSIONS In the preparation of this Engineering Consultant’s Report, Burns & McDonnell completed assessments of the electric generating stations and the transmission and distribution system of the City Electric Division. The investigations included interviews, observations, and reviews of FY 2014 expenditures and FY 2015 budgets. In addition, an analysis of the balances of the Improvement and Extension Fund and other funds benefiting the Electric Division was performed. Burns & McDonnell also reviewed the adequacy of the revenues provided by the current retail rates in relation to the requirements of the City of Dover, Delaware Resolution Authorizing and Securing Electric Revenue Bonds, adopted December 23, 1985. A high level assessment of the City’s insurance coverage related to the Electric Division was also completed. Based on these reviews and assessments, it is Burns & McDonnell’s opinion that: 1. The City’s power generation facilities are being operated and maintained consistent with accepted electric utility practice in the United States. 2. The design, construction, operation, and maintenance of the City's electric transmission and distribution system and the associated facilities are consistent with current generally accepted electric utility standards and over the past few years. The system has been upgraded in order to improve operation and service to customers. 3. The Electric Division capital projects included in the City’s Capital Investment Plan and the FY 2015 Operating Budget are necessary and should provide improved reliability and power quality for the Electric System. 4. The balances as of June 30, 2014 for the various reserve funds maintained by the City for the Electric Division appear to be sufficient for their defined purposes. 5. The insurance coverage in full force and affect as maintained by the City related to the various assets of the Electric Division appears to satisfy the requirements of Section 706 of the Resolution. 6. The electric revenues generated by the City’s current retail rates are more than sufficient to fulfill the debt service coverage requirement defined in Section 502(c) of the Resolution. City of Dover, Delaware 5-1 Burns & McDonnell

Burns & McDonnell World Headquarters 9400 Ward Parkway Kansas City, MO 64114 O 816-333-9400 F 816-333-3690 www.burnsmcd.com

Monthly Management Committee Update – May 2015 June 25th 2015 Prepared by: Arline Holloway Client Services Manager 904.360.1347 aholloway@teainc.org

TABLE OF CONTENTS I. Executive Summary 1 II. Budget Report 12 III. Operations Management 15 IV. Appendix 29 i

I. Executive Summary a. Power Supply Summary: Overall Power Supply costs were $339,478 below budget predominantly driven by lower Energy, Congestion and Losses, and lower ARR, Transmission and Fees. Dover’s budgeted cost for all power supply (capacity AND energy) was $70.09/MWh. The actual cost of all power supply (capacity AND energy) was $60.93/MWh. There was a positive $9.17 budget variance despite the load variance. The cost of energy alone was $41.86/MWh, versus a budgeted energy cost of $46.71. Dover’s hedge purchases totaled 43,600 MWh, which was 70% of the actual load. The budgeted hedge purchase totaled 39,592 MWh which was 67% of the budgeted load. Dover’s power purchases from hedge transactions totaled $1,927,925. Purchases from PJM (energy and fees) totaled $1,468,592.00. This number includes DA spot market energy charges of $617,113.66 and Day‐ahead Transmission Congestion credit of ($225,374.14) Dover’s total load was 62,154 MWh versus a forecasted load of 58,869 MWh. Dover’s planned energy purchase from the SunPark solar installation was 1,927 MWhs. Dover’s actual energy purchase from the SunPark installation was 2,321 MWh. 2

I. Supply Source Summary: II. Supply Variance: 3

b. Generation Summary: Net generation revenue for the month of May was $474,569 versus a budget of $258,314. 4

Generation Breakdown: City of Dover Monthly Wholesale Generation Formula May 2015 Net Generation 399.23 Production Margin PJM ‐ Generation Economic and Reliability Dispatch $ 12,374.79 A Natural Gas & Oil Consumption Purchases for Generation $ (24,069.00) Natural Gas Transport $ ‐ Eastern Shore Cashout $ (7,827.82) Oil Consumption $ ‐ Subtotal: Natural Gas & Oil Consumption $ (31,896.82) B Gross Production Margin $ (19,522.03) C = (A + B) $/MWh Generation Production Gross Margin $ ‐ E = (C/D) PJM ‐ Capacity Generation Capacity Credit $ 725,758.98 Reactive Supply and Transmission Losses $ (78,644.59) Subtotal: PJM ‐ Capacity $ 647,114.39 F All in Generation Margin All in Generation Margin Total $ 627,592.36 (G = C + F) 5

c. Emissions Summary: Emissions Allowance Summary through May 31, 2015 The reinstated Cross-State Air Pollution Rule (CSAPR) replaced the Clean Air Interstate Rule (CAIR) beginning January 1, 2015. The final CAIR true-ups for 2014 will occur in 2015, after which CAIR allowances will have no value. The State of Delaware was included in the CAIR footprint but is not included in the CSAPR footprint. CAIR allowances cannot be used for CSAPR compliance, so Dover’s CAIR allowances essentially became valueless when CSAPR was reinstated. The separate Clean Air Act acid rain deposition control program (CAA Title IV) which governs SO2 national allowance trading program will remain in effect, however the CAIR provisions for SO2 are no longer applicable to Dover’s generating units. Market liquidity for Title IV SO2 allowances is very low, with few transactions occurring. The following table shows estimated values for Dover’s banked allowances, based on mid-point of bids and offers from Evolution Markets. Beginning with the January 2015 report, TEA no longer includes a CAIR summary. It will continue to report on Dover’s Clean Air Act Title IV SO2 allowances. Market Value for Clean Air Act Title IV Allowances Commodity $/Ton Tons Market Value ICE Settlement as of May SO2 Allowances – Title IV $0.375 15,018 $ 5,632 TOTAL $ 5,632 Regional Greenhouse Gas Initiative The State of Delaware is a participant in the Regional Greenhouse Gas Initiative (RGGI). The City of Dover must comply with RGGI by surrendering carbon dioxide (CO2) allowances pursuant to the State of Delaware’s laws (Title 7, Chapter 60, Sub-Title II-A). Delaware adopted a combined emissions allowance allocation/auction mechanism for RGGI, in which 40% of CO2 allowances were allocated to sources for 2009, declining by 8% per year so that by 2014, all CO2 allowances are auctioned. Dover had more than a sufficient number of RGGI allowances allocated to it to cover its requirements through the first compliance period (calendar years 2009-2011) and second compliance period (2012 – 2014). Any unused allowances are carried over (“banked”) for subsequent years. The table below includes Dover’s historical activities, and has been enhanced to include projections through 2020. Two projections are presented: (1) future annual emissions equal the average for 2009 – 2014, and (2) future annual emissions equal to the highest emissions for 2009 – 2014. 6

Dover, DE RGGI Allowance History and Forecast - May 31, 2015 CO2 Tons EOY Historical CO2 Tons CO2 Tons Projected EOY Compliance CO2 Allowances Allocated CO2 Projected EOY Emitted - Allowance Emitted - Proj. Emitted - Proj. Balance Year (CY) Purchased Allowances Balance (High) Historical Balance (Avg) (High) (Average) 2009 62,184 5,796 56,388 2010 49,747 32,971 73,164 2011 37,311 17,763 92,712 2012 27,983 15,957 104,738 2013 24,818 10,213 119,343 2014 1,000 N/A 25,426 94,917 94,917 94,917 2015 10,000 N/A 2,579 102,338 18,021 33,000 86,896 71,917 2016 N/A 18,021 33,000 68,875 38,917 2017 N/A 18,021 33,000 50,854 5,917 2018 N/A 18,021 33,000 32,833 ‐27,083 2019 N/A 18,021 33,000 14,812 ‐60,083 2020 N/A 18,021 33,000 ‐3,209 ‐93,083 Dover RGGI Allowance History and Projection May 31, 2015 (Includes 4,000 Allowances procured in June 3, 2015 Auction) 150,000 100,000 Tons of CO2 50,000 0 ‐50,000 ‐100,000 Historical CO2 Emissions Projected CO2 Emissions ‐ Avg CO2 Tons Emitted ‐ Proj. (High) EOY Historical Allowance Balance Projected EOY Balance (Average) Projected EOY Balance (High) 7

The table and chart indicate that Dover could run out of banked allowances as early as the end of 2016 under the high emissions scenario and by the end of 2019 under the average scenario. Therefore, Dover has recently initiated a program to participate in RGGI’s quarterly auctions to insure it has adequate allowances in the future. In anticipation of needing additional RGGI allowances in the future, Dover participated in Auction 26 held on December 3, 2014, Auction 27 held on March 11, 2015 and Auction 28 held on June 3, 2015. It was awarded 1,000 allowances from its highest price bid, at the auction clearing price of $5.21/ton in Auction 26 and 6,000 allowances in Auction 27 at the auction clearing price of $5.41/ton and 4,000 allowances in Auction 28 at the auction clearing price of $5.50/ton. The next quarterly RGGI auction will be held on September 9th, 2015. Based on the June 18, 2015 ICE price for the July 2015 strip ($5.66/ton), the estimated market value of Dover’s existing 102,338 ton1 RGGI allowance bank is $579,233. Renewable Energy Certificates Dover owns two photovoltaic systems totaling 15 kW, consisting of (one 5 kW unit at the Utilities Administration Building and two 5 kW units at the McKee Run generating station. Dover also receives solar energy produced by the 10 MW Dover Sun Park which is owned by White Oak Solar Energy, LLC. In addition to the all of the physical energy produced by the Sun Park, Dover receives 15% of Sun Park’s Solar Renewable Energy Credits (SRECS). Dover participates in the Delaware Municipal Electric Corporation’s (DEMEC) Renewable Portfolio Standard (RPS) for compliance with the State of Delaware’s RPS laws applicable to municipal utilities. The first compliance period under DEMEC’s RPS was for the 36 months ending May 2014. Through the end of May, 2015, Dover had accumulated a total of 7,207 SRECS from these renewable energy resources, net of 2,941 SREC transferred to DEMEC for retirement on October 3, 2014 in accordance with the RPS requirement for the first compliance period. Delaware periodically holds SRECs auctions, however these auctions are for size tiers N1 – N3, E1 and E2. The Dover Sun Park is in the N4 tier for very large facilities. State-wide carve outs for Tier 4 has been fully subscribed, so there is not a market for tier T4 SRECs in Delaware. The nearest viable market for Dover’s SRECs is Pennsylvania. Daily settlement prices from Flett Exchange Environmental Services and SREC Trade. The most recent settlement prices for Pennsylvania SRECS are used in the table below. SREC Vintage Market Clearing Price SREC Balance Market Value (June 1 – May 31) 2012/2013 $22.00 2,172 $47,850 2013/2014 $25.00 2,701 67,525 2014/2015 $28.00 2,334 65,352 TOTAL 7,207 $180,727 1 May 2015 CO2 emissions were not deducted for this report. They will be included in future reports. 8

TEA continues to recommend to Dover to retain these allowances for compliance with its Renewable Portfolio Standard (RPS). Additionally, Dover will need to acquire additional SRECs in future years. d. Operations Management Summary: Executive Summary: During the month of May, there were no reportable lost time accidents, although one of our employees was injured April 16th, while moving a waste oil drum into the used oil storage shed while awaiting shipment. The facility has gone 45 days without an OSHA recordable accident and 146 consecutive days without a lost time accident. There were no Environmental Notice of Violations or exceedances issued during the month and there was one Near Miss reported. All units are currently in a planned outage through May 29th at which time all will be made available with only optimization and commissioning testing remaining on unit 11, for the Inlet Fogging System that was installed during the spring outage. Monthly Budget Variance – The actual expenses attributable to O&M of the two sites for the month of April are $310,313 against a budgeted amount of $628,031 for a favorable variance of $317,718 or 50.59%. The principal reasons for the favorable variance were due to; a favorable monthly variance of $218,540 was due to having a less than full complement of staff and only (2) payroll periods being invoiced against three (3) that were budgeted for May. As a result, this impacted three (3) labor accounts – Straight Time, Overtime, and Labor Burdens. A favorable monthly variance of $5,026 was due to lower water – sewer costs than anticipated and deferring a portion of buildings and grounds maintenance to June. A favorable monthly variance of $94,152 due to no monthly electricity bill. It was expensed in April. In addition, the expenses for safety valve testing were not included in May as anticipated. The testing should be completed in June. The forecasted expenses for this fiscal year are $5,950,306 expensed versus an approved budget of $6,141,100 thereby realizing a 96.89% expenditure rate. e. Risk Management Summary: Forward power prices in PJM have increased from last month. The current projected cost of service is below: Monthly Blended Cost Change PY Hedge Ratio ($/MWh) ($/MWh) 2014‐15 79% $ 46.46 ($0.21) 2015‐16 70% $ 43.56 ($0.75) 2016‐17 48% $ 42.08 ($0.74) 2017‐18 37% $ 41.79 ($1.05) 2018‐19 28% $ 41.63 ($1.25) 9

II. Budget Report Budget Actual Variance May-15 May-15 Gross Load 58,869 62,154 (3,285) Power Supply Hedged Energy $1,850,748 $1,927,925 ($77,177) PJM - Energy, Congestion & Losses $677,437 $404,563 $272,874 PJM - ARR, Transmission and Fees $426,150 $255,737 $170,413 Dover SUN Park Energy $221,829 $269,166 ($47,337) Dover SUN Park RECs $43,600 $38,066 $5,535 Management Fees $83,000 $83,000 $0 PJM - Capacity UCAP Obligated Purchased $823,464 $808,292 $15,172 Subtotal - Power Supply $4,126,228 $3,786,749 $339,479 Power Generation O&M Plant O&M $628,031 $310,313 $317,718 Subtotal Generation O&M $628,031 $310,313 $317,718 Power Generation Production Margin PJM - Economic and reliability dispatch ($446,560) ($12,375) ($434,185) Fixed Fuel and Transport Charges $322,150 $31,897 $290,253 Subtotal Generation Production Margin ($124,410) $19,522 ($143,932) Power Generation Non-Production Revenue PJM - Generation Capacity Credit ($740,515) ($725,759) ($14,756) Capacity Replacement Charge $11,160 $0 $11,160 PJM - Reactive Supply & Transmission Losses ($32,580) ($78,645) $46,065 Subtotal - Non-Production Revenue ($761,935) ($804,404) $42,469 SubTotal - All Generation ($258,314) ($474,569) $216,255 Total - Utilities Cost $3,867,914 $3,312,180 $555,734 Unit Costs Total - Power Supply $70.09 $60.93 $9.17 Total - Power Generation ($4.39) ($7.64) $3.25 Final Cost of Service to City of Dover Ratepayers $65.70 $53.29 $12.41 10

Variance Analysis: Power Supply  Dover consumed 3,285 MWh more than forecasted for the month.  Dover experienced a favorable variance for budgeted PJM ‐ Energy, Congestion & Losses of $272,874.  This resulted in a net power supply cost of $60.93/MWh, $9.17/MWh below budget.  The city realized a favorable variance of $339,478 for power supply vs. the monthly budget.  Dover Sun Park generated 14 MWh less than forecast. Generation  Power generation had a favorable budget variance of $ 216,255 driven primarily by lower Plant O&M expenses which had a favorable budget variance of $317,718 for the month. 11

Budget Actual Variance YTD YTD Gross Load 673,227 686,142 (12,915) Power Supply Hedged Energy $19,892,368 $24,211,060 ($4,318,692) PJM - Energy, Congestion & Losses $10,785,006 $8,178,516 $2,606,490 PJM - ARR, Transmission and Fees $3,778,988 $3,790,698 ($11,710) Dover SUN Park Energy $1,799,610 $1,752,551 $47,059 Dover SUN Park RECs $338,595 $324,159 $14,436 Management Fees $913,000 $913,000 $0 PJM - Capacity UCAP Obligated Purchased $8,898,726 $8,755,928 $142,798 Subtotal - Power Supply $46,406,293 $47,925,912 ($1,519,619) Power Generation O&M Plant O&M $5,225,041 $5,312,107 ($87,066) Subtotal Generation O&M $5,225,041 $5,312,107 ($87,066) Power Generation Production Margin PJM - Economic and reliability dispatch ($2,232,800) ($2,400,430) $167,630 Fixed Fuel and Transport Charges $1,611,100 $1,583,163 $27,937 Subtotal Generation Production Margin ($621,700) ($817,267) $195,567 Power Generation Non-Production Revenue PJM - Generation Capacity Credit ($8,002,334) ($7,833,937) ($168,397) Capacity Replacement Charge $120,600 $0 $120,600 PJM - Reactive Supply & Transmission Losses ($432,785) ($660,118) $227,333 Subtotal - Non-Production Revenue ($8,314,519) ($8,494,054) $179,535 SubTotal - All Generation ($3,711,178) ($3,999,214) $288,036 Total - Utilities Cost $42,695,115 $44,009,698 ($1,314,583) Unit Costs Total - Power Supply $68.93 $69.85 ($0.92) Total - Power Generation ($5.51) ($5.83) $0.32 Final Cost of Service to City of Dover Ratepayers $63.42 $64.02 ($0.60) 12

III. Operations Management Executive Summary: During the month of May, there were no reportable lost time accidents, although one of our employees was injured April 16th, while moving a waste oil drum into the used oil storage shed while awaiting shipment. The facility has gone 45 days without an OSHA recordable accident and 146 consecutive days without a lost time accident. There were no Environmental Notice of Violations or exceedances issued during the month and there was one Near Miss reported. All units are currently in a planned outage through May 29th at which time all will be made available with only optimization and commissioning testing remaining on unit 11, for the Inlet Fogging System that was installed during the spring outage. Monthly Budget Variance – The actual expenses attributable to O&M of the two sites for the month of April are $310,313 against a budgeted amount of $628,031 for a favorable variance of $317,718 or 50.59%. The principal reasons for the favorable variance were due to; a favorable monthly variance of $218,540 was due to having a less than full complement of staff and only (2) payroll periods being invoiced against three (3) that were budgeted for May. As a result, this impacted three (3) labor accounts – Straight Time, Overtime, and Labor Burdens. A favorable monthly variance of $5,026 was due to lower water – sewer costs than anticipated and deferring a portion of buildings and grounds maintenance to June. A favorable monthly variance of $94,152 due to no monthly electricity bill. It was expensed in April. In addition, the expenses for safety valve testing were not included in May as anticipated. The testing should be completed in June. The forecasted expenses for this fiscal year are $5,950,306 expensed versus an approved budget of $6,141,100 thereby realizing a 96.89% expenditure rate. 13

NAES Corporation Dover, Delaware May 2015 Monthly Report 14

Table of Contents 1.0 Environmental, Health, and Safety 2.0 Financial 3.0 Operations 4.0 Maintenance 5.0 CIP 6.0 General Plant Information 7.0 Summary of NAES Performance 15

1.0 Environmental, Health and Safety: During the month of May, there were no recordable accidents, lost time accidents or environmental incidents. The facility has gone 45 days through May 31, 2015 without an OSHA Recordable Accident or a Lost Time reportable accident. City of Dover transferred 3,975 CO2 allowances from the McKee Run account to the VanSant account as part of the annual control period true‐up. Additionally, RGGI requires that a minimum of 50% of the allowances be in the account for this control period. City of Dover elected to transfer 4,000 allowances from the McKee run account to VanSant which equals 100% of the allowances needed for this control period. One Near Miss was reported in May at McKee Run. The Operations staff was in the process of putting Demineralizer (water purification system) into service. Shortly after the rinsing down process began, an alarm was activated and IC&E technicians were immediately dispatched to troubleshoot and correct the cause of the alarm. As part of their troubleshooting efforts, the IC&E technicians installed a jumper wire lead from a control power terminal to the valve open solenoid L2 terminal pin. This action allowed the water inlet valve to open. While this action was taking place, the jumper lead came off of the L2 terminal and touched the side of the electrical panel cabinet causing a spark. This also resulted in the control power fuse to blow thus de‐energizing the circuit. During the month of May, there were five IWW discharges to the Kent County Public Works sewer system for a total of 145,505‐gallons. A representative sample of the industrial discharge was taken on May 19, 2015. The May SIU Report was submitted to Kent County Public Works indicating no exceedances in May. During the month of May, there were no sampling events at Outfall 001, 004, 005 and 006 and there was no discharges from Outfall 006. The May DMR was submitted to DNREC indicating no discharge for this month. No NPDES exceedances have been identified. All non‐contact cooling tower blowdown water is being discharged directly to the Kent County Department of Public Works under the facilities Industrial Wastewater Discharge Permit #18. The City of Dover‐McKee Run Generating Station staff took the initiative to perform several improvements at storm water drain Outfall 004. The first improvement was to remove a damaged section of silt fencing from around Outfall 004 and the adjoining drain north of Outfall 004. The silt fencing was damaged from a recent rain event and high winds. The second improvement was to installed new silt fencing around both drains to prevent any potential turbid storm water run‐off from entering the drain. The new silt fencing was buried below grade in the anticipation of future rain events. The third improvement was to place a spill boom around the entire southernmost drain grate to prevent any rocks/gravel from entering the drain. The fourth and final improvement was the 16

installation of silt fence weir barriers prior to where storm water enters Outfall 004. These silt fence weirs will capture fugitive sediment/rocks/gravel from storm water prior to interfacing with the southernmost drain silt fence barrier. Additionally, the City of Dover graded the disturbed grounds around the Unit 3 cooling tower and McKee Run seeded and applied straw over the seed for sediment erosion control. McKee Run voluntarily submitted a continuous improvement letter along with pictures, to DNREC NPDES to document McKee Run’s efforts in improving the quality of storm water entering nearby Outfall 005. With authorization from the City of Dover, McKee Run shipped 1,878 lbs. of consumer electronic goods from the site on May 6, 2015 to an approved recycler named ECOvanta in Philadelphia through the Delaware Solid Waste Authority (DSWA). On May 7, 2015, McKee Run shipped 300‐gallons of used oil and 50‐gallons of oily water off‐site for recycling to Eldredge Inc. in West Chester, Pa. 17

Environmental, Health, and Safety Statistics Month Fiscal Year to Date (May) (7/1/14-6/30/15) NOVs 0 0 Opacity Deviations 0 5 Environmental Deviations 0 0 OSHA Recordable 0 2 OSHA LTA's 0 1 First Aid cases 0 0 Restricted Workday Accident 0 0 Near Miss 1 16 Man Hours Worked 4,021 100,495.75 Date last OSHA Recordable 4/16/15 Date last Lost Time Accident 4/16/15 Days since last OSHA recordable 45 Days since last Lost Time Accident 45 SO2 Allowances Summary SO2 Allowances Available SO2 Allowance SO2 Allowances (Per Unit, Prior to Sale & Total SO2 Tons Emitted– SO2 Allowances Vintage Sold - YTD Reconciliation) U3 and U11 YTD Balance* Unit #3 Unit #11 2013 and 0 10,365 690 2 11,053 earlier 2014 0 1850 138 1 1,987 2015 0 1850 138 10 1,978 Total SO2 Allowance Balance 15,018 *Note – Emissions allowances are deducted according to oldest vintage first, unless otherwise directed. CO2 Allowance Summary CO2 Allowance CO2 Allowances CO2 Allowances Available Total CO2 Tons CO2 Allowance Vintage Bought/Sold (Per Facility, Prior to Sale)* Emitted Balance YTD McKee Run VanSant 2014 and earlier 1,000 194,244 7,799 108,126 94,917 2015 6,000 2,176 403 2,579 3,421 Total CO2 Allowance Balance 98,338 *Note: CO2 allowance values are provided by the RGGI CO2 Allowance Tracking System. **Note: 6,000 CO2 Tons Purchased in 2015 Auction 18

2.0 Financial Financial – Current Month Month – May Actual Budget Variance Personnel 231,560 450,100 218,540 Materials & Supplies 5,774 10,800 5,026 Administrative Expenses 72,979 167,131 94,152 Total $310,313 $628,031 $317,718 Financial – Fiscal Year to Date Number of Months 11 Actual Budget Variance Personnel 2,813,066 3,248,500 435,434 Materials & Supplies 246,069 217,750 (28,319) Administrative Expenses 1,977,670 1,758,791 (218,879) Total $5,036,804 $5,225,041 $188,237 2.1 Variance analysis: The actual expenses for the month of May are $310,313 against a budgeted amount of $628,031 for a favorable variance of $317,718 or 50.59%. The variance was due to the following: PERSONNEL EXPENSES – A favorable monthly variance of $218,540 was due to having a less than full complement of staff and only (2) payroll periods being invoiced against three (3) that were budgeted for May. As a result, this impacted three (3) labor accounts – Straight Time, Overtime, and Labor Burdens. MATERIALS AND SUPPLIES EXPENSES- A favorable monthly variance of $5,026 was due to lower water – sewer costs than anticipated and deferring a portion of buildings and grounds maintenance to June. ADMINISTRATIVE EXPENSES – A favorable monthly variance of $94,152 due to no monthly electricity bill. It was expensed in April. In addition, the expenses for safety valve testing were not included in May as anticipated. The testing should be completed in June. The forecasted expenses for this fiscal year are $5,950,306 expensed versus an approved budget of $6,141,100 thereby realizing a 96.89% expenditure rate. 3.0 Operations Unit Operations / Outages / Trips: Unit 3 ran for 8.350 hours for testing on May 13then returned back to planned outage. On May 29, the spring planned outage was cleared at 0700 and all units were made available. On May 30, at 0600 hours, Units 1, 2, and 3 went into forced outage (Outside Management Control) due to Chesapeake Utilities working on the main gas line in the Dover area. The work was completed on May 31 at 0030 hours and the forced outage was cleared at that time. 19

Month – May 2015 McKee McKee McKee MRS VanSant Total Unit 1 Unit 2 Unit 3 Facility Unit 11 All Units Capacity MW 17 17 102 136 39 175 On Line Hours Hrs 0.0 0.0 8.35 8.35 0.0 8.35 Starts # 0 0 1 1 0 1 Gross Generation MWh 0.0 0.0 441.985 441.985 0.0 441.985 Net Generation MWh 0.0 0.0 403.328 403.328 0.0 403.328 Total Auxiliaries MWh 0.0 0.0 190.824 190.824 0.0 190.824 Auxiliaries purchased MWh 21.689 21.689 152.167 195.545 2.192 197.737 Fuel Gas Used# MMBTU 0.0 0.0 5,151.506 5,151.506 0.0 5,151.506 Fuel Oil Used MMBTU 0.0 0.0 0.0 0.0 0.0 0.0 Fuel Oil Used Gallons 0.0 0.0 0.0 0.0 0.0 0.0 Total Fuel MMBTU 0.0 0.0 5,151.506 5,151.506 0.0 5,151.506 Net Heat Rate BTU/KWh 0.0 0.0 12.772 12.772 0.0 12.772 Unit Trips # 0 0 0 0 0 0 Capacity Factor % 0.0 0.0 0.53 0.53 0.0 0.53 Availability Factor % 6.25 6.25 7.37 6.62 8.74 7.15 Commercial % 0.0 0.0 0.0 0.0 0.0 0.0 Unavailability (CU) Planned Outage Hours Hours 679.000 679.000 670.650 2,028.650 679.000 2,707.650 Maintenance Outage Hours 0.0 0.0 0.0 0.0 0.0 0.0 Hours Forced Outage Hours Hours 18.50 18.50 18.50 55.50 0.0 55.50 Reserve Shutdown Hours 46.50 46.50 737.00046.50 744.000 139.50 497.000 744.000 65.00 744.0001,971.000 1,971.000 204.50 744.000 744.00 737.0 Hours HW Boiler Gas Usage MMBTU 0.0 0.0 Pilot Gas Usage MMBTU 0.0 0.0 0.0 0.0 # Note: Does not include HWB or Pilot Gas. Fuel usage numbers are taken from fuel flow instruments. 20

2014-2015 Fiscal Year-to-Date ( 11 Months) McKee McKee McKee MRS VanSant To Unit 1 Unit 2 Unit 3 Facility Unit 11 All U Capacity MW 17 17 102 136 39 1 On Line Hours Hrs 30.966 35.134 499.782 565.882 27.700 593 Starts # 3 5 37 45 6 5 Gross Generation MWh 261.694 252.941 25,220.308 25,734.943 981.195 26,71 Net Generation MWh 247.853 233.930 22,956.245 23,438.028 970.476 24,40 Total Auxiliaries MWh 293.285 298.455 4,616.822 5,208.562 41.234 5,24 Auxiliaries purchased MWh 312.777 312.777 2,402.879 3,028.433 48.791 3,07 Fuel Gas Used MMBTU 3,780.381 3,255.417 248,377.986 255,413.784 7,544.726 262,9 Fuel Oil Used MMBTU 0.0 0.0 20,793.918 20,793.918 5,209.202 26,00 Fuel Oil Used Gallons 0.0 0.0 150,686 150,686 37,645 188 Total Fuel MMBTU 3,780.381 3,255.417 269,171.904 276,207.702 12,753.928 288,9 Net Heat Rate BTU/KWh 15.253 13.916 12.772 13.980 13.121 13. Unit Trips # 1 3 1 5 1 Capacity Factor % 0.18 0.17 2.80 2.11 0.31 1. Availability Factor % 52.4 51.42 49.2 51.03 54.93 52 Commercial % 2.53 3.51 3.50 3.18 0.0 2. Unavailability (CU) Planned Outage Hours Hours 3,623.00 3,623.00 3,796.580 11,042.580 3,623.00 14,66 Maintenance Outage Hours 0.0 0.0 0.0 0.0 0.0 0 Hours Forced Outage Hours Hours 203.420 282.000 273.657 759.077 0.0 759 Reserve Shutdown Hours 4,181.614 4,098.866 3,446.314 11,726.794 4,388.300 16,11 Hours HW Boiler Gas Usage MMBTU 6,491.061 6,49 Pilot Gas Usage MMBTU 527.631 623.391 1,151.022 1,15 Fuel Oil Inventory Monthly Monthly Fuel Monthly FY 14-15 Fuel FY 14-15 Inventory Inventory Purchases Inventory Inventory Purchases Inventory (Start) (End) (Month) (Change) (Start) (FYTD) (Change) McKee Run (#2 Fuel Oil) 733,644 736,725 0 3,081 452,963 451,198 283,762 VanSant 225,267 226,700 0 1,433 73,572 186,592 153,128 (#2 Fuel Oil) Note: As measured by tank level instruments. Tank levels may change due to oil temperature. VanSant Lifetime through May 2015 Actual Starts Factored Starts Fired Hours VanSant 1,375 2,352.75 4,344.6 Since HGP - Dec 2004 264 685.05 961.02 21

Team Report: The Operations staff continues to support maintenance activities during the planned outage by serving as Confined Space Attendants for confined space areas as well as other support tasks. The Operations staff has also supported the outage by performing various LO/TO tasks needed to test or place equipment in or out or service. Operations personnel continue to support maintenance by working on Preventative Maintenance (PM) work orders and other work orders that they have the skills to successfully complete the task. The Operations Department continues to utilize the Day Shift Workers in both the Operations and Maintenance areas to assist with maintenance of the plant. The operators also use the GPi Learning courses to improve their knowledge and skills. The GPI online training which supports plant safety, OSHA, and environmental training requirements are being used by the teams to complete their training for the year. Along with the GPI OSHA training, the operators review the plant’s safety procedures to follow up with the GPi Learn modules and knowledge. 4.0 Maintenance During the month of May, the Plant Maintenance staff continued addressing the backlog of work orders. Back logged Work Orders are work orders that have been open for greater than 30 days. There were forty-one work orders issued with seventy work orders being completed during the month. There were no Safety Work Orders entered into the plant’s Computerized Maintenance Management System (MP2) during the month. The table below summarizes the monthly work order activities based on MP2 records and will continue to improve with time. This table gives a clearer picture of outstanding work; PM’s and back logged work items. City of Dover – McKee Run Work Order Backlog Starting Completed Total Total WO Received Total Comp End Site WO Received Completed Open Type WOs WOs WOs Backlog Backlog WOs WOs WO's ADM 28 0 28 6 0 6 22 22 CIP 16 0 16 1 0 1 15 15 CM 40 24 64 6 13 19 34 45 EM 0 2 2 0 1 1 0 1 EW 20 1 21 11 0 11 9 10 PM 53 11 64 25 1 26 28 38 PR 11 0 11 1 0 1 10 10 RO 17 0 17 1 0 1 16 16 SP 2 2 4 2 2 4 0 0 SW 0 1 1 0 0 0 0 1 Site Totals 187 41 228 53 17 70 134 158 22

City of Dover ‐ Van Sant Work Order Backlog Site Totals 187 41 228 53 17 70 134 158 ADM 3 0 3 0 0 0 3 3 CIP 3 0 3 0 0 0 3 3 VanSant CM 8 3 11 1 0 1 7 10 PM 16 0 16 8 0 8 8 8 SP 1 0 1 1 0 1 0 0 SW 0 0 0 0 0 0 0 0 Site Totals 31 3 34 10 0 10 21 24 Notable activities during the month include: The NAES IC&E staff and APEX Piping completed the installation of new CEMS stack sampling line. The line was routed from the EMS building to the stack of Unit 3. The IC&E technicians made all the necessary connections on the stack and in the CEMS building. The lines were leak tested with no leaks. Calibrations were initiated to ensure that the analyzers were functioning correctly and in accordance with Delaware State regulations. This sample line is required to be change every five years and after the change out of the sample line a RATA in required to be performed. This RATA in scheduled for June 22, 2015. The NAES Maintenance Staff and the IC&E Staff removed and replaced a bad lube oil pump motor on Unit 3. They were able to remove the motor and have it sent to the motor repair shop for repairs with minimal down time on the lube oil system. Once the motor was received the staff replaced the motor and had the lube oil system back running to a normal state. This quick turn-around was important with only having one AC motor running the system with on DC motor backup. The NAES IC&E Staff and Maintenance Staff completed the installation of a submersible pump for the Industrial Waste Water System. This style of pump was chosen to replace a Gallagher pump with water cooled bearing. In the past the water cooled bearing have been an issues with high repair cost. The performance will be monitored on this pump to ensure proper operation. Once the performance of this new submersible unit is proven a replacement unit will be purchased and put in inventory along with identified spares to support the pump. The replacement pump will be for the eventual replacement of the older “A” pump in the industrial Waste Water System. 23

5.0 Capital Improvement Projects (CIP) Project Description Update Number Progress: Spring activities included the replacement of the turbine supervisory equipment probes and panel and performing balancing of the turbine thereafter. Contractors were onsite to complete the installation work. EG1212 Unit 3 Turbine Repairs Schedule: Contractors were back onsite to remove bearings for modifications and to install vibration monitoring equipment. Unit was operated to check out system and to run vibration tests for balancing purposes. No balancing needed at this time. Unit #3 Cooling Tower Progress: Work is complete and final report has been received. EG1402 Repairs Schedule: Project is complete. McKee Run HEP Pipe Progress: Work is complete and final report has been received. EG1406 Repairs Schedule: Project is complete. Progress: Project on Hold. Metering System Schedule: Project is on Hold until next year when RFP process will begin EG1407 Upgrades again. Project would be slated to be completed once Units 1 and 2 are taken out of service. Progress: Mechanical work is complete in May and commissioning of system VanSant Capacity to occur in mid-June. Emission testing scheduled for late June. EG1416 Schedule: PLC programming and commissioning of system to occur in mid- Increase June. Emission testing scheduled for late June. Unit #3 Auxiliary System Progress: Work is complete. EG1503 Component Schedule: Work is complete. Replacement Progress: Tube samples have yet to be sent out for analysis. CEMS Sample Unit#3 Boiler System EG1504 line work was completed in April and tested out in May.. Repairs Schedule: Work is complete. VanSant Station Progress: Project on Hold due to funding removed to support other CIPs. EG1505 Component Schedule: Project on Hold due to funding removed to support other CIPs. Replacement Progress: Updated Drawings received and final work to be completed in McKee Run/VanSant EG1506 June. Safety Improvements Schedule: Project on schedule to completed this FY. McKee Run Units #1-#2 Progress: Project on Hold EG1507 Component Schedule: Project on Hold Replacement Progress: Project on Hold, however some funds were used to support McKee Run/VanSant transformer repair cost to preserve station integrity and reliability. EG1508 Schedule: Project on Hold, however some funds were used to support Structural Preservation transformer repair cost to preserve station integrity and reliability. 24

6.0 General Plant Information Debro Curtis was welcomed as a new Operator with McKee Run. Debro is a 2014 Williamson graduate with an Associate’s Degree in Power Plant Technology. Most recently, Debro has worked as a Contractor with TekSolv and has been involved with maintaining and monitoring plant equipment, chemistry analysis, LOTO, and high pressure equipment, among other duties. We look forward to working with Debro and incorporating him into our team. The other Operator position was filled, with new employee Jesse Kummerer scheduled to start work on June 1, 2015. Jesse recently graduated from Williamson with an Associate’s Degree in Power Plant Technology. Most recently Jesse had internships with Zeeco Burners and Powerhouse Boilers. At Zeeco Burners, he worked as a Field Service Technician and at Powerhouse Boilers he worked as a boiler technician. During his internships, he was able to learn how to install and design an industrial sized burner, measure air flow coming out of the burner, wire devices on Cleaver brooks boilers and work in the tool room, learning about pipe fittings and valves used on package boilers. Training: Plant employees continue with General Physics safety training and environmental courses to enhance their overall knowledge of the plant permit requirements and the NAES safety requirements. Topics discussed during the monthly safety committee meeting were reviewed by the entire staff. The monthly safety topic was on “Everyone is Responsible for Safety” and therefore everyone is empowered to stop a job if they consider the work practice at hand to be unsafe or dangerous to the health and well-being of the employee(s) performing a given task. They are all aware that safety and safe performance of work and tasks is a team effort and making sure each of us is watching out for the safety of others is a core value for NAES Safe practices. Calendar of Events Date Units 1, 2, and 3 Spring Outage April 2, 2015 – May 29, 2015 Unit 11 Spring Outage April 2, 2015 – May 29, 2015 Air Emission Inventory April 30, 2015 NOx Ozone Season Starts May 1, 2015 EIA-860 Reporting Due May 4, 2015 EIA-923 Reporting Due May 15, 2015 PJM Summer Capacity Test Period June 1, 2015 – August 31, 2015 FY 2014-201454 Budget Year Begins July 1, 2015 Toxic Release Inventory (TRI) Annual Report July 1, 2015 Semi-Annual Title V Certification Due July 31, 2015 NOx Ozone Season Ends September 30, 2014 Annual VanSant Black Start Test TBD Units 1, 2, 3 and 11 Fall Outage Starts TBD Winter Capacity Period December 1, 2015 to February 28, 2016 Title V Annual Certifications Due January 31, 2016 25

7.0 Summary of NAES Performance to Date Plant Performance FY 2014-2015 Measure Month Year to Date YTD FY Maximum Incentive Incentive Commercial 0.0% 2.66% $0 $96,875 Unavailability (CU) Safety 0 1 $9,082 $18,163 Environmental 0 0 $18,163 $18,163 Capacity Tests Summer Winter Summer Winter Completed Unit 1 No No Yes Yes* $3,634 $3,634 Unit 2 No No Yes Yes* $3,634 $3,634 Unit 3 No No Yes Yes $21,797 $21,797 Unit 11 No No Yes Yes $7,266 $7,266 Total YTD 37.50% Total YTD Incentive $63,576 $169,532 Incentive % Note*: All units have successfully completed the Summer (FY 2014-2015) Testing for PJM and were entered in the PJM Winter Capacity Test Exemption Program. Unit 11 and Unit 3 successfully completed capacity testing for the Winter period. Units 1 and 2 did not come online so were included in the Winter Exemption Program. 26

IV. Appendix 1 – PJM Invoice REPORT NAME: Monthly Billing Statement - CSV and XML CUSTOMER ACCOUNT: City of Dover, Delaware CUSTOMER CODE: DOVDE CUSTOMER ID: 76 FINAL BILLING STATEMENT ISSUED: 6/5/2015 12:24 BILLING PERIOD START DATE: 5/1/2015 BILLING PERIOD END DATE: 5/31/2015 INVOICE NUMBER: 2015053100076.000000 INVOICE DUE DATE: 6/12/2015 12:00 SOURCE BILLING PERIOD AMOUNT CHARGES ADJ BILLING LINE ITEM NAME START ($) 1100.000000 Network Integration Transmission Service 397786.42 1108.000000 Transmission Enhancement 66224.76 1130.000000 Firm Point-to-Point Transmission Service 0.00 1140.000000 Non-Firm Point-to-Point Transmission Service 0.00 1200.000000 Day-ahead Spot Market Energy 617113.66 1205.000000 Balancing Spot Market Energy -21273.36 1210.000000 Day-ahead Transmission Congestion -225374.14 1215.000000 Balancing Transmission Congestion -2616.53 1220.000000 Day-ahead Transmission Losses 31697.58 1225.000000 Balancing Transmission Losses 757.21 1230.000000 Inadvertent Interchange 218.82 1242.000000 Day-Ahead Load Response Charge Allocation 46.27 1243.000000 Real-Time Load Response Charge Allocation 57.41 1250.000000 Meter Error Correction -2508.44 PJM Scheduling, System Control and Dispatch Service - Control 1301.000000 Area Administration 10317.16 PJM Scheduling, System Control and Dispatch Service - FTR 1302.000000 Administration 0.00 PJM Scheduling, System Control and Dispatch Service - Market 1303.000000 Support 2375.79 PJM Scheduling, System Control and Dispatch Service - Regulation 1304.000000 Market Administration 88.07 PJM Scheduling, System Control and Dispatch Service - Capacity 1305.000000 Resource/Obligation Mgmt. 952.63 PJM Scheduling, System Control and Dispatch Service - Advanced 1306.000000 Second Control Center 1509.82 PJM Scheduling, System Control and Dispatch Service - Market 1307.000000 Support Offset -270.04 1313.000000 PJM Settlement, Inc. 270.04 1314.000000 Market Monitoring Unit (MMU) Funding 245.30 1315.000000 FERC Annual Recovery 4085.42 1316.000000 Organization of PJM States, Inc. (OPSI) Funding 42.06 1317.000000 North American Electric Reliability Corporation (NERC) 719.52 1318.000000 Reliability First Corporation (RFC) 1170.74 Transmission Owner Scheduling, System Control and Dispatch 1320.000000 Service 4530.51 Reactive Supply and Voltage Control from Generation and Other 1330.000000 Sources Service 35979.17 1340.000000 Regulation and Frequency Response Service 20999.10 1360.000000 Synchronized Reserve 8124.33 27

1362.000000 Non-Synchronized Reserve 1219.05 1365.000000 Day-ahead Scheduling Reserve 9872.72 1370.000000 Day-ahead Operating Reserve 5299.10 1371.000000 Day-ahead Operating Reserve for Load Response 1.05 1375.000000 Balancing Operating Reserve 6880.75 1376.000000 Balancing Operating Reserve for Load Response -0.74 1378.000000 Reactive Services 25104.71 1380.000000 Black Start Service 1929.86 1400.000000 Load Reconciliation for Spot Market Energy -4106.02 1410.000000 Load Reconciliation for Transmission Congestion -1393.55 1420.000000 Load Reconciliation for Transmission Losses -240.91 1430.000000 Load Reconciliation for Inadvertent Interchange 2.94 Load Reconciliation for PJM Scheduling, System Control and 1440.000000 Dispatch Service -20.49 Load Reconciliation for Schedule 9-6 - Advanced Second Control 1442.000000 Center -2.57 1444.000000 Load Reconciliation for Market Monitoring Unit (MMU) Funding -0.38 1445.000000 Load Reconciliation for FERC Annual Recovery -6.65 Load Reconciliation for Organization of PJM States, Inc. (OPSI) 1446.000000 Funding -0.07 Load Reconciliation for North American Electric Reliability 1447.000000 Corporation (NERC) -1.17 1448.000000 Load Reconciliation for Reliability First Corporation (RFC) -1.90 Load Reconciliation for Transmission Owner Scheduling, System 1450.000000 Control and Dispatch Service -7.37 1460.000000 Load Reconciliation for Regulation and Frequency Response Service -39.86 1470.000000 Load Reconciliation for Synchronized Reserve 8.93 1472.000000 Load Reconciliation for Non-Synchronized Reserve 1.12 1475.000000 Load Reconciliation for Day-ahead Scheduling Reserve -1.88 1478.000000 Load Reconciliation for Balancing Operating Reserve -16.58 1490.000000 Load Reconciliation for Reactive Services -0.07 1600.000000 RPM Auction 14753.52 1610.000000 Locational Reliability 814257.78 1932.000000 Generation Deactivation Refund -595.24 1250.000000 A Meter Error Correction 4/1/2015 -0.06 1340.000000 A Regulation and Frequency Response Service 4/1/2015 -0.14 1360.000000 A Synchronized Reserve 1/1/2014 -206953.52 1360.000000 A Synchronized Reserve 2/1/2014 -3264.21 1360.000000 A Synchronized Reserve 3/1/2014 -13185.51 1360.000000 A Synchronized Reserve 4/1/2014 -4689.47 1360.000000 A Synchronized Reserve 5/1/2014 -2895.06 1360.000000 A Synchronized Reserve 6/1/2014 -509.56 1360.000000 A Synchronized Reserve 1/1/2015 -0.64 1370.000000 A Day-ahead Operating Reserve 1/1/2015 -0.24 1370.000000 A Day-ahead Operating Reserve 2/1/2015 1.13 1370.000000 A Day-ahead Operating Reserve 3/1/2015 0.45 1375.000000 A Balancing Operating Reserve 1/1/2014 5.78 1375.000000 A Balancing Operating Reserve 1/1/2015 0.03 1375.000000 A Balancing Operating Reserve 2/1/2015 2.42 1375.000000 A Balancing Operating Reserve 3/1/2015 0.24 1375.000000 A Balancing Operating Reserve 4/1/2015 -51.55 1911.000000 A Michigan - Ontario Interface Phase Angle Regulators 4/1/2015 174.81 28

1980.000000 A Miscellaneous Bilateral 4/1/2015 -43.87 Total Charges 1594756.39 SOURCE BILLING PERIOD AMOUNT CREDITS ADJ BILLING LINE ITEM NAME START ($) 2100.000000 Network Integration Transmission Service 0.00 2108.000000 Transmission Enhancement 62029.95 2130.000000 Firm Point-to-Point Transmission Service 0.00 2140.000000 Non-Firm Point-to-Point Transmission Service 530.44 2210.000000 Transmission Congestion 0.00 2220.000000 Transmission Losses 17571.16 Transmission Owner Scheduling, System Control and Dispatch 2320.000000 Service 0.00 Reactive Supply and Voltage Control from Generation and Other 2330.000000 Sources Service 29467.58 2340.000000 Regulation and Frequency Response Service 0.00 2360.000000 Synchronized Reserve 0.00 2365.000000 Day-ahead Scheduling Reserve 0.00 2370.000000 Day-ahead Operating Reserve 0.00 2375.000000 Balancing Operating Reserve 0.00 2380.000000 Black Start Service 0.00 2420.000000 Load Reconciliation for Transmission Losses -50.22 2510.000000 Auction Revenue Rights 54971.37 2600.000000 RPM Auction 740512.50 2630.000000 Capacity Transfer Rights -60.76 2661.000000 Capacity Resource Deficiency 6026.96 2666.000000 Load Management Test Failure 279.93 2140.000000 A Non-Firm Point-to-Point Transmission Service 4/1/2015 57.99 2220.000000 A Transmission Losses 1/1/2015 0.15 2220.000000 A Transmission Losses 2/1/2015 -0.07 2220.000000 A Transmission Losses 3/1/2015 -0.15 2360.000000 A Synchronized Reserve 1/1/2014 -122510.05 2360.000000 A Synchronized Reserve 2/1/2014 -3157.56 2360.000000 A Synchronized Reserve 6/1/2014 -15.65 Total Credits 785653.57 Monthly Billing Net Total 809102.82 Previous Weekly Billing Net Total 642988.80 Total Due / Receivable 166114.02 29

FUND SUMMARY as of 05/15/2015 Total Collected $ 1,145,099.76 DEMEC Admin Fee Paid $ 67,703.86 State Admin Fee Paid $ 26,675.07 Customer Grants Paid $ 535,563.25 Customer Only Grants/Fees Reserved and Amount Owed $ 63.75 Community Project Funds Requested - Dov. Lib - Requested $ 1,970,000.00 Community Project Funds Paid - Dov. Lib $ 298,908.32 Energy Depot Fees Paid $ 56,901.77 Efficiency Program Dollars Paid $ 37,268.34 Solar Electric Power Association (SEPA) Fee Paid $ 6,476.41 Unencumbered Funds Available Grants $ 5,538.99 Funds Available for Dover Library $ 110,000.00 Current Grant Payment Delay (Months) 0.0 GRANTS PAID Grant Amount Review Fee Amount Date Grant Paid Applicant Type Paid Paid Owed 9/21/2007 Laura Drew Kelly Geo-Res $ 3,000.00 $ 225.00 $ - 12/5/2007 Domingo Reyes PV-Res $ 12,762.50 $ 750.00 $ - 4/16/2008 Lakeland Commercial Group Geo-NonRes $ 10,800.00 $ 750.00 $ - 6/19/2008 & 08/25/2008 L.D. Shank - Triad Farms PV-NonRes $ 30,000.00 $ 750.00 $ - 10/6/2008 City of Dover PV-NonRes $ 40,820.00 $ 750.00 $ - 10/21/2008 Robert & Cynthia Hartman Geo-Res $ 1,800.00 $ 135.00 $ - 10/21/2008 Robert Varipapa Geo-Res $ 2,400.00 $ 180.00 $ - 2/27/2009 David Jump PV-Res $ 15,000.00 $ 750.00 $ - 2/27/2009 Jakob Seren PV-Res $ 15,000.00 $ 750.00 $ - 2/27/2009 William Sweet PV-Res $ 15,000.00 $ 750.00 $ - 3/31/2009 LD Shank - Triad Farms SHW-NonRes $ 3,000.00 $ 225.00 $ - 3/31/2009 Warren & Joan Seaver Geo-Res $ 3,000.00 $ 225.00 $ - 4/22/2009 William Sweet SHW-Res $ 3,000.00 $ 225.00 $ - 4/28/2009 State of DE/DNREC - DE National PV-NonRes $ 30,000.00 $ 750.00 $ - 4/29/2009 Delaware Primary Care, LLC PV-NonRes $ 30,000.00 $ 750.00 $ - 9/11/2009 NCALL PV-NonRes $ 30,000.00 $ 750.00 $ - 9/11/2009 D.Brian Beckman Geo-Res $ 2,000.00 $ 150.00 $ - 9/21/2009 LSKC Dover, LLC - Kids Cottage PV-NonRes $ 29,925.00 $ 750.00 $ - 10/5/2009 Mark F. Boller Geo-Res $ 3,000.00 $ 225.00 $ - 10/5/2009 John Welgan PV-Res $ 15,000.00 $ 750.00 $ - 11/4/2009 LSKC LLC/ Kids Cottage Geo-NonRes $ 12,000.00 $ 750.00 $ - 3/25/2010 James G. McGiffin Jr. & Kathleen M. Geo-Res $ 3,000.000 $ 225.000 $ - 3/23/2010 Minaxi Patel PV-Res $ 15,000.000 $ 750.000 $ - 5/28/2010 Nancy Warner Geo-Res $ 1,200.000 $ 90.000 $ - 6/2/2010 David Teel Geo-Res $ 1,800.000 $ 135.000 $ - 6/2/2010 Dewey J. Barich Geo-Res $ 2,400.00 $ 180.000 $ - 7/12/2010 Mike & Sharon Laverty PV-Res $ 5,105.000 $ 382.880 $ - 8/19/2010 James Grilli Geo-Res $ 1,800.00 $ 135.000 $ - 8/19/2010 Michael Noble PV-Res $ 15,000.000 $ 750.000 $ - 9/17/2010 David Teel PV-Res $ 7,500.000 $ 562.500 $ - 3/8/2011 Michael & Carol Apgar PV-Res $ 7,500.000 $ 562.500 $ - 3/17/2011 Elizabeth Murphey School Geo-NonRes $ 9,200.000 $ 690.000 $ - 5/24/2011 Richard Avant Geo-Res $ 2,400.000 $ 180.000 $ - 6/23/2011 Charles Messina Plumbing & SHW-NonRes $ 10,000.000 $ 750.000 $ - 10/4/2011 Charles Bounds Geo-Res $ 1,800.000 $ 135.000 $ - 3/29/2011 Michael J Kopp Geo-Res $ 2,300.000 $ 135.000 $ 37.500 7/8/2011 Psychiatric Access of Central DE PV-NonRes $ 13,187.500 $ 750.000 $ - 3/7/2012 Ruth Ann Piper Geo-Res $ 1,200.000 $ 90.00 $ - 3/7/2012 Robert Hall Geo-Res $ 3,000.000 $ 225.00 $ - 3/7/2012 Elizabeth Murphey School (Bradford Geo-NonRes $ 13,800.000 $ 750.00 $ - 3/7/2012 Elizabeth Murphey School (Florence Geo-NonRes $ 12,000.000 $ 750.00 $ - 3/7/2012 Elizabeth Murphey School (Elizabeth Geo-NonRes $ 5,400.000 $ 405.00 $ - 3/7/2012 Elizabeth Murphey School (Garage & Geo-NonRes $ 1,800.000 $ 135.00 $ - 3/7/2012 Frank Daniels Geo-Res $ 4,400.000 $ 303.75 $ 26.25 3/7/2012 Elizabeth Murphey School (Sanford Geo-NonRes $ 10,200.00 $ 750.00 $ - 8/15/2012 Chong S. Tamburo-Lepage Geo-Res $ 2,300.00 $ 172.50 $ - 12/19/2012 Christopher W. Los Geo-Res $ 3,000.00 $ 225.00 $ - 1/30/2013 Matthew and Kimberly Chesser Geo-Res $ 3,000.00 $ 225.00 $ - 2/25/2013 Dennis Ho PV-Res $ 6,775.00 $ 508.13 $ - 6/28/2013 John DeMarie Geo-Res $ 3,000.00 $ 225.00 $ - 10/30/2013 James and Corinna Fritsch PV-Res $ 5,287.50 $ 396.56 $ - 10/30/2013 James and Deri Austin PV-Res $ 7,500.00 $ 562.50 $ - 2/28/2014 Calogero Guarraggi PV-Res $ 7,500.00 $ 562.50 $ - 2/28/2014 Elizabeth Murphey School Geo-NonRes $ 3,700.00 $ 277.50 $ - 2/21/2014 Mohammed Fuad Geo-Res $ 3,000.00 $ 225.00 $ - 4/8/2014 Holly Pfeifer PV-Res $ 5,750.00 $ 431.25 $ - 5/13/2014 Governors Avenue Animal Hospital PV-NonRes $13,550.75 $ 750.00 $ - 7/17/2014 Julia M. Pillsbury Geo-Res $ 3,000.00 $ 225.00 $ - 11/7/2014 Elizabeth Murphey School Geo - NonRes $ 3,700.00 $ 277.50 $ - 11/7/2014 Elizabeth Murphey School Geo - NonRes $ 3,700.00 $ 277.50 $ - 1/8/2015 Rex Bell Geo - Res $ 2,300.00 $ 172.50 $ - Total $ 535,563.25 $ 26,675.07 $ 63.75 ARRA RELIEF GRANTS PAID Paid by State Customer System Type Amount 6/10/2011 Arturo Sanchez Solar - PV - Res $ 7,500.00 10/19/2011 John Diamond Enterprise LLC Solar - PV - Com $ 30,000.00 10/19/2011 John Diamond Enterprise LLC Geo HP - Com $ 10,000.00 Total $ 47,500.00 RECEIVED APPLICATIONS Grant Reservation Status Applicant Type Request Review Fee Total $ - $ - ENERGY DEPOT FEES SEPA Fees Paid Fee Period Amount Date Measure 3/3/2008 Start-up Fees $ 5,872.50 3/19/2012 2012 Annual Membership $ 2,158.81 4/15/2008 Start-up Fees $ 1,957.50 1/31/2013 2013 Annual Membership $ 2,158.80 4/15/2008 Mar, Apr, May 2008 $ 1,692.13 1/27/2014 2014 Annual Membership $ 2,158.80 7/22/2008 June, July, Aug 2008 $ 1,692.13 10/10/2008 Sept, Oct, Nov 2008 $ 1,692.13 1/2/2009 Dec 08, Jan, Feb 2009 $ 1,692.13 4/3/2008 Mar, Apr, May 2009 $ 1,692.13 7/1/2009 June, July, Aug 2009 $ 1,692.13 9/11/2009 Sept, Oct, Nov 2009 $ 1,692.13

1/4/2010 Dec 09, Jan, Feb 2010 $ 1,692.13 3/29/2010 Mar, April, May 2010 $ 1,692.13 6/30/2010 June, July, Aug 2010 $ 1,692.13 Total $ 6,476.41 10/4/2010 Sept, Oct, Nov 2010 $ 1,692.13 1/3/2011 Dec 2010, Jan, Feb 2011 $ 1,692.13 4/5/2011 Mar, Apr, May 2011 $ 1,692.13 7/8/2011 June, July, Aug 2011 $ 1,692.13 10/4/2011 Sept, Oct, Nov, 2011 $ 1,692.13 1/3/2012 Dec 2011; Jan, Feb 2012 $ 1,692.13 4/5/2012 Mar, Apr, May 2012 $ 1,692.13 7/2/2012 June, July, Aug 2012 $ 1,692.13 10/2/2012 Sept, Oct, Nov 2012 $ 1,692.13 11/30/2012 Dec 12, Jan, Feb 2013 $ 1,692.13 2/25/2013 Mar, Apr, May 2013 $ 1,692.13 7/22/2013 June, July, Aug 2013 $ 1,692.13 8/26/2013 Sept, Oct, Nov, 2013 $ 1,692.13 12/3/2013 Dec 13. Jan, Feb 2014 $ 1,692.13 3/4/2014 Mar, Apr, May 2014 $ 1,692.13 6/4/2014 June, July, Aug 2014 $ 1,692.13 9/4/2014 Sept, Oct, Nov 2014 $ 1,692.13 12/1/2014 Dec 14, Jan, Feb 2015 $ 1,692.13 3/9/2015 Mar, Apr, May 201 $ 1,692.13 Total Paid $ 56,901.77 ENERGY EFFICIENCY CAMPAIGNS/EDUCATION PROGRAMS Paid Program Measure Amount 10/21/2008 1,500 CFL Campaign & Educational $ 5,012.29 Reimbursement for Green 12/11/2008 Energy/Information Pamphlets $ 3,459.12 Thermal Imager for Home Audits 3/31/2009 Program $ 5,581.12 Eco @ Home Energy Conserve. 1/4/2011 Calendars $ 20,015.81 Presbyterian Church of Dover - 1/14/2014 Energy Efficiency Grant $3,200.00 Total $ 37,268.34 10/30/2013 Dover Library Community Grant Payment Schedule Dover Library Community Funds Collection - $ 1,970,000.00 Allocation change from Dover Payment Due Date Requested Amount Funds Paid to Date Collections 10/17/2011 $ 48,267.00 $ 48,267.00 12/5/2012 $ 152,141.32 $ 152,141.32 $ 5,021.15 1/2 of Oct 2009 GEF Payment June 1, 2014 $ 98,500 $ 98,500.00 $ 4,783.94 1/2 of Nov 2009 GEF Payment June 1, 2015 $ 98,500 $ 4,813.23 1/2 of Dec 2009 GEF Payment June 1, 2016 $ 98,500 $ 5,454.02 1/2 of Jan 2010 GEF Payment June 1, 2017 $ 98,500 $ 5,147.49 1/2 of Feb 2010 GEF Payment June 1, 2018 $ 98,500 $ 4,897.69 1/2 of March 2010 GEF Payment June 1, 2019 $ 98,500 $ 3,976.14 1/2 of April 2010 GEF Payment June 1, 2020 $ 98,500 $ 5,638.90 1/2 of May 2010 GEF Payment June 1, 2021 $ 98,500 $ 5,645.35 1/2 of June 2010 GEF Payment June 1, 2022 $ 98,500 $ 6,590.60 1/2 of July 2010 GEF Payment June 1, 2023 $ 98,500 $ 7,786.09 1/2 of August 2010 GEF Payment June 1, 2024 $ 98,500 $ 6,415.31 1/2 of Sept 2010 GEF Payment June 1, 2025 $ 98,500 $ 5,327.96 1/2 of Oct 2010 GEF Payment June 1, 2026 $ 98,500 $ 4,787.73 1/2 of Nov 2010 GEF Payment June 1, 2027 $ 98,500 $ 4,939.75 1/2 of Dec 2010 GEF Payment June 1, 2028 $ 98,500 $ 5,452.55 1/2 of Jan 2011 GEF Payment June 1, 2029 $ 98,500 $ 5,410.35 1/2 of Feb 2011 GEF Payment June 1, 2030 $ 98,500 $ 4,646.32 1/2 of March 2011 GEF Payment June 1, 2031 $ 98,500 $ 4,742.22 1/2 of April 2011 GEF Payment June 1, 2032 $ 98,500 $ 4,702.48 1/2 of May 2011 GEF Payment June 1, 2033 $ 98,500 $ 5,664.97 1/2 of June 2011 GEF Payment Total $ 1,970,000.00 $ 298,908.32 $ 6,430.15 1/2 of July 2011 GEF Payment $ 6,916.50 1/2 of Aug 2011 GEF Payment $ 6,149.31 1/2 of Sept 2011 GEF Payment $ 5,243.92 1/2 of Oct 2011 GEF Payment $ 4,829.91 1/2 of Nov 2011 GEF Payment $ 4,531.81 1/2 of Dec 2011 GEF Payment $ 4,990.50 1/2 of Jan 2012 GEF Payment $ 5,071.81 1/2 of Feb 2012 GEF Payment $ 4,828.32 1/2 of March 2012 GEF Payment $ 4,857.07 1/2 of April 2012 GEF Payment $ 4,230.04 1/2 of May 2012 GEF Payment $ 5,711.19 1/2 of June 2012 GEF Payment $ 6,085.89 1/2 of July 2012 GEF Payment $ 7,347.66 1/2 of Aug 2012 GEF Payment $ 6,453.66 1/2 of Sept 2012 GEF Payment $ 4,886.43 1/2 of Oct 2012 GEF Payment $ 4,132.99 1/2 of Nov 2012 GEF Payment $ 5,513.86 1/2 of Dec 2012 GEF Payment $ 5,187.25 1/2 of Jan 2013 GEF Payment $ 5,307.83 1/2 of Feb 2013 GEF Payment $ 4,783.25 1/2 of March 2013 GEF Payment $ 4,903.40 1/2 of April 2013 GEF Payment $ 4,673.21 1/2 of May 2013 GEF Payment $ 5,322.04 1/2 of June 2013 GEF Payment $ 6,352.74 1/2 of July 2013 GEF Payment $ 6,519.11 1/2 of Aug 2013 GEF Payment $ 5,995.23 1/2 of Sept 2013 GEF Payment $ 4,913.73 All of Oct 2013 GEF Payment Allocation Request from Dover 10/30/2013 - DEMEC to direct more money to library $ 8,589.16 All of Nov 2013 GEF Payment $ 8,846.64 All of Dec 2013 GEF Payment $ 9,286.45 All of Jan 2014 GEF Payment $ 10,267.60 All of Feb 2014 GEF Payment $ 8,950.89 All of March 2014 GEF Payment $ 8,960.46 All of April 2014 GEF Payment $ 8,069.10 All of May 2014 GEF Payment $ 9,357.61 All of June 2014 GEF Payment $ 10,776.24 All of July 2014 GEF Payment $ 10,967.67 All of Aug 2014 GEF Payment $ 10,883.75 All of Sept 2014 GEF Payment $ 8,932.20 All of Oct 2014 GEF Payment $ 8,549.42 All of Nov 2014 GEF Payment $ 8,805.66 All of Dec 2014 GEF Payment $ 9,524.94 All of Jan 2015 GEF Payment $ 10,268.95 All of Feb 2015 GEF Payment $ 9,387.70 All of March 2015 GEF Payment All of April 2015 GEF Payment All of May 2015 GEF Payment All of June 2015 GEF Payment $ 424,437.37 Total Collections

City of Dover Electric Revenue Fund FY15 - White Oak Solar Park Incremental Cost Original July August September October November December January February YTD Budget Power Supply & Generation Dover Sun Park - Energy $ 227,139 $ 219,981 $ 185,885 $ 140,672 $ 96,640 $ 54,849 $ 80,597 $ 111,516 $ 1,117,277 $ 2,067,600 Dover Sun Park - REC's 47,469 42,307 33,221 25,192 17,303 9,828 14,396 - 189,716 378,600 Total Power Supply Cost 274,609 262,288 219,105 165,864 113,943 64,677 94,993 111,516 1,306,993 2,446,200 Non-Solar Power Supply Cost (170,970) (136,533) (97,948) (80,182) (63,893) (26,259) (48,763) (103,862) (728,410) (860,244) Incremental Energy Cost $ 103,639 $ 125,755 $ 121,157 $ 85,682 $ 50,050 $ 38,418 $ 46,229 $ 7,654 $ 578,583 $ 1,585,956 Revenues Customer Sales - Electricity (9,870) (8,024) (7,893) (7,840) (8,061) (8,135) (8,448) (8,367) (66,638) (84,600) Rent Receipts (14,807) - - (14,807) - - (15,177) - (44,792) (101,400) Total Revenues (24,677) (8,024) (7,893) (22,647) (8,061) (8,135) (23,625) (8,367) (111,429) (186,000) Incremental Sun Park Cost $ 78,962 $ 117,731 $ 113,264 $ 63,034 $ 41,989 $ 30,283 $ 22,604 $ (713) $ 467,154 $ 1,399,956 MWh Purchased/Generated - Solar 2,217.724 2,006.392 1,602.868 1,213.000 833.320 472.956 694.980 961.592 10,002.832 18,159.000 MWh $ Solar Energy $ 102.42 $ 109.64 $ 115.97 $ 115.97 $ 115.97 $ 115.97 $ 115.97 $ 115.97 $ 111.70 $ 113.86 Solar REC's MWh 332.000 301.000 240.000 182.000 125.000 71.000 104.000 - 1,355.000 MWh $ Solar REC (one month lag)* 142.98 140.56 138.42 138.42 138.42 138.42 138.42 - $ - MWh $ Non-Solar Energy $ 77.09 $ 68.05 $ 61.11 $ 66.10 $ 76.67 $ 55.52 $ 70.16 $ 108.01 Note: Solar REC's are one month behind due to the time the invoice is received.

City of Dover Electric Revenue Fund FY15 - White Oak Solar Park Incremental Cost Original July August September October November December January February March April YTD Budget Power Supply & Generation Dover Sun Park - Energy $ 227,139 $ 219,981 $ 185,885 $ 140,672 $ 96,640 $ 54,849 $ 80,597 $ 111,516 $ 153,863 $ 212,274 $ 1,483,415 $ 2,067,600 Dover Sun Park - REC's 47,469 42,307 33,221 25,192 17,303 9,828 14,396 19,932 27,546 - 237,194 378,600 Total Power Supply Cost 274,609 262,288 219,105 165,864 113,943 64,677 94,993 131,448 181,409 212,274 1,720,608 2,446,200 Non-Solar Power Supply Cost (170,970) (136,533) (97,948) (80,182) (63,893) (26,259) (48,763) (103,555) (70,973) (115,153) (914,229) (1,131,760) Incremental Energy Cost $ 103,639 $ 125,755 $ 121,157 $ 85,682 $ 50,050 $ 38,418 $ 46,229 $ 27,894 $ 110,436 $ 97,121 $ 806,380 $ 1,314,440 Revenues Customer Sales - Electricity (9,870) (8,024) (7,893) (7,840) (8,061) (8,135) (8,448) (8,367) (8,186) (7,849) (82,673) (84,600) Rent Receipts (14,807) - - (14,807) - - (15,177) - - - (44,792) (101,400) Total Revenues (24,677) (8,024) (7,893) (22,647) (8,061) (8,135) (23,625) (8,367) (8,186) (7,849) (127,464) (186,000) Incremental Sun Park Cost $ 78,962 $ 117,731 $ 113,264 $ 63,034 $ 41,989 $ 30,283 $ 22,604 $ 19,527 $ 102,250 $ 89,272 $ 678,915 $ 1,128,440 MWh Purchased/Generated - Solar 2,217.724 2,006.392 1,602.868 1,213.000 833.320 472.956 694.980 961.592 1,326.748 1,830.424 13,160.004 18,159.000 MWh $ Solar Energy $ 102.42 $ 109.64 $ 115.97 $ 115.97 $ 115.97 $ 115.97 $ 115.97 $ 115.97 $ 115.97 $ 115.97 $ 112.72 $ 113.86 Solar REC's MWh 332.000 301.000 240.000 182.000 125.000 71.000 104.000 144.000 199.000 - 1,698.000 MWh $ Solar REC (one month lag)* 142.98 140.56 138.42 138.42 138.42 138.42 138.42 138.42 138.42 - $ - MWh $ Non-Solar Energy $ 77.09 $ 68.05 $ 61.11 $ 66.10 $ 76.67 $ 55.52 $ 70.16 $ 107.69 $ 53.49 $ 62.91 Note: Solar REC's are one month behind due to the time the invoice is received.