Attachment

UTILITY COMMITTEE AGENDA JUNE 11, 2012 - 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. McKee Run Generating Station Industrial Wastewater Discharge System 2. Proposed Resolution No. 2012-11 - Adoption of the American Public Power Association (APPA) Safety Manual 3. Annual Engineering Consultant's Report on the Operation and Maintenance of the Electric System - Fiscal Year 2011 (Deferred by Committee on April 23, 2012 Due to Time Constraints) 4. FY 2013 Five-Year Capital Investment Plan (CIP) (Deferred by Committee on April 23, 2012 Due to Time Constraints) 5. Review of Utility Related Capital Investment Plan (CIP) (Electric and Water/Wastewater) 6. Updates A. Garrison Oak Technical Park Project B. Green Energy Funding and Programming C. National Pollution Discharge Elimination System (NPDES) Municipal Separate Storm Sewer Systems (MS4) Permit 7. Adjournment by 5:30 P.M. /tm S:\AGENDAS-MINUTES-PACKETS\Committee-Agendas\2012\06-11-2012 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.

ACTION FORM PROCEEDING: City Council DEPARTMENT OF ORIGIN: Public Utilities- Power Plant (NAES) DATE SUBMITTED: PREPARED BY: Vince Scire, Plant Manager SUBJECT: NEW CIP – Industrial Waste Water Discharge System McKee Run Generating Station and Exceptions in Capital Outlay REFERENCE: NA RELATED PROJECT: NA REVIEWED BY: EXHIBITS: Industrial Waste Water Discharge System CIP Industrial Waste Water Discharge System Presentation EXPENDITURE REQUIRED $272,000 AMOUNT BUDGETED: N/A FUNDING SOURCE (Dept./Page in CIP & Budget): N/A TIMETABLE: New CIP to be approved with expenditures to begin in 2012 upon Council approval and be completed in 2013 RECOMMENDED ACTION: Staff recommends approving the new CIP and transfer of funding from existing CIPs as detailed in the table below. BACKGROUND AND ANALYSIS: This project has been developed to address a change in wastewater discharge requirements identified during an internal program audit. Three main items are being addressed simultaneously. First, in the Fall of 2011, during a program assessment, it was identified that the McKee Run facility did not have metering in place for its sanitary wastewater discharge. Additionally, it was identified that due to changes in the Kent County code, the facility needed to apply for an Industrial Wastewater Discharge Permit (IWDP). Based on both these requirements, the facility needs to segregate its industrial and sanitary sewer flows, meter both discharges, and sample the industrial flows per Kent County requirements. Second, this project facilitates the diversion of the current National Pollutant Discharge Elimination System (NPDES) wastewater discharges at outfalls 004 and 005 to the Kent County WWTP. During the same wastewater assessment, and based on operational data supporting the decision to divert the flows, the cooling tower blowdowns will be re-routed from the McKee Run stream, to the Kent County sewer. Minimal additional work in the project scope has been required to make this change which will provide regulatory and operational flexibility to the facility during run times. The facility is at risk of not meeting the discharge parameters set forth by the Delaware River Basin Commission (DRBC) in Docket No. D-2009-014 CP-1. After evaluating various methods to comply, it was determined that the Kent County WWTP would be both willing and able to treat the cooling water discharge and this could be added into the already required IWDP application. This would also alleviate the need for the facility to conduct a thermal study of the discharge as required by the DRBC in the above Docket, a study which would likely provide no value, and cost in the tens of thousands of dollars to conduct. In the past, due to the infrequent running of the cooling towers, bacterial growth (enterococci) has been a NPDES permit limit of concern and great care must be taken to both disinfect and circulate the cooling tower water prior to discharge. Diverting this discharge to the sanitary sewer alleviates this risk. Third, as the wastewater discharge is currently routed, a large amount of dilution water must be sent to the cooling towers to maintain the discharge concentrations of Total Dissolved Solids (TDS) to remain below permit limits as set by the DRBC. Based on current data and calculations, and depending on the operating conditions, it is projected that water consumption will increase between 3 and 10 times to foster compliance. Additionally, it has been projected that if Unit 3 was to be called to run for an extended period of time such as longer than 1 week, that the TDS parameter would eventually rise to a level exceeding the permit limit due to restrictions on how much dilution water could be added. Permit non-compliance would be simply a matter of when, not if, under an extended operating scenario. This increased water usage also directly contradicts the efforts the facility has made to conserve water, especially in times of draught, when the extended operating scenario would be most likely to occur. In summary, the benefits to implementing this project include:  Maintaining regulatory compliance with City of Dover and Kent County Code and allow for proper billing to take place  Maintaining Regulatory compliance with Kent County, DRBC, and DNREC regulations/permits

 Alleviate the risk of fines and or Notice of Violations (NOV’s) as it relates to the wastewater system  Eliminate exposure to future DRBC and DNREC regulatory requirements as it relates to the facility NPDES permit  Reduced water consumption that preserves the water conservation efforts made by the facility in recent years  Reduced water billing based on the projected dilution water amounts currently required  Continued safe and efficient operation of the facility In the time since these needs were identified, an official application for an IWDP has been submitted to Kent County and the permit is ready to finalize. The permit includes an exception, granted by Kent County Levy Court, to discharge the cooling water to the sanitary sewer. The proposed permit also includes language specific to the McKee Run site that will allow for the operational flexibility needed to run the facility as required by the current demands placed on it. Preliminary engineering has been completed for the overall industrial wastewater system changes, and the site has developing estimated project costs based on the best available information. The next steps to be taken in the project are as follows:  Finalize Engineering for the project and submit to the City of Dover and Kent County for approval  Obtain final costs for both materials and labor based on the approved design  Obtain City of Dover approval for new project  Pre-Order materials & equipment ASAP  Schedule installation of system around projected run times and outage schedule(s)  Finalize Regulatory Process  Finalize Kent County IWDP (almost complete – working on final revisions)  Work with DNREC to convert NPDES to General Stormwater Permit  Negotiate DRBC docket modification and closure based on wastewater re-routing to Kent County This is a new project that was not identified or funded in the original 2012 Capital Budget. In order to support the funding of this new project , the table below identifies exceptions in Capital outlay for various original projects which will provide the needed offset in funding: Below is a table summarizing the budget impact of the proposed changes to the current approved Power Plant Capital budget: Approved 2012 Proposed 2012 CIP Original Projects budget Budget Notes Project workscope deferred to EG1102 Units #1-#2 Cooling Tower Life Extension $25,410.00 $0.00 2014 due to run time Work put on hold waiting for decision on continued EG1107 Units #1-#2 Boiler / Turbine Life Extension $196,331.00 $113,000.00 operation of Units 1 and 2. EG1112 Unit #3 Air Heater Expansion Joint $82,807.00 $77,000.00 Project Complete EG1113 Units #1-#2 Boiler Controls Upgrades $25,700.00 $28,000.00 Project Complete EG1114 Unit #3 Gas Line Modifications $20,207.00 $16,000.00 Project Complete EG1201 Unit #3 Boiler Air Heater $440,000 $395,000.00 Project Complete EG1202 Unit #3 Boiler Systems $130,000.00 $121,000.00 Includes 40k for fuel EG1203 Unit #3 ID and FD Fan Controls Upgrades $92,000.00 $81,000.00 Complete in May Workscope to be deferred due EG1206 McKee Run DI Controls Replacement $65,000.00 $0.00 to higher priority workscope EG1208 MCKee Run Switchyard Blast Walls $50,000.00 $45,000.00 Project Complete Reschedule to 2013 due to Unit EG1210 Unit #3 Cooling Water Line Inspection $25,000.00 $0.00 run time EG1211 Unit #3 Stack Repairs $25,000.00 $20,000.00 Project Complete EG1212 Unit 3 Turbine Inspection $424,000 $405,000.00 Project closeout remaining Total Original Projects $1,601,455 $1,301,000 Newly Proposed Project EG12XX Industrial Waste Water System $272,000 Total New Projects $272,000 Revised Total $1,573,000.00

City of Dover PROJECT TITLE: McKee Run Industrial Wastewater System FISCAL YEAR(S): 2012-13 PROJECT NO: TBD CATEGORY: Operations, Environmental DEPARTMENT: Electric Generation DEPT. RANKING: 1 NEW PROJECT? YES XX NO PROJECT DESCRIPTION: Install system equipment needed for Industrial Wastewater discharge of McKee Run cooling towers blowdown to Kent County Sewer System. All equipment required to meet Kent county permit requirements. Scope activities include the following: System Design (2012) - $30k , (2013)- $15k Purchase of piping, support, pumps, motors, flow meters (2012 - $30k, 2013- $73k) Tank Inspections and prep work (2013) - $10k Installation (2013) - $114k NEED, JUSTIFICATION, BENEFIT: This project is required to eliminate Non-Contact Cooling Water (NCCW) discharges to the McKee Run and divert the flow to the Kent Count Sewer System. This would eliminate the need to install a more costly system to comply with the Delaware River Basin Commission (DRBC ) Docket and the impending requirements of the Kent County Industrial Waste Water Discharge permit affecting McKee Run. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: This project has been deemed to be a lower cost alternative to addressing the DRBC docket requirements than a project that would be required to meet the DRBC Docket requirements currently in place for the McKee Run Generating Station. Delay would result in additional costs associated with performing a thermal study and subsequent Engineering study of streaming both during unit operations, as well as when the units are not running. Upon completion of these studies, system implementation would then need to proceed and be operational in the 2013 timeframe. THIS PROJECT IS RELATED TO THE FOLLOWING: Meet Environmental Compliance requirements. EXPLANATION OF IMPACT ON OPERATING BUDGET: Would expect this project to be funded outside the normal O&M budget. An anticipated result of this project will be lower environmental costs and regulatory requirements in the future. Currently, the plant has been discharging to Kent County Sewer System with no charge. This will no longer be the case regardless if this project is approved. TIME-LINE/CURRENT STATUS: This project will be initiated in fiscal 2012 and be completed in fiscal 2013 COMMENTS: FIVE-YEAR COST BREAKDOWN SCHEDULE: Prior to 2012 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 After 2016 TOTAL Planning and Design 30,000 15,000 45,000 Construction 124,000 124,000 Miscellaneous Equipment 30,000 73,000 103,000 Other TOTAL 60,000 212,000 272,000 FINANCING: Prior to 2012 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 After 2016 TOTAL TOTAL IMPACT ON OPERATING BUDGET: Description Prior to 2012 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 After 2016 TOTAL 2012-2016 Capital Investments Plan

Tie-In of the McKee Run Industrial Wastewater Flow to the Kent County Sewer System and Elimination of the NPDES Industrial Discharge Points May 31, 2012

Project Summary NAES Corporation is currently in the process of finalizing a project to provide metering for all wastewater discharges from the site per City of Dover and Kent County code. Additionally, to address and mitigate several potential National Pollutant Discharge Elimination System (NPDES) permit compliance issues with the current cooling water discharges, the cooling water will be re-routed to the Kent County WWTP via the existing City of Dover sanitary sewer collection system. 2

Project Background  As the result of a 2011 internal site assessment, it was identified that due to operational changes since the last assessment, the McKee Run Generating Station (MRGS) site is now required to meter wastewater flows as required under City of Dover code, as well as put in place an Industrial Wastewater Discharge Permit (IWDP) per Kent County code.  Several Delaware River Basin Commission (DRBC) docket and NPDES permit parameters are of concern, and difficulties may or have arisen in meeting them consistently during certain times of the year or under particular operating conditions.  Preliminary analysis shows compliance with DRBC docket parameters in particular may be impossible without significant capital investment, or possibly not at all under current anticipated operating scenarios.  Non-compliance with either the DRBC docket, or NPDES permit, could lead to Notice of Violations (NOV’s) and/or mandatory cessation of discharge which would lead to the facility being unable to operate, and likely lead to a compliance timetable where significant capital expenditures were mandated to continue operation of the facility. 3

Project Scope  Reconfiguration of existing Sanitary and Industrial Wastewater discharges to be fully segregated and metered per City of Dover (COD) and Kent County code  Re-routing of Industrial flow to utilize unused Fire Water Tank to buffer discharge  Addition of flow metering and control system to ensure all discharges are properly managed and metered to the COD collection system  Reconfiguration of existing combustion unit cooling water blowdowns to eliminate NPDES discharges and conserve water (3 to 10 fold lower water usage)  Elimination of current NPDES discharge permit and DRBC docket, and conversion to general stormwater permit thereby eliminating risk of non-compliance  Negotiation of new Kent County Industrial Wastewater Discharge Permit (IWDP) for the facility as required by code 4

Project Benefits The project will provide several key benefits to the facility which are as follows:  Proper wastewater billing through the City of Dover  Allow for reduced water consumption due to higher strength wastewater discharge  Alleviate regulatory compliance concerns over Temperature, Total Dissolved Solids, and Enterococci parameters  Provides continued operational flexibility required for the safe and efficient operation of the facility 5

Project Justification  Sewer discharge metering is currently required by the City of Dover for all discharges and there is currently no means to accomplish this with the existing system configuration.  Kent County IWDP code also requires that all wastewater discharges be metered.  A large portion of the piping and control changes would be required regardless of whether the outfalls were eliminated or not, so to maximize efficiency and minimize potential risk, the project encompasses the outfall diversion.  Additional benefit to eliminating NPDES Industrial discharges from a compliance, conservation, and budgetary standpoint (projected increase of 3- 10 fold increase over historic water usage rate based on 2011 testing)  Based on past DRBC actions, there is no guarantee that in the future, outfall parameters won’t be made further restrictive, thereby causing compliance/operational issues and/or further capital expenditures if this is not addressed now.  Diverting the wastewater discharge from the outfalls to the sanitary sewer will lessen the overall regulatory burden and risk to the facility and allow for the necessary operational flexibility required now and in the future. 6

Specific Compliance Risks  Applies to Outfall 004 and Outfall 005  Total Dissolved Solids (TDS) Limit of 1,000 mg/l (DRBC)  Outfall Max Discharge Temperature of 90oF (NPDES)  Outfall Max Discharge Temperature of 87oF (DRBC)  Receiving Water Body Max Temperature Increase of 5oF (DRBC)  A Thermal Study is mandated for completion by September 15, 2012, and a “constructive compliance schedule for the preferred compliance alternative” in Spring 2013 when the docket comes up for renewal. (DRBC)  For Outfall 005, current NPDES discharge limit of 1.1 x 109 total cell count Enterococci in effect as of 9/1/2011 (NPDES)  There is a current risk of exceeding TDS and/or Temperature parameters in normal daily operations  The DRBC will require the IWDP be in place for the facility prior to waiving the Thermal Study completion requirement of September 15, 2012. The IWDP will in turn have a construction schedule attached for project completion, likely 3-6 months. Therefore, the project will likely be required to be in place no later than December or April (depending on Kent County) of 2013. 7

System Design 8

Next Steps  Finalize Engineering for project  Obtain current costs for both materials and labor  Obtain City of Dover approval for new project  Pre-Order materials & equipment ASAP  Schedule installation of system around projected run times and outage schedule(s)  Finalize Regulatory Process  Finalize Kent County IWDP (almost complete – working on final revisions)  Work with DNREC to convert NPDES to General Stormwater Permit  Negotiate DRBC docket modification and closure based on wastewater re-routing to Kent County 9

City of Dover MAYOR AND COUNCIL DRAFT PROPOSED COUNCIL RESOLUTION NO. 2012-11 A RESOLUTION ADOPTING THE AMERICAN PUBLIC POWER ASSOCIATION (APPA) SAFETY MANUAL FOR THE CITY OF DOVER ELECTRIC UTILITY WHEREAS, the City of Dover owns a municipal electric utility employing a number of dedicated employees in the electric trade; and WHEREAS, it is the City’s goal to employ safe practices that will ensure the highest level of protection possible to all electrical utility employees; and WHEREAS, provisions of the American Public Power Association (APPA) Safety Manual are currently being utilized as policy within the City’s Electric Utility Department; and WHEREAS, official adoption of the APPA Manual will allow the City to meet the requirements of the Reliable Public Power Provider (RP3) Program. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: That the American Public Power Association (APPA) Safety Manual is adopted as the governing set of safety rules for its municipal electric utility employees. ADOPTED: * S:\RESOLUTIONS & PROCLAMATIONS\2012\Draft\2012-11 - Adoption of American Public Power Association (APPA) Safety Manual.wpd CARLETON E. CAREY, SR. THOMAS J. LEARY MAYOR COUNCIL PRESIDENT P.O. Box 475 ˜ Dover, Delaware ˜19903 Community Excellence Through Quality Service

Annual Engineering Consultant’s Report on the Operation and Maintenance of the Electric System Fiscal Year 2011 Electric Division City of Dover, Delaware Project No. 66212 April 2012

Annual Engineering Consultant’s Report on the Operation and Maintenance of the Electric System Fiscal Year 2011 Prepared for the Electric Division City of Dover, Delaware April 2012 Project No. 66212 Prepared by Burns & McDonnell Engineering Company, Inc. Kansas City, Missouri COPYRIGHT © 2012 BURNS & McDONNELL ENGINEERING COMPANY, INC.

April 18, 2012 Ms. Donna S. Mitchell, CPA Controller/Treasurer City of Dover 5 East Reed Street Weyandt Hall, Suite 300 Dover, Delaware 19901 City of Dover Annual Engineering Consultant’s Report Project No. 66212 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 submits this Annual Engineering Consultant’s Report for the fiscal year ended June 30, 2011. 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, as well as additional information 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 2011 expenditures and fiscal year 2012 budgets. In addition, an analysis of the balances of the Improvement and Extension Fund, as well as 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 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 64114-3319 Tel: 816 333-9400 • Fax: 816 333-3690 • www.burnsmcd.com

Ms. Donna Mitchell, City of Dover April 18, 2012 Page 2 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

2011 Engineering Consultant’s Report Table of Contents TABLE OF CONTENTS Page No. EXECUTIVE SUMMARY Introduction ........................................................................................................................ ES-1 Electric System Overview and Assessment ....................................................................... ES-1 Financial Assessment ......................................................................................................... ES-4 Conclusions ........................................................................................................................ ES-6 PART I - INTRODUCTION Purpose of Report .............................................................................................................. I-1 Organization....................................................................................................................... I-2 PART II – ELECTRIC SYSTEM OVERVIEW AND ASSESSMENT Electric System Overview.................................................................................................. II-1 Production Plant ........................................................................................................... II-3 Transmission and Distribution Plant ............................................................................ II-3 General Plant ................................................................................................................ II-4 Electric System Assessment............................................................................................... II-4 Electric Generating Stations ......................................................................................... II-4 Description .............................................................................................................. II-4 Management and Organization................................................................................ II-5 Major Equipment Operation and Maintenance ....................................................... II-6 Electric Generation Improvements .......................................................................... II-7 Condition Assessment ............................................................................................. II-8 Transmission and Distribution Systems ....................................................................... II-12 Safety ....................................................................................................................... II-13 System Reliability ................................................................................................... II-13 Power Quality .......................................................................................................... II-13 Operations and Maintenance ................................................................................... II-13 Design Standards and Specifications....................................................................... II-14 Transmission and Distribution Capital Improvements ............................................ II-15 Condition Assessment ............................................................................................. II-15 Conclusions .................................................................................................................. II-16 PART III – FINANCIAL ASSESSMENT Financial Results ................................................................................................................ III-1 Required Revenue Level............................................................................................... III-1 Electric Rates ................................................................................................................ III-2 Operating Results.......................................................................................................... III-2 Adequacy of Electric Rates .......................................................................................... III-7 Status of Revenue Bonds ................................................................................................... III-8 Insurance ............................................................................................................................ III-9 Operating and Reserve Accounts ....................................................................................... III-9 Electric Revenue Fund .................................................................................................. III-9 Electric Improvement and Extension Fund .................................................................. III-11 PART IV – CONCLUSIONS City of Dover, Delaware TOC-1 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Table of Contents LIST OF TABLES Table No. Page No. II-1 Year-End Plant in Service ............................................................................................ II-1 II-2 Fiscal Year 2012 Planned Capital Expenditures........................................................... II-2 II-3 Fiscal Year 2011 Operating Statistics ........................................................................... II-7 III-1 Annual Sales and Customers ........................................................................................ III-3 III-2 Annual Revenues and Sales Ratios............................................................................... III-4 III-3 Net Revenue Margins and Unaccounted For Energy ................................................... III-5 III-4 Comparative Statement of Revenues, Expenses, and Changes in Unreserved Retained Earnings ......................................................................................................... III-6 III-5 Debt Service Coverage Calculation .............................................................................. III-7 III-6 Debt Service Schedule of Electric Revenue Bonds ...................................................... III-8 III-7 Schedule of Insurance Coverage in Effect .................................................................... III-12 III-8 Schedule of Insurance Coverage in Effect .................................................................... III-13 III-9 Reserve Account Activity and Balances ....................................................................... III-14 LIST OF FIGURES Figure No. Page No. I-1 Organization ................................................................................................................. I-3 I-2 Administration .............................................................................................................. I-3 I-3 Electric Engineering ..................................................................................................... I-3 I-4 Electric Transmission & Distribution ........................................................................... I-4 ***** City of Dover, Delaware TOC-2 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

EXECUTIVE SUMMARY

2011 Engineering Consultant’s Report Executive Summary EXECUTIVE SUMMARY INTRODUCTION The 2011 Annual Engineering Consultant’s Report (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 has been retained as Engineering Consultant by the City of Dover, Delaware (City) for this purpose. 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 ninth annual Engineering Consultant’s Report prepared for the City by Burns & McDonnell. ELECTRIC SYSTEM OVERVIEW AND ASSESSMENT The Electric System owned by the City primarily consists of production plant, transmission plant, distribution plant, and general plant facilities. City of Dover, Delaware ES-1 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Executive Summary The City owns two power plants, the McKee Run Generating Station (McKee Run) and the VanSant Generating Station (VanSant). 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. Effective May 4, 2006, the City entered into a five-year Energy Management Agreement with PACE Global Asset Management (PACE), LLC of Fairfax, Virginia to assist the City with its energy procurement, energy sale, purchase of fuels, establishment and management of risk policies, the development and management of hedging protocols and related energy procurement challenges. The PACE contract expired June 30, 2011 and effective July 1, 2011, The Energy Authority, Inc. (TEA) began assisting the City with its energy management activities. Headquartered in Jacksonville, Florida, TEA is a non-profit energy manager owned by seven public utility systems operating across the nation. North American Energy Services Corporation (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 in the Electric System Overview and Assessment section of the Report. The Electric Division served approximately 22,915 customers at the end of FY 2011, over 19,730 of which were residential customers. The distribution facilities include 219 miles of overhead lines and 219 miles of underground lines connected through fifteen substations. The Engineering Consultant’s observations regarding the transmission and distribution systems are described in the Electric System Overview and Assessment section of the Report. Four of the 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 operational, the Electric Division provides power for the plant site. The Electric Division has one contract for providing transmission service through the Electric System. As previously stated, the Electric Division provides transmission service to NRG for the output of its 16-MW electric generator. City of Dover, Delaware ES-2 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Executive Summary General plant facilities consist primarily of Electric Division administrative and operations facilities and pollution control related equipment on McKee Run and VanSant. Other types of general plant include office furniture and equipment, transportation and power-operated equipment, and communication equipment. The various systems and components of the generating stations reviewed by the Engineering Consultant are listed below: Major Equipment Condition and Improvements Management and Organization  Steam turbines/generators  Safety  Boilers and auxiliaries  Training  Station cooling water systems  Fuel handling systems  Water treatment systems  Station electrical systems  Station control systems  General facilities Based on statements and information provided, 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 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. The Engineering Consultant’s observations regarding the generating stations and units are described in the Electric System Overview and Assessment section of the Report. 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 City of Dover, Delaware ES-3 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Executive Summary 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 done a good job of making appropriate upgrades and improvements which the Engineering Consultant has observed while conducting the reviews and assessments to complete the annual reports. The Engineering Consultant’s observations regarding the transmission and distribution systems are described in the Electric System Overview and Assessment section of the Report. FINANCIAL 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 2011. The Resolution requires that the Electric Division maintain a debt service coverage ratio of 1.25. 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: (1) The Current Expenses of the Electric System during the current fiscal years shown by the Annual Budget . . . for such fiscal year, and (2) 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.” 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 2011. 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 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 City of Dover, Delaware ES-4 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Executive Summary on July 1, 2007 and July 1, 2008. The July 2008 rate adjustments established the rate schedules utilized by the Electric Division today. Total energy sales increased from 708.5 GWh in FY 2010 to 734.1 GWh in FY 2011, an increase of 3.6 percent. Total revenue from sales to electric customers in FY 2011 was approximately $99.5 million, representing an increase of $1.4 million from FY 2010 rate revenue of approximately $98.1 million. In FY 2011, the average revenue per kWh for residential customers was 14.79 cents and the system-wide average price was 13.56 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 by its FY 2011 Energy Manager, PACE. From FY 2010 to FY 2011, the cost of power decreased from $72.8 million to $69.6 million. Net income decreased from $3.3 million in FY 2010 to $3.2 million in FY 2011. The net income decrease in FY 2011 was due in large part to operating transfers out, which reached a ten- year high of $8.9 million. 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 2009, FY 2010, and FY 2011 of 2.88, 4.24, and 5.45 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 insure against 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 ensure that moneys are 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 City of Dover, Delaware ES-5 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Executive Summary  Interest and Sinking Account Electric Improvement and Extension Fund  Depreciation Reserve Account  Future Capacity Reserve Account The Engineering Consultant reviewed information on the accounts listed above and found that the balances in those accounts as of June 30, 2011, were consistent with the required or target balances. CONCLUSIONS Based on the reviews and assessments completed, it is the opinion of Burns & McDonnell 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 2012 Operating Budget are necessary and should provide improved reliability and power quality for the Electric System. 4. The balances as of June 30, 2011, 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 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 ES-6 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

PART I - INTRODUCTION

2011 Engineering Consultant’s Report Part I – Introduction PART I INTRODUCTION The City of Dover, Delaware (City) operates a municipally-owned electric utility system that serves approximately 22,915 customers within the City and surrounding areas. The service area of the electric utility is located in central Delaware; with the City itself located approximately 70 miles south of Philadelphia, Pennsylvania. PURPOSE OF REPORT This 2011 Annual Engineering Consultant’s Report (Report) has been prepared in compliance with the requirements of the City of Dover Electric Bond Resolution (Resolution) adopted December 23, 1985. Burns & McDonnell has been 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 (i) 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, (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, City of Dover, Delaware I-1 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part I – Introduction (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.” ORGANIZATION The Public Utilities Director is responsible for the overall management of the Public Utilities Department. The Public Utilities Director oversees the day-to-day operations of the Electric, Water, and Wastewater Divisions and manages the Division’s staff. The Director also provides oversight of the Power Plant budget and monitors the contracts the energy coordinator and the power generation operator/manager. The Electric Division is organized into three 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. Lastly, it is responsible for the operation of a 24/7 system operations control center, referred to as System Operations. 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 problems and oversees the work of tree trimming contractors. Figures I-1 through I-4 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 47 at the time the FY 2012 budget was issued. City of Dover, Delaware I-2 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part I – Introduction Figure I-1: Organization City Manager Public Utilities Director Electric Transmission Administration (4) Electric Engineering (15) & Distribution (28) Figure I-2: Administration Dept. Budget and Staff Supervisor (1) Administrative Assistant (1) Account Clerk II (2) Figure I-3: Electric Engineering Engineering Services Manager Engineering Crew Leader (1) Substation Crew Leader (1) Systems Operations Crew Leader (1) Engineering Fieldworker (2) Relayman (2) Electric System Operators (4) Electrical Engineer (1) Draftsman (1) Substation Foreman (1) City of Dover, Delaware I-3 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part I – Introduction Figure I-4: Electric Transmission & Distribution T & D Supervisor Senior Lineman (3) Electric Meter Tech Crew Leader (1) Journeyman Lineman (9) Electric Meter Tech II (2) Lineman 2nd Class (5) Lineman 3rd Class (3) Ground Worker (3) Stores Coordinator I (1) The subsequent sections of the Report provide a discussion of the required reviews and inspections conducted pursuant to Section 504 of the Resolution. Part II describes the assessment of the Electric System and its condition. Part III presents the financial results for the Electric Division, including an analysis of the adequacy of revenues provided by the electric rates. Part IV summarizes the conclusions of Burns & McDonnell regarding the operation and maintenance of the Dover Electric System. In the preparation of the Report, Burns & McDonnell reviewed and analyzed maintenance records, audited financial statements, and other data provided by the City. Burns & McDonnell has relied on the information provided without independent verification, 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 I-4 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

PART II – ELECTRIC SYSTEM OVERVIEW AND ASSESSMENT

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment PART II ELECTRIC SYSTEM OVERVIEW AND ASSESSMENT ELECTRIC SYSTEM OVERVIEW The Electric System owned by the City of Dover, Delaware (City), primarily consists of production plant, transmission plant, distribution plant, and general plant facilities, and construction work in progress. Table II-1 displays the year-end balances of the various plant components for FY 2009 through FY 2011. Table II-2 itemizes the specific capital investment plan projects and anticipated expenditures for FY 2011, as well as projections for other components included in the FY 2012 budget. Table II-1 YEAR-END PLANT IN SERVICE City of Dover Electric Division FY 2009 FY 2010 FY 2011 Capital assets, not being depreciated Land $ 1,458,066 $ 1,458,066 $ 1,458,066 Construction in progress 17,272,520 12,772,089 424,809 Total capital assets, non-depreciable $ 18,730,586 $ 14,230,155 $ 1,882,875 Capital assets, being depreciated Buildings $ 16,676,093 $ 16,922,580 $ 17,383,566 Production 60,028,422 62,442,716 63,408,937 Transmission 20,821,161 22,651,256 32,558,944 Distribution 49,431,989 55,811,945 59,824,248 Administration 1,519,649 1,530,413 1,551,280 Vehicles 674,610 624,428 622,236 Total capital assets, being depreciated $ 149,151,924 $ 159,983,338 $ 175,349,211 Less accumulated depreciation for: Buildings $ (10,180,242) $ (10,574,839) $ (10,992,065) Production (37,316,699) (38,692,760) (39,931,442) Transmission (7,369,638) (8,052,226) (9,206,982) Distribution (20,962,765) (22,260,895) (23,817,302) Administration (937,556) (1,029,427) (1,102,778) Vehicles (405,418) (427,752) (435,188) Total accumulated depreciation $ (77,172,318) $ (81,037,899) $ (85,485,757) Total capital assets, being depreciated, net 71,979,606 78,945,439 89,863,454 Total capital assets, net $ 90,710,192 $ 93,175,594 $ 91,746,329 In FY 2011, the Electric System experienced an increase in the annual system peak demand and a decrease in annual energy sales from the previous year. The Electric System experienced its peak at 3 City of Dover, Delaware II-1 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment p.m. on June 9, 2011 when demand reached 164.6 MW. For the year, approximately 734.1 GWh of energy were sold, a decrease of 3.6 percent from the preceding year. The Electric Division projects energy sales to decrease in FY 2012 to 710.0 GWh, a decrease of 3.3 percent. From FY 2012, the Electric Division expects annual energy sales to remain relatively constant through FY 2016. Table II-2 FISCAL YEAR 2012 PLANNED CAPITAL EXPENDITURES City of Dover Electric Division Electric Engineering Projects: Distribution System Upgrades $ 500,000 Lighting Project and Rehabilitation 50,000 Substation Equipment & Fencing (Division St) 40,000 SCADA Master Hardware Replacement 75,000 Transmission Line Maintenance Program 75,000 Distribution Feeder Replacement Program 377,510 Distribution Capacitors - Overhead 50,000 Distribution Capacitors - Underground 50,000 Frazier Substation Reliability Upgrade 155,000 Substation PT & CT Replacement Program 267,715 Vehicles, Trucks, & Equipment 150,491 Subtotal Electric Engineering Division $ 1,790,716 Electric Transmission & Distribution Projects: New Developments - UG Transformers $ 600,000 Vehicles, Trucks, & Equipment 48,337 Subtotal Electric Transmission Division $ 648,337 Electric Generation Projects: McKee Run Switchyard Blast walls $ 50,000 McKee Run Preservation of Structures 38,000 McKee Run Demineralizer Replacement 65,000 Unit 3 - Stack Repairs 25,000 Unit 3 Boiler Air Heater 440,000 Unit 3 Boiler Systems 130,000 Unit 3 - Gas Modification 36,206 Unit 3 FD & ID Fan Controller Upgrade 92,000 Unit 3 DCS Computers & Software Upgrades 85,000 Unit 3 Auxiliary System Components 113,000 Unit 3 Turbine Outage/Inspections 348,000 Unit 3 Cooling Water Line Replacement 25,000 Unit 3 Air Heater Expansion Joint 82,807 Units 1 & 2 Life Extension 196,331 Units 1 & 2 Cooling Tower Life Extension 25,410 Units 1 & 2 Control Modifications 25,700 VanSant component replacements 50,000 McKee Run Equipment replacements 70,000 Subtotal Electric Generation Division $ 1,897,454 Electric Metering Division Vehicles, Trucks, & Equipment $ 20,000 Total Planned Capital Investment Projects $ 4,356,507 City of Dover, Delaware II-2 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment Production Plant The City owns two power stations, the McKee Run Generating Station (McKee Run) and the VanSant Generating Station (VanSant). 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. Effective May 4, 2006, the City entered into a five-year Energy Management Agreement with PACE Global Asset Management (PACE), LLC of Fairfax, Virginia to assist the City with its energy procurement, energy sale, purchase of fuels, establishment and management of risk policies, the development and management of hedging protocols and related energy procurement challenges. The PACE contract expired June 30, 2011 and effective July 1, 2011, The Energy Authority, Inc. (TEA) began assisting the City with its energy management activities. Headquartered in Jacksonville, Florida, TEA is a non-profit energy manager owned by seven public utility systems operating across the nation. At the time of the Report, TEA was currently completing a useful life study focusing on Units 1 and 2 at McKee Run. The purpose of the study is for financial due diligence and proper accounting. A similar study was completed several years ago by the City’s former energy manager, PACE. North American Energy Services Corporation (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. Transmission and Distribution Plant The service area includes 44 miles of overhead transmission lines, 0.12 miles of underground transmission lines, 175 miles of overhead distribution lines and 219 miles of underground distribution lines. Four 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. As previously stated, 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 City of Dover, Delaware II-3 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment Combustion Turbine which ties directly to the Kent Substation and is not part of the Dover transmission system. 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 and the City funds all replacements and upgrades required to maintain 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- related equipment, transportation and power-operated equipment, and communication equipment. Burns & McDonnell did not specifically assess the items in the general plant category for the Report. ELECTRIC SYSTEM ASSESSMENT Burns & McDonnell, the Engineering Consultant to the City, made observations and conducted assessments of the Electric System assets in support of the development of this annual Engineering Consultant’s Report. The findings of Burns & McDonnell from the review of the City’s Electric System are documented herein. Electric Generating Stations On February 22, 2012, 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. Phillip Kosek, the Plant Administration and Environmental Health & Safety Manager. Description: 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. City of Dover, Delaware II-4 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment 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. Management and Organization: Station management is very well organized and knowledgeable, and takes a logical approach to the operation and maintenance of the generation facilities. Mr. Vince Scire serves as the Plant Manager. The management/leadership team consists of eight members including Mr. Scire. The Administrative & Employee Health and Safety Manager, Material Management Coordinator, and O&M Manager, all report directly to Mr. Scire. An Administrative Specialist position is currently open at the plant. This position is part of the management/leadership team as well. The O&M Manager oversees a Maintenance Supervisor, a Compliance Specialist and four Operations teams. Each operations team consists of two supervisors 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 planner, 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 28 employees, with 32 approved positions. 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. An employee-run safety committee is 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. There were no restricted work days or lost time accidents reported in FY 2011. NAES ended the year with 22,831 man-hours worked with no OSHA recordable accidents. 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 City of Dover, Delaware II-5 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment orientation covers a multitude of subjects from employee benefits to a review of the various Station operating manuals. For operator training, the Employee Development and Qualification Program (EDQP) has been established. EDQP is a formal program for training operators to progressively advance to positions with additional responsibilities. 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. 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. Four employees completed formal training and received certification for Hazardous Waste Management: Resource Conservation and Recovery Act (RCRA) and US Department of Transportation (DOT) Regulations in FY 2011. The training was completed in East Windsor, New Jersey on April 6, 2011 and administered by Nexeo Solutions of Dublin, Ohio. Major Equipment Operation 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 relatively large number of starts per year and low annual capacity factor. Table II-3 summarizes the major FY 2011 operating statistics. The large amount of time that units are not operating allows for maintenance and repair of the units. As a result, the FY 2011 overall equivalent availability factor for the generation facilities averaged 67.6 percent. Low net capacity factors are partially offset by Pennsylvania New Jersey Maryland Interconnection (PJM) capacity credits. In FY 2011, approximately $11.4 million of PJM capacity credits helped cover the fixed operating and maintenance costs of the Electric System. PJM capacity credits are expected to continue to provide similar benefits in FY 2012 and beyond. Electronic 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. City of Dover, Delaware II-6 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment Table II-3 FISCAL YEAR 2011 OPERATING STATISTICS City of Dover Electric Division Rated Net Net Heat Capacity - Production - Net Capacity Rate Number of Unit Number MW MWh Factor Btu/kWh Starts VanSant 39 5,148.0 1.43% 13,300 39 McKee Run Unit 1 17 411.5 0.28% 15,804 3 Unit 2 17 1,408.8 0.95% 13,782 5 Unit 3 102 47,297.8 5.21% 11,464 49 Total 175 54,266.1 3.54% 96 Forced Equivalent Outage Operating Service Availability Unit Number Hours Hours Factor Factor VanSant - 154.7 1.77% 97.17% McKee Run Unit 1 579.8 43.0 0.49% 63.18% Unit 2 - 159.7 1.82% 69.80% Unit 3 6.3 714.7 8.16% 69.73% Total 586.1 1,072.1 12.24% 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, 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. Electric Generation Improvements: The following describes completed, on-going, and planned improvements to the City’s generation assets: City of Dover, Delaware II-7 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment Recently Completed: On-Going:  DOE Grant - Photovoltaic Panels  McKee Run Preservation of Structures  McKee Run & VanSant Arc Flash  Unit 3 - Gas Modification  McKee Run Driveway Repaving  Unit 3 Air Heater Expansion Joint  Unit 3 Fire Protection System  Units 1 and 2 Life Extension  Unit 3 Cooling Tower Life Extension  Units 1 and 2 Cooling Tower Life Extension  Unit 1 Outage FY 2011  Units 1 and 2 Control Modifications  Unit 2 - Boiler Inspection & Repair  McKee Run Equipment Replacements  VanSant CT Mark IV Upgrades  Work Management Software Replacement Planned:  McKee Run Demineralizer Replacement  Unit 3 Turbine Outage/Inspections  McKee Run Turbine Level Window  Unit 3 Cooling Water Line Replacement Modification  Unit 3 Generator Repairs  McKee Run High Energy Piping  Units 1 and 2 Stack Repairs  Unit 3 - Stack Repairs  Units 1 and 2 Boiler Repairs  Unit 3 Boiler Air Heater  Units 1 and 2 Component Repairs  Unit 3 Boiler Systems  VanSant Capacity Increase  Unit 3 FD and ID Fan Controller Upgrade  VanSant Component Replacements  Unit 3 DCS Computers & Software  Metering System Upgrades Upgrades  Unit 3 Auxiliary System Components Condition Assessment: The following is a summary of the condition assessment of McKee Run major equipment and VanSant as presented by the NAES Corporation staff. Burns & McDonnell made no internal assessments of equipment during the facility tour. 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. McKee Run Unit 3 turning gear engagement problems were reported in the summer 2010 outage report. Plant staff developed a list of parts needed to complete the appropriate repairs. Plans were made to replace both mating clutch ends during the spring 2010 outage. Delays in parts availability postponed the planned repairs until FY 2012. XL Insurance completes inspections of the Energy Division production facilities on an annual basis. After each inspection the insurance provider issues a report detailing its risk reduction recommendations. A recommendation following the FY 2010 inspection addressed safety. XL Insurance recommended the City of Dover, Delaware II-8 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment installation of a permanent fire protection system for the turbine generator bearings at McKee Run. The City completed the installation of the system in FY 2011 for Unit 3. The City and XL Insurance agree that portable foam generating carts are sufficient fire protection for Units 1 and 2, due to their light use. In FY 2011, the McKee Run Units 1 and 2 turbine generators were degassed and removal of hydrogen fill piping was completed. The existing hydrogen fill piping was replaced with stainless steel piping to help reduce corrosion. Once the piping was installed it was checked for leaks. No leaks were reported. No other major repairs or replacements were required for the turbine/generators in FY 2011. Boilers and Auxiliaries: Boiler inspections are conducted every year on each of the boilers. Each fiscal year, the inspections on each boiler 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. In FY 2010, McKee Run Unit 1 experienced a tube failure and excursion and consequently was shut down. The City hired a contractor to supply replacement parts and repair the tube by replacing a tube section. After an internal inspection, plant staff made the decision to replace six additional tubes in Unit 1. The City subsequently hired inspectors to examine the repaired unit and provide recommendations for additional repairs and inspections. These maintenance recommendations helped determine certain projects to be completed during future outages. In FY 2011, outlet duct expansion joint was replaced at Unit 3. Operations removed the appropriate insulation and lagging to prepare the duct. The Electric Division contracted Apex to complete the installation the equipment. A complete seam weld was utilized to seal the joint and the job site was cleaned. 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, the City has met the recommendation by implementing a program that will examine the high energy piping systems on a five-year basis, beginning in 2014. 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 Unit 1 and Unit 2 condensers during the spring FY 2011 outage. All the tubes in each unit were cleaned utilizing City of Dover, Delaware II-9 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment 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. Projectile tube cleaning was last completed in the nineteen eighties. 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. Fuel Handling Systems: Natural gas comes into the station in a 4-inch diameter 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 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 2011. 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 graphically compared to control limits. Adjustments are then made as required. Boiler feed water is treated city water (well water from 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 is currently undergoing the approval process with Kent County to obtain an integrated waste water permit to be able to discharge cooling water to the sewer system. No major issues were reported at the time of this Report. Steam purity is not continuously monitored. Samples are taken 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 recommended the City implement lay-up procedures to protect water systems from corrosion. In FY 2011, the City worked to update plant procedures to conform to NAES standards. City of Dover, Delaware II-10 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment In FY 2011, the station did not experience any internal corrosion related failures, steam path deposits, or excessive condenser fouling. NALCO 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. 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 February 2011. Oil inspections and analyses were made. The inspector recommended that normal operation continue for all the transformers at the plant. Oil sampling is now completed twice per year on the GSUs. All plant transformers are examined annually. Following its FY 2008 annual inspection of the production facilities, XL recommended the City build blast walls around transformers at the plant. In FY 2011, the City continued to research blast wall protection. The revised FY 2012 Capital Budget includes costs for blast wall installation at McKee Run. Station Control Systems: Unit 1 and Unit 2 controls are electro-pneumatic and Unit 3 controls are a distributed control system (DCS). During the March FY 2011 spring outage, a controls upgrade was completed at McKee Run Units 1 and 2. The new devices will control igniters, pilots and shut down main fuel to protect the boiler. The project included the installation of new limit switches on main gas, pilot gas, and oil supply/return valves. The controls upgrades help the system meet national fire protection codes. 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 intends to seal the rest of the openings as part of its boiler controls and control room upgrades. 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 (NERC), Pennsylvania-New Jersey-Maryland (PJM) Interconnection and Mid-Atlantic Area Council (MAAC) compliance. The EHC system will be modified in the future to become a primary/primary system. No major issues were reported at the time of this Report. City of Dover, Delaware II-11 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment General Facilities: No major projects or improvements were completed to the General Facilities in FY 2011 other than routine maintenance and repairs. In general, the station facilities appeared clean and well maintained during the site visit. VanSant Generating Station: In general, the unit is operated infrequently, but is well maintained. 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. The annual overhaul and inspections were conducted at VanSant during FY 2011. No major problems were found. The VanSant unit now has the capability of completing black starts. Upgrades have been made to provide the capability of remote control of the unit; however, complications have not made remote control possible. XL Insurance completes inspections of the Energy 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 2011 inspection addressed safety. XL Insurance recommended the installation of gas detection equipment at the plant. The City is making an effort to meet this recommendation. No date has been set for its expected completion. No other major repairs or upgrades were made at VanSant in FY 2011. Transmission and Distribution Systems On February 22, 2012, 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. Steve Enss, the Engineering Services & System Operations Superintendent, provided information related to the transmission and distribution system. Mr. Enss also led a tour of the electric transmission and distribution system. 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. City of Dover, Delaware II-12 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment Safety: Mr. Jeremy Johnson – Public Utilities Director for the City, reported to Burns & McDonnell that there were no reportable injuries or lost workdays in FY 2011. 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. Power Quality: The Electric Division does not have any significant power quality problems. The overall power factor for the Electric System decreased from approximately 98.72 percent in FY 2010 to 98.43 percent in FY 2011. Power transformers are equipped with load tap changers regulate bus voltages at the distribution substations. Distribution transformers are equipped with no-load taps to 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. 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 nine 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, their performance is monitored by the Line Crew Superintendent. City of Dover, Delaware II-13 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment The Substation/Relay Maintenance Division is responsible for operation and maintenance of the substations and associated equipment. They perform visual inspections of substations, associated equipment, trip counter checks, battery systems checks, and oversee annual transformer condition assessments. TJ/H2b Analytical Services completed the annual transformer condition assessments in February FY 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. 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. No pole treatments were reported completed in FY 2011. 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 PVC 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 (EPR) insulation. The standard overhead distribution design utilizes a flat construction using 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. City of Dover, Delaware II-14 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment Transmission and Distribution Capital Improvements: The following describes completed, on-going, and planned improvements to the City’s transmission and distribution assets: Recently Completed: On-Going:  69-kV Feeders 3 and 4  Distribution System Upgrades  Replacement of 69-kV Breakers & Design  Lighting Project and Rehabilitation  Governors Avenue Rebuild  Mid City Substation Upgrades  Substation PT and CT Replacement  69-kV Substation Switch Replacement  New Developments – Underground  New Developments – Underground Transformers Conductors and Devices  Single Phase Meters Planned:  Horsepond Road Substation Reliability  Distribution Capacitors - Underground Upgrade  Outage Management System  Replace Substation Equipment and Fencing  System Automation & SCADA Equip.  McKee Run Yard Rebuild  Frazier Substation Reliability Upgrade  North Street 69-kV Cable Replacement  Horsepond Substation to Cartanza 69-kV  Distribution Feeder Replacement Program Rebuild  Transmission Relaying, Replacement and  69-kV Substation Switch Replacement Calibrations  General Scott Switchgear  Distribution Capacitors - Overhead Condition Assessment: The transmission and distribution system assessment included drive-by observations of a sample of the transmission circuits, distribution circuits, and substations. Most of the fifteen substations were physically observed during the tour. The following substations were observed during the tour:  Mid City Substation  Division Street Substation  Frazier Substation  St. Jones Substation  North Street Substation  Horsepond Substation  General Scott Substation  Cartanza Substation  Lebanon Substation The first stop during the transmission and distribution system evaluation was the Mid City Substation. In FY 2011, breaker change outs were completed. The oil breakers were replaced with SF6 breakers at the City of Dover, Delaware II-15 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment substation. Routine maintenance was completed at the Frazier Substation in September 2010 and reliability upgrades are scheduled to begin in FY 2012. Switch replacement was completed at the North Street Substation and cable replacement is on the Electric Division’s five-year capital plan. Switches were replaced at the General Scott Substation and the 69-kV breakers were replaced. The switchgear is scheduled for replacement in FY 2015 at the General Scott Substation. The Lebanon, Division Street, St. Jones, and Horsepond Substations appeared to be in good condition. Routine maintenance was completed in FY 2011 at these locations. There was little to no vegetation visible and the yards appeared to be well maintained. The Cartanza Substation was observed during the system tour. Cartanza is a 230/69-kV substation, which serves as a tie with Delmarva. Delmarva maintains the 230-kV side of the station, while the City of Dover maintains the 69-kV side. In FY 2011, tap changer seals were replaced at the substation. The Electric Division works Delmarva Power on transformer testing. Cartanza currently has four 69-kV lines leaving the station. The four circuits leave the station on two diverse pole lines, each holding a double circuit, until the circuits split down the line. This configuration allows for two separate loops for the entire 69-kV system to minimize total system failure should one common pole be critically damaged. Along the transmission and distribution system tour route, additional projects were detailed. The replacement of old underground circuits was completed in December FY 2011. Also, a number of insulators were replaced due to some breakdowns primarily due to age. Specifically, a transmission line near McKee Run had to be replaced because of the continual damage sustained by cooling tower exhaust. Another transmission line connecting a 10-MW Sun Power solar project was completed during the fall of FY 2011. Force labor completed the job. The transmission line featuring composition poles was completed in time to shave 6 MW from the system peak. In addition, the tour included driving through several residential areas that are served by underground distribution lines. The pad mounted transformers observed along the way appeared to be in good condition. Conclusions 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 City of Dover, Delaware II-16 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part II – Electric System Overview and Assessment 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. 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 done a good job of making 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 II-17 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

PART III – FINANCIAL ASSESSMENT

2011 Engineering Consultant’s Report Part III – Financial Assessment PART III FINANCIAL ASSESSMENT The financial results of the City of Dover, Delaware (City) Electric System for the fiscal year (FY) ended June 30, 2011, were generated through the management and operation of the Electric System by the Electric Division. A review of the financial results is provided below. FINANCIAL RESULTS The total revenue of the Electric Division during FY 2011 included revenue from charges for electric service, as well as miscellaneous revenues from items such as rents, penalties, reconnection fees, and emission credits. On the Comparative Statement of Revenues, Expenses, and Changes in Unreserved Retained Earnings table, revenues were compared to the Electric Division’s costs of providing services to its customers to determine whether the financial requirements of the Electric Division were met. Required Revenue Level 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 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: (1) The Current Expenses of the Electric System during the current fiscal years shown by the Annual Budget . . . for such fiscal year, and (2) 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.” City of Dover, Delaware III-1 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment Electric Rates Customers of the Electric Division of the City 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 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 July 2008 study established the rate schedules utilized by the Electric Division today. The current rate classes are listed below.  Residential  Primary  Small Commercial (1 Phase, 3 Phase, 1  Transmission Phase Heating, Church, and Municipal)  Outdoor Development Lighting  Medium Commercial (1 Phase & 3 Phase)  Private Outdoor Lighting  Large Commercial (3 Phase with Reactive  Water Pumping Metering)  Supplemental for NRG The City has retained Burns & McDonnell to begin a comprehensive cost-of-service and rate design study in fourth quarter FY 2012. The study will examine revenue adequacy, revenue responsibility, and revenue recovery for the Electric Division. The FY 2012 study will scrutinize customer classes and propose adjustments for demand rate components and any corresponding changes to energy charges. Operating Results Table III-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 2009 through FY 2011. After reaching a low in FY 2010 for the three-year period, annual energy City of Dover, Delaware III-2 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment sales increased to 734.1 GWh in FY 2011. On a percentage basis, the one-year increase equaled 3.6 percent. Table III-1 ANNUAL SALES AND CUSTOMERS City of Dover Electric Division FY 2009 FY 2010 FY 2011 Energy Sales (kWh) Residential 195,185,587 193,911,702 208,092,047 Commercial 248,757,087 237,608,938 243,985,517 Primary 156,096,547 148,381,527 153,879,249 Transmission 119,910,158 128,628,155 128,146,159 Total Energy Sales 719,949,379 708,530,322 734,102,972 Average Number of Customers (bills) Residential 19,685 19,785 19,730 Commercial 3,497 3,371 3,140 Primary 37 36 42 Transmission 4 4 3 Total Customers 23,223 23,196 22,915 Energy Per Customer Residential 9,915 9,801 10,547 Commercial 71,131 70,493 77,702 Primary 4,209,345 4,102,715 3,663,792 Transmission 30,615,359 32,157,039 42,715,386 Average Energy Per Customer 31,001 30,546 32,036 Table III-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 2011 was approximately $99.5 million, representing an increase of $1.4 million, or 1.5 percent from FY 2010. Total revenue from sales to electric customers includes utility tax revenue and power cost adjustment revenue. In FY 2011, the average rate revenue per kWh for residential customers was 14.79 cents and the total average rate revenue was 13.56 cents per kWh. The July 2010, through June 2011 national average monthly utility-level retail sales of electricity and associated revenue per kWh, as published by the US Energy Information Administration (EIA), were 11.66 and 9.91 cents per kWh, respectively. For a state- wide comparison, the EIA summarized the Delaware July 2010, through June 2011 average monthly City of Dover, Delaware III-3 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment utility-level retail sales of electricity and associated revenue per kWh to be 13.86 cents per kWh for residential customers and 11.90 cents per kWh across all sectors.1 Table III-2 ANNUAL REVENUES AND SALES RATIOS City of Dover Electric Division FY 2009 FY 2010 FY 2011 Revenue Residential $ 29,553,954 $ 29,320,410 $ 30,774,462 Commercial 37,547,855 36,856,716 36,572,134 Primary 18,988,842 18,025,548 18,450,238 Transmission 13,551,839 13,878,764 13,716,322 Total Revenue $ 99,642,490 $ 98,081,438 $ 99,513,156 Revenue/kWh Residential $ 0.1514 $ 0.1512 $ 0.1479 Commercial 0.1509 0.1551 0.1499 Primary 0.1216 0.1215 0.1199 Transmission 0.1130 0.1079 0.1070 Total Revenue/kWh $ 0.1384 $ 0.1384 $ 0.1356 Revenue Per Customer Residential $ 1,501 $ 1,482 $ 1,560 Commercial 10,737 10,935 11,647 Primary 512,059 498,402 439,291 Transmission 3,460,044 3,469,691 4,572,107 Average Revenue Per Customer $ 4,291 $ 4,228 $ 4,343 The Electric Division’s largest cost in providing electric service to its customers in FY 2011 was the wholesale cost of power. The Electric Division purchased power from the PJM Interconnection marketplace through its Energy Manager, PACE. From FY 2010 to FY 2011, the net cost of non- generated power decreased from $66.8 million to $62.7 million. 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. Reduced demand and energy costs were the main driver behind the reduction in net cost of non-generated power. The significance of power supply cost to the Electric Division is illustrated in Table III-3. The top portion of the table shows net operating revenue as the difference between total revenues generated by the rates 1 US Energy Information Administration, Form EIA-826 Data Monthly Electric Utility Sales and Revenue Data, http://www.eia.gov/cneaf/electricity/page/sales_revenue.xls (Mar. 19, 2012) City of Dover, Delaware III-4 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment and the cost of power supply.2 The ratios of power supply cost to sales revenues were calculated for FY 2009 through FY 2011. As illustrated, the Electric Division’s power supply cost as a percentage of rate revenue decreased from approximately 74.1 percent in FY 2010 to 70.0 percent in FY 2011. Table III-3 NET REVENUE MARGINS AND UNACCOUNTED FOR ENERGY City of Dover Electric Division FY 2009 FY 2010 FY 2011 Net Revenue Margins ($) Sales Revenues $ 99,642,490 $ 98,081,438 $ 99,513,156 Power Supply 74,928,897 72,695,602 69,616,076 Net Revenue Margin $ 24,713,593 $ 25,385,836 $ 29,897,080 Net Revenue Ratio 75.2% 74.1% 70.0% Unaccounted for Energy (kWh) Power Supply 751,171,000 751,250,000 768,254,000 Energy Sales 719,949,379 708,530,322 734,102,972 Unaccounted for Energy (Losses) 31,221,621 42,719,678 34,151,028 Percentage 4.2% 5.7% 4.4% Table III-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 III-3 presents these comparisons for the Electric Division for FY 2009 through FY 2011. As shown, the percentage ratio of the unaccounted for energy to the total energy purchased for FY 2011 was 4.4 percent. This is down from 5.7 percent in FY 2010. Table III-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 2009 through FY 2011. Net income was down slightly from FY 2010, totaling $3.2 million in FY 2011. Increased charges for electric service and reduced operating expenses equated to $2.9 million increase in net operating income 2 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 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 III-5 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment for the year; however, operating transfers out resulted in an annual net income decrease. Annual operating transfers out totaled ($8.9) million, the highest total for the past ten years. Table III-4 COMPARATIVE STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN UNRESERVED RETAINED EARNINGS City of Dover Electric Division FY 2009 FY 2010 FY 2011 Operating Revenues: Charges for Electric Service $ 99,642,490 $ 98,081,438 $ 99,513,157 Miscellaneous Services/Incomes 1,778,492 2,197,036 2,389,462 Total Operating Revenues $ 101,420,982 $ 100,278,474 $ 101,902,619 Operating Expenses: General Administration $ 4,084,382 $ 5,529,887 $ 5,298,869 Power Supply 74,928,897 72,695,602 69,616,076 Transmission/Distribution 4,032,931 3,146,123 3,083,714 Engineering 2,393,416 1,465,740 1,722,244 Metering 285,118 301,416 204,352 System Operations 559,743 496,195 486,894 Utility Tax 1,738,059 1,922,645 1,944,543 Depreciation 3,898,475 4,106,802 4,710,658 Retiree Health Care 1,830,903 531,843 1,839,110 Total Operating Expenses $ 93,751,924 $ 90,196,253 $ 88,906,460 Net Operating Income $ 7,669,058 $ 10,082,221 $ 12,996,159 Non-operating Revenues (Expenses) Interest Earned Operating Fund $ 141,310 $ 37,849 $ 832,145 Reserved Funds 1,041,655 865,878 511,922 Net Increase in Fair Value of Investments 239,624 (168,775) (861,216) Interest and Fiscal Charges (726,448) (648,581) (1,385,035) Bond Discount Amortized (113,206) (113,206) (21,579) Gain/(Loss) on Sale of Assets 115,638 17,984 16,830 Total Non-operating Revenues(Expenses) $ 698,573 $ (8,851) $ (906,933) Net Income Before Operating Transfers $ 8,367,631 $ 10,073,370 $ 12,089,226 Operating Transfers - In 1,332,350 - - Operating Transfers - Out (6,758,100) (6,758,100) (8,856,000) Total Net Operating Transfers $ (5,425,750) $ (6,758,100) $ (8,856,000) Net Income $ 2,941,881 $ 3,315,270 $ 3,233,226 City of Dover, Delaware III-6 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment 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.” In order to determine if the City and the Electric Division have met this requirement, the net income shown in Table III-4 was adjusted to include the interest on bonds, depreciation expense, and other non- cash income and expenses. Table III-5 presents the adjustments to net income and the determination of the revenues available for debt service for FY 2009 though FY 2011. Table III-5 DEBT SERVICE COVERAGE CALCULATION City of Dover Electric Division FY 2009 FY 2010 FY 2011 Net Income $ 2,941,881 $ 3,315,270 $ 3,233,226 Plus Excluded Expenses: Operating Transfers - In $ (1,332,350) $ - $ - Operating Transfers - Out 6,758,100 6,758,100 8,856,000 Depreciation 3,898,475 4,106,802 4,710,658 Interest and Fiscal Charges 726,448 648,581 1,385,035 Bond Discount Amortized 113,206 113,206 21,579 Gain/(Loss) on Sale of Assets (115,638) (17,984) (16,830) Less Excluded Income: Net Increase in Fair Value of Investments (239,624) 168,775 861,216 Interest Earned - Reserve Funds (1,041,655) (865,878) (511,922) Revenues Available for Debt Service $ 11,708,843 $ 14,226,872 $ 18,538,962 Maximum Principal and Interest in Any Year $ 4,058,700 $ 3,347,479 $ 3,401,954 Debt Service Coverage 2.88 4.25 5.45 Minimum Required Debt Service Ratio 1.25 1.25 1.25 As Table III-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. City of Dover, Delaware III-7 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment 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 III-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 III-5 is based on the total maximum debt service expense in any fiscal year. The FY 2011 calculation was based on the total FY 2016 debt service expense of $3,401,954. STATUS OF REVENUE BONDS At the end of FY 2011, the City had two series of outstanding electric revenue bonds that were issued pursuant to the Resolution. The 2004 Electric Revenue Bonds (2004 Bonds) were issued in 2004, in the amount of $22,535,000. These bonds were issued to refund the 1990 and 1993 bonds. 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 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 will be 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 III-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 $30,280,000. Table III-6 DEBT SERVICE SCHEDULE OF ELECTRIC REVENUE BONDS City of Dover Electric Division 2008 Electric Revenue Bonds 2010 Electric Revenue Refunding Bonds Total Annual Period Principal Interest Debt Service Principal Interest Debt Service Debt Service FY 2012 $ 390,000 $ 1,028,404 $ 1,418,404 $ 1,670,000 $ 178,267 $ 1,848,267 $ 3,266,671 FY 2013 410,000 1,006,954 1,416,954 1,700,000 253,100 1,953,100 3,370,054 FY 2014 430,000 986,454 1,416,454 1,740,000 219,100 1,959,100 3,375,554 FY 2015 450,000 964,954 1,414,954 1,810,000 166,900 1,976,900 3,391,854 FY 2016 475,000 942,454 1,417,454 1,890,000 94,500 1,984,500 3,401,954 FY 2017 695,000 918,704 1,613,704 - - - 1,613,704 FY 2018 730,000 883,954 1,613,954 - - - 1,613,954 FY 2019 765,000 847,454 1,612,454 - - - 1,612,454 FY 2020 800,000 815,706 1,615,706 - - - 1,615,706 FY21-34 16,325,000 6,618,185 22,943,185 - - - 22,943,185 Total $21,470,000 $ 15,013,223 $36,483,223 $ 8,810,000 $ 911,867 $ 9,721,867 $46,205,090 City of Dover, Delaware III-8 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment 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.” Tables III-7 and III-8 summarize itemized insurance coverage procured by the City for the period July 1, 2011, through June 30, 2012. 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. 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 ensure that moneys are available for specific purposes when they are needed. The accounts maintained within the Revenue and I&E Funds are listed herein. Electric Revenue Fund Electric Improvement & Extension Fund  Insurance Reserve Account  Depreciation Reserve Account  Contingency Reserve Account  Future Capacity Reserve Account  Electric Rate Stabilization Reserve Account  Interest and Sinking Account The following are descriptions of each Fund, their respective accounts and their purposes. 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 City of Dover, Delaware III-9 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment 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. Insurance Reserve Account: The Insurance Reserve Account was established by the City to provide for the funding of 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 2011 was $403,334. 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 2011 year-end balance was $1,056,788, which is equal to 1.04 percent of the FY 2011 revenues for the Electric Revenue Fund. 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 purchase power cost in any given year. Any excess of this amount will be refunded to customers by reducing the rate of the power cost adjustment. The account’s FY 2011 end-of-year balance was $6,160,167, which was 9.8 percent of the FY 2011 purchased power cost. 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 2004 and 2008 bonds as of June 30, 2010, was $3,519,382. City of Dover, Delaware III-10 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment Electric Improvement and Extension Fund: The I&E Fund was established in Section 507 of the Resolution. Funds are added 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, the Insurance Reserve Account, and from the State of Delaware. Section 510 of the Resolution indicates that, 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. 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 2011 was $10,412,221. 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 original target balance for this reserve was $5,000,000. The reserve balance at the end of FY 2011 was $9,178,771. Table III-9 presents FY 2009 through FY 2011 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 III-11 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment Table III-7 SCHEDULE OF INSURANCE COVERAGE IN EFFECT City of Dover Electric Division July 1, 2011 - Starr Technical Risks Agency June 30, 2012 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 Professional Fees; 250,000 Incidental Course of Construction; 5,000,000 Miscellaneous Unnamed Locations (except perils of Flood, Earth Movement and 500,000 Valuable Papers and Records; 100,000 Deductibles For each Occurrence giving rise to a claim under this policy, the Insured agrees to retain for its own account an initial amount of: In respect of Damage to Insured Property: $350,000 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 III-12 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment Table III-8 SCHEDULE OF INSURANCE COVERAGE IN EFFECT City of Dover Electric Division July 1, 2011 - XL Insurance June 30, 2012 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 For each Occurrence giving rise to a claim under this policy, the Insured agrees to retain for its own account an initial amount of: In respect of Damage to Insured Property: $350,000, Per Occurrence, except; $100,000, per Occurrence as respect Transit; In respect of Time Element loss (Extra Expen 45 days per Occurrence except; 72 hours Per Occurrence in respect of Service Interruption City of Dover, Delaware III-13 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

2011 Engineering Consultant’s Report Part III – Financial Assessment Table III-9 RESERVE ACCOUNT ACTIVITY AND BALANCES City of Dover, Delaware Insurance Contingency Electric Rate Bond Depreciation Future Reserve Reserve Stabilization Reserve Reserve Capacity Account Account Account Account Account Account Year Ended June 30, 2009 Balance in Account on July 1 $ 370,802 $ 894,169 $ 2,471,465 $ 3,257,091 $ 4,451,663 $ 8,457,351 Receipts Interest Earned 14,300 34,484 95,314 252,718 338,327 306,512 Appropriations - - 2,085,748 4,041,632 5,000,000 - Total Funds Available $ 385,102 $ 928,653 $ 4,652,527 $ 7,551,441 $ 9,789,990 $ 8,763,863 Disbursements Debt Service Payments - - - (6,046,632) - - Transfer to Capital Projects - - - - (2,000,000) - Balance in Account on June 30 $ 385,102 $ 928,653 $ 4,652,527 $ 1,504,809 $ 7,789,990 $ 8,763,863 Year Ended June 30, 2010 Balance in Account on July 1 $ 385,102 $ 928,653 $ 4,652,527 $ 1,504,809 $ 7,789,990 $ 8,763,863 Receipts Interest Earned 11,428 27,613 123,992 211,615 231,165 260,065 Appropriations - 83,500 - 4,066,610 - - Total Funds Available $ 396,530 $ 1,039,766 $ 4,776,519 $ 5,783,034 $ 8,021,155 $ 9,023,928 Disbursements Debt Service Payments - - - (2,445,212) - - Transfer to Capital Projects - - - - - - Balance in Account on June 30 $ 396,530 $ 1,039,766 $ 4,776,519 $ 3,337,822 $ 8,021,155 $ 9,023,928 Year Ended June 30, 2011 Balance in Account on July 1 $ 396,530 $ 1,039,766 $ 4,776,519 $ 3,337,822 $ 8,021,155 $ 9,023,928 Receipts Interest Earned 6,804 17,022 83,648 108,706 141,066 154,843 Appropriations - - 1,300,000 3,588,881 2,250,000 - Total Funds Available $ 403,334 $ 1,056,788 $ 6,160,167 $ 7,035,409 $ 10,412,221 $ 9,178,771 Disbursements Debt Service Payments - - - (3,516,027) - - Transfer to Capital Projects - - - - - - Balance in Account on June 30 $ 403,334 $ 1,056,788 $ 6,160,167 $ 3,519,382 $ 10,412,221 $ 9,178,771 ***** City of Dover, Delaware III-14 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

PART IV – CONCLUSIONS

2011 Engineering Consultant’s Report Part IV – Conclusions PART IV 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 2011 expenditures and FY 2012 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 2012 Operating Budget are necessary and should provide improved reliability and power quality for the Electric System. 4. The balances as of June 30, 2011 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 IV-1 Bur ns & McDonnell Engineering Company Electric Division Kansas City, Missouri

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City of Dover, Delaware Fiscal 2013 DRAFT Capital Investment Plan FY 13 thru FY 17 PROJECTS BY DEPARTMENT Department Project# Priority FY 13 FY 14 FY 15 FY 16 FY 17 Total Wastewater Management Inflow/Infiltration Removal WW1201 1 1,000,000 1,013,800 1,264,500 1,200,000 1,207,500 5,685,800 SCADA Equipment Technology Upgrade WW1202 2 29,300 29,300 Baltray Pump Station Replacement WW1204 4 100,000 100,000 Dover Brook Gardens Pump Station Upgrade WW1205 5 50,000 50,000 Brandywine Pump Station Replacement WW1206 3 350,000 350,000 McKee Road Pump Station Communator Replacement WW1207 6 45,000 45,000 Hazlettville Road Interceptor WW1301 8 30,000 740,000 770,000 Lakeview Drive Pump Station Replacement WW1302 9 52,000 450,000 502,000 Westover Pump Station and Force Main Upgrade WW1303 7 65,000 703,800 768,800 Garrison Farm Improvements WW1304 3 2,000,000 2,000,000 Retreat Pump Station Replacement WW1401 5 52,000 360,500 412,500 Rolling Acres Pump Station Replacement WW1501 3 52,000 360,500 412,500 Lepore Road Sanitary Sewer Main Upgrade WW1601 3 50,000 275,000 325,000 Delaware Tech Pump Station Replacement WW1602 4 52,000 403,000 455,000 Silver Lake Pump Station Replacement WW1701 4 52,000 52,000 Wastewater Management Total 3,721,300 2,959,600 1,677,000 1,662,500 1,937,500 11,957,900 Water Management Wellhead Redevelopment Program WD1203 1 70,000 75,000 80,000 82,500 85,000 392,500 Piney Point Well WD1301 4 450,000 450,000 1.0 MG Elevated Water Storage Tower WD1302 5 2,000,000 390,000 2,390,000 Future Columbia Well Installation WD1304 7 55,000 98,800 153,800 Garrison Farm Improvements WD1305 3 2,000,000 2,000,000 Emergency Generators WD1306 4 80,000 80,000 Water Quality Improvements WQ1201 2 479,000 905,000 960,000 950,000 1,600,000 4,894,000 Water Treatment Plant Process Improvements WQ1303 5 150,000 350,000 550,000 1,050,000 Water Management Total 5,134,000 1,520,000 1,390,000 1,582,500 1,783,800 11,410,300 GRAND TOTAL 8,855,300 4,479,600 3,067,000 3,245,000 3,721,300 23,368,200 Monday, May 14, 2012

City of Dover, Delaware Fiscal 2013 DRAFT Capital Investment Plan FY 13 thru FY 17 FUNDING SOURCE SUMMARY Source FY 13 FY 14 FY 15 FY 16 FY 17 Total Bond Proceeds 2,080,000 1,310,000 975,000 4,365,000 Impact Fee Reserve 550,000 1,317,000 165,000 165,000 119,800 2,316,800 Water/Wastewater Fund 6,225,300 3,162,600 1,592,000 2,105,000 3,601,500 16,686,400 GRAND TOTAL 8,855,300 4,479,600 3,067,000 3,245,000 3,721,300 23,368,200 Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1201 Project Name Inflow/Infiltration Removal Type Improvement Department Wastewater Management Useful Life 50 years Contact Public Works Director Category Water/Wastewater Priority 1 New Project: No Account Number: 417-6900-569.40-31 Time-Line: Description Total Project Cost: $8,835,800 This project identifies and corrects areas in the sanitary sewer collection system that are deteriorating and allowing groundwater to enter the sanitary sewer system through cracked pipes and/or joints. Video investigations of the lines are performed by in-house crews to determine the condition of subject pipes which may also help with the identification of sump pumps and other illicit connections to the system which will have to be removed by individual property owners. Investigations are occurring systematically through the sewer basins to establish projects for the following year. Sanitary sewer lines are also being inspected in conjunction with water quality improvement project areas to determine main condition. Smoke testing, pipe relining and or replacement are to occur each year. The wet weather which was experienced in both 2003 and 2009/2010/2011, exemplified the fact that the aging and deteriorating sanitary sewer system allows groundwater and rain water to enter the system. This in turn results in higher treatment charges from Kent County. In FY 2011 a new groundwater inflow adjustment charge was established as a result. It is critical to continue making improvements on a regular and planned basis to improve the integrity of the wastewater system. Weather occurs in a cyclical fashion and discrepancies between fees collected and charges received will likely happen again when groundwater and precipitation levels rise. Anticipated areas that will be rehabilitated include City of Dover maintained infrastructure that contributes to the following pump stations; Schoolview, Brandywine, Lafferty Lane and Dover East. Justification The wet weather experienced in both 2003 and 2009/2010/2011, highlighted the fact that we have an aging wastewater system that requires more attention to the condition of the old pipe network and more monitoring of illicit connections to the system. Inflow and infiltration are problems that all customers pay for since they are costs that are not assigned to an individual customer. Therefore, all customers are affected by expenses related to inflow and infiltration. Delaying or eliminating this project will result in continued higher treatment charges for wastewater flow to Kent County than is necessary. In addition, the reduction in available capacity in the City and county systems due to inflow and infiltration will reduce the capacity available for future growth. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 1,900,000 Construction/Maintenance 1,000,000 1,013,800 1,264,500 1,200,000 1,207,500 5,685,800 1,250,000 Total Total 1,000,000 1,013,800 1,264,500 1,200,000 1,207,500 5,685,800 Total Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 1,900,000 Water/Wastewater Fund 1,000,000 1,013,800 1,264,500 1,200,000 1,207,500 5,685,800 1,250,000 Total Total 1,000,000 1,013,800 1,264,500 1,200,000 1,207,500 5,685,800 Total Budget Impact/Other The project will reduce the operating budget over time due to the reduction in costs for sewage treatment paid to Kent County. All savings are cumulative. Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1202 Project Name SCADA Equipment Technology Upgrade Type Improvement Department Wastewater Management Useful Life 10-12 years Contact Public Works Director Category Water/Wastewater Priority 2 New Project: No Account Number: 417-6900-569.40-31 Time-Line: Description Total Project Cost: $196,300 This project involves the replacement of antiquated and/or obsolete remote terminal units (RTUs) at sewage pumping stations with new up-to- date serviceable SCADA equipment. Microwave radios, antennas, and enclosures would be upgraded as needed. The RTU and radio are the reporting equipment for the SCADA system (Supervisory Control and Data Acquisition) which reports, on a constant basis, the status of alarms at the City's pumping stations. The RTUs that are being replaced are outdated and unable to be repaired. Most of the equipment is installed in two steel cabinets mounted outside and are corroding. The new equipment is installed within a single fiberglass NEMA 4 enclosure. Each Year: order equipment and construct cabinets and back-plates by December; complete installation by June. Stations being completed in Fiscal 2013: University South, Maureen and Nottingham. Justification Replace failing antiquated equipment with completely new alarm reporting equipment to provide reliable SCADA system reporting and to prevent the need for costly non budgeted emergency repairs. Lack of alarms resulting in costly sewer backup claims. An RTU or radio failure would provide no advance warning of a failure and could result in costly sewer backup claims or sewage overflows into waterways. Equipment would become old, not supported, and obsolete. This an ongoing project that started in Fiscal 2008 and will be continued in Fiscal 2013. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 167,000 Miscellaneous 29,300 29,300 Total Total 29,300 29,300 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 167,000 Water/Wastewater Fund 29,300 29,300 Total Total 29,300 29,300 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1204 Project Name Baltray Pump Station Replacement Type Improvement Department Wastewater Management Useful Life 20-25 years Contact Public Works Director Category Water/Wastewater Priority 4 New Project: No Account Number: 417-6900-569.40-31 Time-Line: Description Total Project Cost: $125,000 The proposed project includes the in kind replacement of the grinder pumping station installed with the construction of the Baltray Subdivision in 1988. The station is approaching its anticipated life expectancy of 20-25 years. The grinder pumps, rail system, and electric controls and comminutor will be replaced. Grinder pumps require periodic repairs and replacement to maintain efficient operation. During previous pump removal, staff has noticed leaking seals and instability in the rail system for the pumps due to corrosion. Although grinder pumps are less costly than standard pumps used elsewhere, they are only appropriate under certain conditions. As a grinder pump is still effective at this location, it will be replaced in kind. Justification Replace the aging station with new components to prevent the need for costly non budgeted repairs to maintain operation. Pump failure resulting in a sewage spill into waterways or backup in a residence. Because of the age of the pump station, certain parts are no longer obtainable, and replacement of equipment is costly. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 25,000 Construction/Maintenance 100,000 100,000 Total Total 100,000 100,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 25,000 Water/Wastewater Fund 100,000 100,000 Total Total 100,000 100,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1205 Project Name Dover Brook Gardens Pump Station Upgrade Type Improvement Department Wastewater Management Useful Life 20-25 years Contact Public Works Director Category Water/Wastewater Priority 5 New Project: No Account Number: 417-6900-569.40-31 Time-Line: Description Total Project Cost: $65,000 This project would construct a force main priming loop to insure that adequate back pressure is provided to the check valves to maintain prime on the vacuum primed Smith & Loveless pumps and upgrade to maintain or increase capacity, which may be accomplished by installing new pumps. The loop is to create a high point in the force main above the pumps to provide a column of water against the check valves. The existing force main was originally installed with a constant slope away from the station to the receiving gravity sewer manhole. The force main drains by gravity away from the check valves providing very little static water pressure to hold check valves closed. Staff has observed numerous high wet well alarms due to pump loss of prime. Construction to be provided by in-house crew. Justification Reduce maintenance time of cleaning check valves weekly and on-call or overtime pay when the pumps lose prime. Pump prime failure could result in a sewage spill into waterways or backup in a residence. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 15,000 Construction/Maintenance 50,000 50,000 Total Total 50,000 50,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 15,000 Water/Wastewater Fund 50,000 50,000 Total Total 50,000 50,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1206 Project Name Brandywine Pump Station Replacement Type Improvement Department Wastewater Management Useful Life 20-25 years Contact Public Works Director Category Water/Wastewater Priority 3 New Project: No Account Number: 417-6900-569.40-31 Time-Line: Description Total Project Cost: $402,000 The proposed project includes the replacement of the Smith & Loveless package pumping station installed in 1977. The station has exceeded its life anticipated expectancy of 20-25 years and is in need of a capacity upgrade due to the increased growth in the basin. This station was installed for the Dover Country Club Apartments when City sewer was made available to this area. The site was previously outside the City's service area and had its own onsite sewer treatment system. Over the life span of this station, it has seen increased flows with the construction of Mallard Pond, Marsh Creek, and Westwind Meadows, and the extension of service to Fox Hall Drive and possible infiltration. Based on the monthly runtime hours, the station is currently operating at 130 percent of desired capacity. Staff has observed numerous pump clogs and failures in the past years. The Dover Country Club and Brandywine Condo sewer lines are old and possibly influenced by infiltration. Justification Replace the aged station with a completely new station to prevent the need for costly non budgeted repairs to maintain operation. Pump failure resulting in a sewage spill into waterways or backup in a residence. Because of the age of the pump station, certain parts are no longer obtainable, and replacement of equipment is costly. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 52,000 Construction/Maintenance 350,000 350,000 Total Total 350,000 350,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 52,000 Impact Fee Reserve 211,000 211,000 Total Water/Wastewater Fund 139,000 139,000 Total 350,000 350,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1207 Project Name McKee Road Pump Station Communator Replacement Type Improvement Department Wastewater Management Useful Life 20-25 years Contact Public Works Director Category Water/Wastewater Priority 6 -- New Project: No Account Number: 417-6900-569.40-31 Time-Line: Description Total Project Cost: $55,000 The proposed project includes the replacement of the comminutor at the influent line to the pumping station installed in 1995. This acts as a screen/grinder at the influent side of the station, cutting or stopping large debris from entering the wet well and clogging the pumps. The comminutor motor has run 24/7 since the initial startup of the pumping station. Justification Replace the aging equipment to prevent the need for costly unbudgeted repairs to maintain operation. Unbudgeted costly repairs to comminutor and damage to a pump when failure occurs. Pump failure resulting in a sewage spill into waterway or backup in a residence. Due to the age of the station, certain parts are no longer obtainable, and replacement of equipment is costly. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 10,000 Construction/Maintenance 45,000 45,000 Total Total 45,000 45,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 10,000 Water/Wastewater Fund 45,000 45,000 Total Total 45,000 45,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1301 Project Name Hazlettville Road Interceptor Type Improvement Department Wastewater Management Useful Life 90+ years Contact Public Works Director Category Water/Wastewater Priority 8 -- New Project: No Account Number: 417-6900-569.40-35 Time-Line: Description Total Project Cost: $770,000 This project, identified in the 2009 Wastewater Master Plan, identified sections of 15" gravity wastewater main as being overloaded in peak conditions, due to a negative slope in the pipe. This project calls for the upgrade of roughly 1,320 linear feet of wastewater main. The proposed upgrade will install 21" main at proper slope to provide adequate capacity and allow for future growth in the basin. Justification This project has been identified by the 2009 Wastewater Master Plan that the section of pipes is flowing nearly full, due to negative slope. This project will allow for proper capacity to handle current flow as well to allow for growth. Delaying or eliminating this project would result in overflow of wastewater material. In-house design in Fiscal 2013; construction in Fiscal 2014. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 30,000 30,000 Construction/Maintenance 740,000 740,000 Total 30,000 740,000 770,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Impact Fee Reserve 24,000 592,000 616,000 Water/Wastewater Fund 6,000 148,000 154,000 Total 30,000 740,000 770,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1302 Project Name Lakeview Drive Pump Station Replacement Type Improvement Department Wastewater Management Useful Life 20-25 years Contact Public Works Director Category Water/Wastewater Priority 9 -- New Project: No Account Number: TBD Time-Line: Description Total Project Cost: $502,000 This project calls for replacement of the Smith & Loveless package pumping station installed in 1971. The station has exceeded its life anticipated expectancy of 20-25 years and is need of a capacity upgrade due to high peak inflow rates. This station is located within the roadway of Lakeview Drive. The design portion of this project is to address the relocation of this station. Justification Replace the aged station with a completely new station to prevent the need for costly unbudgeted repairs to maintain operation. Pump failure resulting in a sewage spill into waterway or backup in a residence. Due to the age of the station, certain parts are no longer obtainable and replacement of equipment is costly. Design and bid in Fiscal 2013; construction in Fiscal 2014. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 52,000 52,000 Construction/Maintenance 450,000 450,000 Total 52,000 450,000 502,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Water/Wastewater Fund 52,000 450,000 502,000 Total 52,000 450,000 502,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1303 Project Name Westover Pump Station and Force Main Upgrade Type Improvement Department Wastewater Management Useful Life 20-25 years Contact Public Works Director Category Water/Wastewater Priority 7 -- New Project: No Account Number: 417-6900-569.40-31 Time-Line: Description Total Project Cost: $768,800 The proposed project includes the upgrade of the Smith & Loveless pumping station and force main installed in 1994. The pump station's available capacity will be consumed with the build out of the Village of Cannon Mills and will be in need of additional capacity in order to be able receive additional flow from the west, specifically, the new Dover High School. The project will include replacement of interior six-inch suction and discharge piping with eight-inch pipe and upgrade 1,400 feet of six-inch force main to 12-inch diameter pipe from the station to Electric Avenue. Justification Provide adequate capacity to receive additional sewage flow from the immediate vicinity due to development and annexation. Pump failure resulting in a sewage spill into waterways or backup in a residence. Design and bid in Fiscal 2013; construction in Fiscal 2014. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 65,000 65,000 Construction/Maintenance 703,800 703,800 Total 65,000 703,800 768,800 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Impact Fee Reserve 65,000 703,800 768,800 Total 65,000 703,800 768,800 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1304 Project Name Garrison Farm Improvements Type Improvement Department Wastewater Management Useful Life Unknown Contact Public Works Director Category Water/Wastewater Priority 3 New Project: Account Number: Time-Line: Description Total Project Cost: $2,000,000 Justification Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Construction/Maintenance 1,828,000 1,828,000 Other 172,000 172,000 Total 2,000,000 2,000,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Bond Proceeds 2,000,000 2,000,000 Total 2,000,000 2,000,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1401 Project Name Retreat Pump Station Replacement Type Improvement Department Wastewater Management Useful Life 20-25 years Contact Public Works Director Category Water/Wastewater Priority 5 New Project: No Account Number: TBD Time-Line: Description Total Project Cost: $412,500 The proposed project includes the replacement of the Smith & Loveless package pumping station installed in 1978. The station has exceeded its life expectancy of 20-25 years and is in need of a capacity upgrade due to the increased growth in the basin, specifically the proposed development at the Maple Dale Country Club, which had provided a cash-in-lieu contribution for upgrading the station proportional to the amount of flow they will be contributing to the pump station. Justification Replace the aged station with a completely new station to prevent the need for costly non budgeted repairs to maintain operation. Pump failure resulting in a sewage spill into waterways or backup in a residence. Because of the age of the pump station, certain parts are no longer obtainable and replacement of equipment is costly. Design in Fiscal 2014; construction in Fiscal 2015. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 52,000 52,000 Construction/Maintenance 360,500 360,500 Total 52,000 360,500 412,500 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Impact Fee Reserve 20,800 144,200 165,000 Water/Wastewater Fund 31,200 216,300 247,500 Total 52,000 360,500 412,500 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1501 Project Name Rolling Acres Pump Station Replacement Type Improvement Department Wastewater Management Useful Life 20-25 years Contact Public Works Director Category Water/Wastewater Priority 3 New Project: No Account Number: 417-6900-569.40-31 Time-Line: Description Total Project Cost: $412,500 This project calls for replacement of the Smith & Loveless package pumping station installed in 1973 in order to handle the commercial areas from Harrington Realty Shopping Center to the Howard Johnson Hotel. The station has exceeded its life anticipated expectancy of 20-25 years and is in need of a capacity upgrade due to the high peak inflow rates. This station experiences periods of high inflow rates due to the hotel occupancy and is susceptible to possible inflow/infiltration. Staff has observed numerous pump high wet well alarms due to high inflows and increased runtimes during wet months. Justification Replace the aged station with a completely new station to prevent the need for costly unbudgeted repairs to maintain operation. Pump failure resulting in a sewage spill into waterway or backup in a residence. Due to the age of the station, certain parts are no longer obtainable, and replacement of equipment is costly. Design and bid in Fiscal 2015; construction in Fiscal 2016. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 52,000 52,000 Construction/Maintenance 360,500 360,500 Total 52,000 360,500 412,500 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Impact Fee Reserve 20,800 144,200 165,000 Water/Wastewater Fund 31,200 216,300 247,500 Total 52,000 360,500 412,500 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1601 Project Name Lepore Road Sanitary Sewer Main Upgrade Type Improvement Department Wastewater Management Useful Life 90+ years Contact Public Works Director Category Water/Wastewater Priority 3 New Project: Yes Account Number: 417-6900-569.40-31 Time-Line: Description Total Project Cost: $325,000 This project calls for the replacement of approximately 374 linear feet of 8 inch gravity sewer main. Currently, the sewer main operates in a reverse slope condition, which overloads the pipe. The proposed upgrade will provide slope and adequate capacity for current flow to be carried to discharge. Justification This project will allow for proper capacity and slope to handle the current flow. Delaying or eliminating this project could result in overflow of wastewater material. Design and bid in Fiscal 2016; construction in Fiscal 2017. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 50,000 50,000 Construction/Maintenance 275,000 275,000 Total 50,000 275,000 325,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Impact Fee Reserve 20,800 21,000 41,800 Water/Wastewater Fund 29,200 254,000 283,200 Total 50,000 275,000 325,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1602 Project Name Delaware Tech Pump Station Replacement Type Improvement Department Wastewater Management Useful Life Unknown Contact Public Works Director Category Water/Wastewater Priority 4 New Project: Yes Account Number: 417-6900-569.40-31 Time-Line: Description Total Project Cost: $455,000 This project calls for replacement of the Smith & Loveless package pumping station installed in 1975 in order to handle the increased flows from the area. The station has exceeded its life anticipated expectancy of 20-25 years and is in need of a capacity upgrade due to anticipated increase flow. Justification Replace the aged station with a completely new station to prevent the need for costly unbudgeted repairs to maintain operation. Pump failure resulting in a sewage spill into waterway or backup in a residence. Due to the age of the station, certain parts are no longer obtainable, and replacement of equipment is costly. Design and bid in Fiscal 2016; construction in Fiscal 2017. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 52,000 52,000 Construction/Maintenance 403,000 403,000 Total 52,000 403,000 455,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Water/Wastewater Fund 52,000 403,000 455,000 Total 52,000 403,000 455,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WW1701 Project Name Silver Lake Pump Station Replacement Type Improvement Department Wastewater Management Useful Life Unknown Contact Public Works Director Category Water/Wastewater Priority 4 New Project: Yes Account Number: 147-6900-569.40-31 Time-Line: Description Total Project Cost: $427,000 This project calls for replacement of the Smith & Loveless package pumping station installed in 1982 in order to handle development in the area, as well as completely rehabilitate the wet well side of the pump station using the poly-triplex system liner. The station has exceeded its life expectancy of 20-25 years and is in need of a capacity upgrade to handle anticipated growth in the basin. Justification Replace the aged station with a completely new station to prevent the need for costly unbudgeted repairs to maintain operation. The wet well has deteriorated due to age and is subject to groundwater infiltration. Pump failure resulting in a sewage spill into waterways or backup in a residence. Because of the age of the pump station, certain parts are no longer obtainable and replacement of equipment is costly. Design and bid in Fiscal 2017; construction in Fiscal 2018. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future Planning/Design 52,000 52,000 375,000 Total 52,000 52,000 Total Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future Water/Wastewater Fund 52,000 52,000 375,000 Total 52,000 52,000 Total Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WD1203 Project Name Wellhead Redevelopment Program Type Improvement Department Water Management Useful Life 20-25 years Contact Public Works Director Category Water/Wastewater Priority 1 New Project: No Account Number: 417-6800-568.40-34 Time-Line: Description Total Project Cost: $940,962 This project will provide for rehabilitation and repair of each deep wellhead in an effort to maintain operations and/or increase/maintain the yield of each well as it relates to the permitted allocation. FY 2008; total well inspection and testing performed. FY 2009: Motors at Wells #6A and #9 were rebuilt, and wells #13R and #15 were redeveloped. FY 2010: Well #10. FY 2011: Well #4 redevelopment and well piping improvements at various well locations, as well as continued well testing. FY 2012: Well #1 redevelopment. FY2013: Work will be determined following the testing in FY2012. Justification The well screening and gravel pack requires cleaning over time due to a buildup of mineral deposits and foreign materials such as clay and silt. This maintenance effort is critical to ensure that production can continue to meet demand. It is also necessary to maintain the operational aspects of each well and provide repairs as needed to minimize downtime to maintain system capacity. Delaying or eliminating this project would result in the continued deterioration of the well screen, gravel pack, and well yield over time. It would also result in increased well downtime, emergency repairs, and decreased capacity. These issues can lead to increased flow pattern changes and water quality concerns. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 460,962 Construction/Maintenance 70,000 75,000 80,000 82,500 85,000 392,500 87,500 Total Total 70,000 75,000 80,000 82,500 85,000 392,500 Total Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 460,962 Water/Wastewater Fund 70,000 75,000 80,000 82,500 85,000 392,500 87,500 Total Total 70,000 75,000 80,000 82,500 85,000 392,500 Total Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WD1301 Project Name Piney Point Well Type Improvement Department Water Management Useful Life 50 years Contact Public Utilities Director Category Water/Wastewater Priority 4 New Project: No Account Number: 417-6800-568.40-31 Time-Line: Description Total Project Cost: $645,000 This project, identified by staff and confirmed by the 2006 Water Master Plan Update, proposes the drilling of a new Piney Point Aquifer Production Well to increase production capacity up to our current permitted allocation as well as increase system pressure and stabilize the chlorine residuals of the City. The proposed wellhead is planned to be located in Schutte Park. It is intended that the yield from a new production well will allow us to abandon one of our poorly performing wells. Planning started in Fiscal 2009. Design continued between 2010 and 2012. Construction to be completed in Fiscal 2013. Justification A reduction in long-term yield from our Piney Point Well is causing a greater reliance on our more costly aquifers. Delaying or eliminating this project would result in the continued reduction in our production capabilities under our permitted allocation, as well as our ability to meet projected demand increases. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 195,000 Construction/Maintenance 450,000 450,000 Total Total 450,000 450,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 195,000 Impact Fee Reserve 250,000 250,000 Total Water/Wastewater Fund 200,000 200,000 Total 450,000 450,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WD1302 Project Name 1.0 MG Elevated Water Storage Tower Type Improvement Department Water Management Useful Life 90+ years Contact Public Works Director Category Water/Wastewater Priority 5 New Project: No Account Number: 417-6800-568.40-31 Time-Line: Description Total Project Cost: $3,085,000 The proposed project, identified by staff and confirmed by the 2006 Water Master Plan Update, will construct a new 1.0 million gallon elevated storage tank within the distribution system. The planning, site selection and land acquisition was conducted between Fiscal 2009 and Fiscal 2012. For bonding purposes, the construction of the tank has been divided between two fiscal years. Construction is planeed for Fiscal 2013 and 2014. Justification This project was determined necessary by the 2006 Water Mater Plan Update in order to meet future storage volume requirements based upon demands and to aid in reducing low pressure areas and enhance fire suppression capability. Delaying or eliminating this project will result in preventing growth within the system, particularly; fire suppression measures will be compromised. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 695,000 Construction/Maintenance 2,000,000 390,000 2,390,000 Total Total 2,000,000 390,000 2,390,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 695,000 Water/Wastewater Fund 2,000,000 390,000 2,390,000 Total Total 2,000,000 390,000 2,390,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WD1304 Project Name Future Columbia Well Installation Type Improvement Department Water Management Useful Life 20-25 years Contact Public Works Director Category Water/Wastewater Priority 7 -- New Project: No Account Number: 417-6800-568.40-31 Time-Line: Description Total Project Cost: $562,700 This project, identified by staff and confirmed by the 2006 Water Master Plan Update, proposes the drilling of new shallow well to increase production capacity at the Water Treatment Plant to design levels of 5.0 million gallons per Day. This project is to be completed in conjunction with the Water Treatment Plant Process Improvements. The specific location of a proposed wellhead has not been determined at this time. The location will be selected in the planning and design phase. In addition, the yield from a new production well may allow us to abandon some of our poorly performing wells. Land costs are based upon the need of 1/4 acre of land for the project. This project will be designed in Fiscal 2013 to coincide with the Water Treatment Plant Process Improvements Design, Construction is planned for Fiscal 2018. Justification To meet increased water demand and fire suppression requirements. Delaying or eliminating this project would result in the continued reduction in our production capabilities under our permitted allocation, as well as limiting the City’s growth. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future Planning/Design 55,000 48,800 103,800 408,900 Land Acquisition 50,000 50,000 Total Total 55,000 98,800 153,800 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future Impact Fee Reserve 98,800 98,800 408,900 Water/Wastewater Fund 55,000 55,000 Total Total 55,000 98,800 153,800 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WD1305 Project Name Garrison Farm Improvements Type Improvement Department Water Management Useful Life Unknown Contact Public Works Director Category Water/Wastewater Priority 3 New Project: Account Number: Time-Line: Description Total Project Cost: $2,000,000 Justification Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Construction/Maintenance 1,828,000 1,828,000 Other 172,000 172,000 Total 2,000,000 2,000,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Water/Wastewater Fund 2,000,000 2,000,000 Total 2,000,000 2,000,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WD1306 Project Name Emergency Generators Type Improvement Department Water Management Useful Life Unknown Contact Public Utilities Director Category Water/Wastewater Priority 4 New Project: Account Number: Time-Line: Description Total Project Cost: $80,000 This project, identified in the 2006 Water Master Plan Update, would provide emergency generators for large production wells. Due to the inability of obtaining a homeland security grant, staff will pursue a partial grant from the Drinking Water State Revolving Fund (DWSRF). All generators purchased will be permanent fixtures at each site. Generator purchased in FY 2012 will support Well #2, FY 2013 will support Well #6 and FY 2014 will support Well #10. Currently, a portable generator is stationed at Well #10, after installation of permanent generator at Well #10; the portable generator will be used at medium sized production wells as needed. Justification This project will provide emergency power to wells for continued water production and reliability in the event of power disruptions or other emergencies. Delaying or eliminating this project would result in reduced or suspended water service in the event of power disruptions or other emergencies. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Equip/Vehicle/Furnishings 80,000 80,000 Total 80,000 80,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Bond Proceeds 80,000 80,000 Total 80,000 80,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WQ1201 Project Name Water Quality Improvements Type Improvement Department Water Management Useful Life 90+ years Contact Public Works Director Category Water/Wastewater Priority 2 New Project: No Account Number: 417-6800-568.40-31 Time-Line: Description Total Project Cost: $6,994,000 This project was first identified by staff and the 2006 Water Master Plan Update, and has since become further refined with the FY 2006 Water Quality Evaluation. Projects to be included under this category primarily consist of replacement or relining of old unlined cast iron water main within the City’s water distribution system; system upgrades to improve system control; and utilization of a consultant to provide additional design and evaluation services, as needed. Recent research and data collection has produced a Water Main Rehabilitation Priority List, based on several criteria to identify water mains that are in need of replacement or relining. Pipes will be upgraded according to the severity of the pipe condition, as well as coordination with the City of Dover’s Public Services Street Rehabilitation Program. Timeline/Current Status:between FY 2008 and FY 2010, the deep well contact chambers were designed and installed. Between FY 2008 and FY 2011 the water mains that were replaced include, Washington Street, Pennsylvania Avenue, South Street, Pear Street, West Street, Hazel Road, Maryland Avenue, American Avenue, Bayard Avenue, Greenhill Avenue, Bayard Avenue Alley and Loockerman Street. Operational efforts, such as flushing, will continue to occur on a routine basis. FY 2012 improvements include, N. Pennsylvania Ave., American Ave. Ext., Madison St., Rodney Rd., New Street, Ross Street and Bradford Street (near Wesley College). As part of the Water Main Rehabilitation Priority List, water lines were identified throught the City that require replacing/relining. The following water line rehab projects are scheduled for FY2013: William Street, West Street & Alley. As part of the Water Main Rehabilitation Priority List, water lines were identified throughout the City that requires replacement/relining. Using this as a guide the following water line rehabilitation projects are scheduled for FY 2013: William Street, West Street West Alley and West Street East Alley. Justification Water quality complaints have eroded consumer confidence in the City’s water supply as the water is perceived to be aesthetically unpleasant. In order to reduce complaints and potentially alleviate this problem, it is necessary to implement the improvements identified by staff, the 2006 Water Master Plan Update, and the FY 2006 Water Quality Evaluation. Delaying or eliminating this project will prolong customer dissatisfaction and further erode confidence in the City’s water supply. In addition, main rehabilitation and replacement, ensuring pipes do not significantly exceed the expected life cycle, is critical to provide a reliable supply of water for our customers and for fire suppression. Water leaks and breaks on older lines can have a significant impact on our ability to serve over time. Addressing the brown water and associated water quality concerns of the City’s water system will not only require capital improvements to the system but also operational changes. Some operation changes will result in no net effect on the operating budget, while others will need to be addressed in the development of future operating budgets. Such items include tools and supplies necessary to improve system sampling and monitoring as well as tools and supplies necessary to improve system-wide flushing operations. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 500,000 Construction/Maintenance 479,000 905,000 960,000 950,000 1,600,000 4,894,000 1,600,000 Total Total 479,000 905,000 960,000 950,000 1,600,000 4,894,000 Total Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 500,000 Bond Proceeds 960,000 950,000 1,910,000 1,600,000 Total Water/Wastewater Fund 479,000 905,000 1,600,000 2,984,000 Total Total 479,000 905,000 960,000 950,000 1,600,000 4,894,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # WQ1303 Project Name Water Treatment Plant Process Improvements Type Improvement Department Water Management Useful Life 20-25 years Contact Public Works Director Category Water/Wastewater Priority 5 New Project: No Account Number: TBD Time-Line: Description Total Project Cost: $1,050,000 This project, identified in the 2006 Water Master Plan Update, proposes process improvements to the existing Water Treatment Plant. Due to limitations with the Ozone Contactors, the capacity at the Water Treatment Plant is limited to 4.0 million gallons per day, as opposed to 5.0 million gallons per day, as originally designed. A consultant will be utilized to determine the best means and improvements necessary to increase the capacity. This project is to be performed in conjunction with the future Columbia Well installation. Planning is proposed for Fiscal 2013. Construction to begin in Fiscal 2015. Justification Process improvements will allow for capacity enhancements as well as improved ability to meet regulatory requirements. Delaying or eliminating this project can result in production capacity decreases, which could limit growth, and/or cause regulatory incompliance. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 150,000 150,000 Construction/Maintenance 350,000 550,000 900,000 Total 150,000 350,000 550,000 1,050,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Bond Proceeds 350,000 25,000 375,000 Water/Wastewater Fund 150,000 525,000 675,000 Total 150,000 350,000 550,000 1,050,000 Budget Impact/Other Monday, May 14, 2012

ELECTRIC FUND

City of Dover, Delaware Fiscal 2013 DRAFT Capital Investment Plan FY 13 thru FY 17 PROJECTS BY DEPARTMENT Department Project# Priority FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric Engineering Distribution Upgrades EE1200 1 400,000 400,000 400,000 400,000 400,000 2,000,000 Lighting Project and Rehabilitation EE1202 4 100,000 50,000 50,000 50,000 50,000 300,000 Frazier Substation Reliability Upgrade EE1205 9 610,200 610,200 Distribution Feeder Replacement Program EE1206 8 277,500 277,510 120,510 277,510 277,510 1,230,540 Distribution Capacitors and Controls EE1207 10 125,000 60,000 50,000 50,000 50,000 335,000 Transmission Line Maintenance Program EE1208 7 75,000 75,000 75,000 75,000 75,000 375,000 SCADA Master Hardware Replacement EE1209 6 75,000 75,000 69 kV Substation Switch Replacement EE1301 n/a 55,000 80,000 135,000 Horsepond Substation Reliability Upgrade EE1302 n/a 170,000 591,812 761,812 Division Street Substation Fence EE1304 n/a 70,000 70,000 General Scott Switchgear EE1400 n/a 50,000 800,000 300,000 1,150,000 Horsepond to Cartanza 69 kV Rebuild EE1500 n/a 330,467 330,467 69 kV Cable Replacement North Street EE1502 n/a 85,000 480,710 565,710 System Operations Monitoring EE1503 n/a 30,000 30,000 College Road to McKee Substation Feeders EE1504 n/a 307,000 307,000 McKee Run Yard Rebuild EE1600 n/a 450,000 700,000 1,150,000 Electric Engineering Total 1,932,700 2,334,322 1,747,977 1,783,220 1,627,510 9,425,729 Electric T & D New Developments EE1212 1 450,000 450,000 450,000 450,000 450,000 2,250,000 Electric T & D Total 450,000 450,000 450,000 450,000 450,000 2,250,000 Power Plant Units 1 & 2 Cooling Tower Repairs EG1102 8 37,300 37,300 McKee Run Unit 3 Boiler Systems EG1202 2 129,000 144,000 344,000 617,000 McKee Run Unit 3 Auxillary System Components EG1203 4 55,000 188,500 45,000 6,000 34,000 328,500 Van Sant Unit 11 Component Replacements EG1207 4 75,000 75,000 143,000 78,000 371,000 McKee Run & VanSant Preservation of Structures EG1209 n/a 42,000 165,000 142,000 349,000 McKee Run Unit 3 Turbine Repairs EG1212 1 115,000 1,031,000 10,000 1,156,000 McKee Run Units 1 & 2 Component Repairs EG1304 4 52,000 100,000 44,000 172,000 234,000 602,000 McKee Run Turbine Level Window Modification EG1306 6 85,000 85,000 McKee Run Unit 3 Air Heater Expansion Joint EG1307 7 80,000 80,000 McKee Run Unit 3 Stack Repairs EG1309 9 27,000 50,000 77,000 McKee Run Units 1 & 2 Stack Repairs EG1310 10 75,000 75,000 Van Sant Capacity Increase EG1311 n/a 550,000 550,000 McKee Run Unit 3 Generator Repairs EG1312 1 236,000 236,000 Units 1 & 2 Boiler Repairs EG1401 2 18,000 20,000 29,000 67,000 Unit 3 Cooling Tower Repairs EG1402 1 571,000 52,000 138,000 761,000 Unit 3 Cooling Water Line Repairs EG1403 n/a 240,000 240,000 McKee Run High Energy Piping Repairs EG1406 1 80,000 80,000 Metering System Upgrades EG1407 6 25,000 125,000 150,000 McKee Run Building Equipment Replacement EG1601 n/a 110,000 50,000 160,000 Van Sant Unit 11 Major Overhaul/Inspection EG1701 3 900,000 900,000 Monday, May 14, 2012

Department Project# Priority FY 13 FY 14 FY 15 FY 16 FY 17 Total Power Plant Total 1,441,300 1,849,500 1,024,000 677,000 1,930,000 6,921,800 GRAND TOTAL 3,824,000 4,633,822 3,221,977 2,910,220 4,007,510 18,597,529 Monday, May 14, 2012

City of Dover, Delaware Fiscal 2013 DRAFT Capital Investment Plan FY 13 thru FY 17 FUNDING SOURCE SUMMARY Source FY 13 FY 14 FY 15 FY 16 FY 17 Total Depreciation Reserve 250,000 250,000 250,000 750,000 Electric I & E Fund 3,274,000 4,383,822 2,971,977 2,660,220 4,007,510 17,297,529 Future Capacity Reserve Fund 550,000 550,000 GRAND TOTAL 3,824,000 4,633,822 3,221,977 2,910,220 4,007,510 18,597,529 Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1200 Project Name Distribution Upgrades Type Improvement Department Electric Engineering Useful Life 20-25 years Contact Electric Director Category Electric Priority 1 New Project: No Account Number: 487-8300-563.90-25 Time-Line: Description Total Project Cost: $4,554,000 This project involves the systemic replacement of overhead lines with underground lines whenever services are being moved, wire is damaged, trees cause a high number of outages, or development is in progress, and when it is beneficial to the Utility to convert to underground. This can involve a single line section or an entire residential neighborhood. Annual outage records are reviewed and selected areas are scheduled for upgrade to underground service. Additionally, this program funds the replacement of existing underground conductors and equipment that have reached their useful life and have started failing and require replacement. This account is used to upgrade any trouble areas during the year. The following developments are to be upgraded in FY2013: Capitol Park, Dover East, and Morris Estates II. Justification The number of storm and tree-related outages have been greatly reduced under this program and further improvements can be made to insure the most reliable electric service possible. Reliability has become one of most important factors to electric customers, second only to safety. The utility has responded by attempting to provide the most reliable system possible. Underground cable replacements are necessary as the useful, reliable, life of the original underground cable was 20-30 years. By proactively replacing this cable we will minimize outages and improve system reliability. In addition to cable replacement, overhead lines are replaced with underground to minimize outages caused by tree growth or animal contact. Lastly, overhead lines that have reached the end of their useful life are replaced with underground instead of rebuilding the overhead. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: Continued outages lead to increased complaints from our customers and will lead to customer dissatisfaction. There will be increased costs for repairs made under outage conditions as well as loss of electric revenue. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Construction/Maintenance 400,000 400,000 400,000 400,000 400,000 2,000,000 Total 400,000 400,000 400,000 400,000 400,000 2,000,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Depreciation Reserve 250,000 250,000 250,000 750,000 Electric I & E Fund 400,000 150,000 150,000 150,000 400,000 1,250,000 Total 400,000 400,000 400,000 400,000 400,000 2,000,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1202 Project Name Lighting Project and Rehabilitation Type Maintenance Department Electric Engineering Useful Life 10-12 years Contact Electric Director Category Electric Priority 4 New Project: No Account Number: 487-8300-563.50-76 Time-Line: Description Total Project Cost: $750,000 This fund was developed to replace and repair existing street lights or install new lights upon customer request. COMMENTS: This fund will remain active as long as there are improvements to be made. Private area lighting requests are a source of revenue for the City. Areas completed are White Oak Apartments, Westfield, Fairview, Cranberry Run, Millcreek, Independence Village and Governors Avenue (South 100 Block), Deerfield, Central Middle School, Fox Hall, Hidden Oaks, a portion of North Governors Ave, The Meadows, Turnberry, Baltray, and Bicentennial. Areas to be completed this budget year include Old Mill Acres, Overlook, Fox Hall West, and Woodcrest. $50,000 was added to FY2013 to include lights on the north bound side of Route 13. Justification The Electric Division receives numerous requests for lighting improvements. These requests are due to the lights aging, and as they age they put out less light and become unreliable. There are many developments that are in need of street light improvements. This fund would also provide funding for new private security light requests. ONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: Constant complaints of poor street lighting and multiple failures due to antiquated lights. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 450,000 Construction/Maintenance 100,000 50,000 50,000 50,000 50,000 300,000 Total Total 100,000 50,000 50,000 50,000 50,000 300,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 450,000 Electric I & E Fund 100,000 50,000 50,000 50,000 50,000 300,000 Total Total 100,000 50,000 50,000 50,000 50,000 300,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1205 Project Name Frazier Substation Reliability Upgrade Type Improvement Department Electric Engineering Useful Life 20-25 years Contact Electric Director Category Electric Priority 9 -- New Project: No Account Number: 487-8300-563.70-27 Time-Line: Description Total Project Cost: $765,200 The high side of the substation will be upgraded to include transmission line protection breakers as well as the transformer breaker. TIME-LINE/CURRENT STATUS: The design began in July 2011; materials will be ordered in July 2012 and construction to be completed by February 2013. COMMENTS: The completion date is dependent on material lead times, such as steel. Winter weather could also be a factor, if the above lead times cause a late fall start. Justification When the transmission line experiences a fault this substation loses power until the short circuit is found and the appropriate switching is accomplished. With the installation of the two new line breakers the faulted transmission line will be isolated from the substation and the customers will not experience an interruption of service. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: Accepting the outages in the northwest section of the system during transmission line faults. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 155,000 Construction/Maintenance 610,200 610,200 Total Total 610,200 610,200 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 155,000 Electric I & E Fund 610,200 610,200 Total Total 610,200 610,200 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1206 Project Name Distribution Feeder Replacement Program Type Improvement Department Electric Engineering Useful Life 20-25 years Contact Electric Director Category Electric Priority 8 -- New Project: No Account Number: 487-8300-563.90-25 Time-Line: Description Total Project Cost: $1,608,050 Substation feeders are defined as the three-phase lines that carry the load from the substations to the customers’ neighborhood. They interconnect to other substations to provide load redundancy should there be a failure of an adjacent substation. Many of the older substation feeders have smaller conductors that cannot carry the load that is required during system peaks and emergency situations. This project would systematically upgrade these conductors to increase the capacity of the feeders as well as ultimately reducing system losses. Lastly, many of the feeder components have reached the end of their useful life and require substantial maintenance. COMMENTS: The average cost to run one mile of underground equates to $135,400 per mile; the average cost to run one mile of overhead equates to $21,342. It is the departments’ goal to run two miles of underground and five miles of overhead per year. The project began by increasing the capacity from College Road Substation to General Scott Substation. Feeders to be upgraded in FY13 include sections of Route 9 and Persimmon Tree Road. Justification These lines are typically older, smaller, and are reaching the end of their life. This program will provide the needed systematic maintenance to the conductors, cross arms, switches, insulators, and related components as well as increasing system capacity hence resulting in more efficient operations by reducing line losses. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: Due to the age and condition of the current feeders, delaying this systematic maintenance/upgrade program will result in reduced system utilization as well as detrimentally impacting future reliability. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 377,510 Construction/Maintenance 277,500 277,510 120,510 277,510 277,510 1,230,540 Total Total 277,500 277,510 120,510 277,510 277,510 1,230,540 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 377,510 Electric I & E Fund 277,500 277,510 120,510 277,510 277,510 1,230,540 Total Total 277,500 277,510 120,510 277,510 277,510 1,230,540 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1207 Project Name Distribution Capacitors and Controls Type Improvement Department Electric Engineering Useful Life 15-20 years Contact Electric Director Category Electric Priority 10 -- New Project: No Account Number: 480-8300-563.60-82 Time-Line: Description Total Project Cost: $899,995 Install distribution capacitors throughout the system to correct poor power factor on distribution circuits. Install capacitor controllers capable of two-way communication to provide real-time monitoring and remote control operation. These controllers will be capable of switching the capacitors on and off to comply with system requirements. This project will also replace outdated substation equipment, capable of advanced metering such as power factor and harmonics to further analyze system performance remotely. Lastly, distribution line recorders will be purchased and installed to provide power factor recordings to fine tune this operation. COMMENTS: The required substation equipment installation will be completed in two phases. FY2013 will upgrade the required communication equipment installed 20 years ago. FY2014 will install equipment capable of extracting system data, for enhanced performance analyzing. The completion of these two phases will ultimately reduce engineering time and costs because of remote access to all substations. In addition to this advanced metering, event report extraction and analysis, relay settings review and installation, and advancements to our 24 hour system operation center will be also be realized. FY2015 -FY2017 will be the addition of capacitor banks and controllers into the distribution system. Justification Additional capacitance is required in order to meet system power factor requirements at the Delmarva Power and Light interchange point. This was substantiated through a load-flow study conducted by Shaw in early 2004 and distribution study by Wilson & Wilson in 2006. The current capacitor controls are not providing the granularity required to turn them off and on as required to meet both the power quality requirements of our customers and DP&L requirements. Additional controls are required to fine tune the systems operation. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: Without the additional capacitor banks and more importantly controls, the City may experience a low/high voltage problem at the customer level and/or the possibility of having to pay power factor penalties to Delmarva Power and Light. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 564,995 Construction/Maintenance 125,000 60,000 50,000 50,000 50,000 335,000 Total Total 125,000 60,000 50,000 50,000 50,000 335,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 564,995 Electric I & E Fund 125,000 60,000 50,000 50,000 50,000 335,000 Total Total 125,000 60,000 50,000 50,000 50,000 335,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1208 Project Name Transmission Line Maintenance Program Type Maintenance Department Electric Engineering Useful Life 20-25 years Contact Electric Director Category Electric Priority 7 -- New Project: No Account Number: 487-8300-563.70-35 Time-Line: Description Total Project Cost: $450,000 Replace aging porcelain insulators and related components on the transmission system with new polymer insulators and components. COMMENTS: 69kV transmission line segments Horsepond Road to Lafferty Lane and the NRG leased line (from North Street substation to DP&L’s Kent substation) are scheduled for FY13. Justification Insulators have a defined equipment life due to sun and weather conditions breaking down the porcelain and base bonding cement. Insulators installed in 1960's and 1970's are due for replacement because of this deterioration. We have experienced several transmission outages due to insulator failure. Replacing the insulators should extend the life an additional 30 years. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: Outages may occur if insulators are not replaced and fail due to deterioration. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 75,000 Construction/Maintenance 75,000 75,000 75,000 75,000 75,000 375,000 Total Total 75,000 75,000 75,000 75,000 75,000 375,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 75,000 Electric I & E Fund 75,000 75,000 75,000 75,000 75,000 375,000 Total Total 75,000 75,000 75,000 75,000 75,000 375,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1209 Project Name SCADA Master Hardware Replacement Type Improvement Department Electric Engineering Useful Life 5 years Contact Electric Director Category Electric Priority 6 -- New Project: Yes Account Number: 487-8300-563.80-38 Time-Line: Description Total Project Cost: $75,000 This project will replace the Master Station hardware. The Master Station receives all the analog data, alarms and control for all electrical substations and wastewater lift stations. The Master Station in comprised of Dual Host Servers, Dual Operator consoles, paging system, web server, 2-Firewalls for DMZ and One remote access/support firewall. TIME-LINE/CURRENT STATUS: Equipment will be ordered and replaced during the FY 17 budget year. Justification The equipment will reach the end of its expected life. It should be noted that this computer system operates 24/7. The additional firewalls are required to meet required NERC CIP Cyber Security Standards. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: If the system fails we will not be able to monitor or control electrical substations and we will not be able to view alarms for wastewater lift stations. This failure could result in electrical outages or wastewater overflows. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Construction/Maintenance 75,000 75,000 Total 75,000 75,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 75,000 75,000 Total 75,000 75,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1301 Project Name 69 kV Substation Switch Replacement Type Improvement Department Electric Engineering Useful Life 20-25 years Contact Electric Director Category Electric Priority n/a New Project: No Account Number: 487-8300-563.70-35 Time-Line: Description Total Project Cost: $135,000 This project will be replacing obsolete 69kV switches in the substation/transmission system. COMMENTS: The substations to be completed in FY13 are Danner and Lebanon and FY2014 is the Dover Air Force Base. Justification The new switches will be gang operated switches which provide more system stability when operated and more importantly increase operator safety. The switches to be replaced have reached the life expectancy and the utility has started to experience several switch failures each year over the past few years due to component fatigue. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: The majority of the switches in the older substations are showing signs of fatigue resulting in difficult operation (failure to open or close when required), frequent maintenance, and component obsolescence. Delaying this program will result in continued switch failure possibly resulting in wide-spread power outages. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Construction/Maintenance 55,000 80,000 135,000 Total 55,000 80,000 135,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 55,000 80,000 135,000 Total 55,000 80,000 135,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1302 Project Name Horsepond Substation Reliability Upgrade Type Improvement Department Electric Engineering Useful Life 20-25 years Contact Electric Director Category Electric Priority n/a New Project: No Account Number: 487-8300-563.70-27 Time-Line: Description Total Project Cost: $761,812 The high-side of the substation will be upgraded to include two transmission line protection breakers. The design and long lead time materials will be completed in FY 2013 and the majority of the materials will be purchased and construction completed in FY 2014. Justification When the transmission line experiences a fault this substation loses power until the short circuit is found and the appropriate switching is accomplished. With the installation of the line breakers the faulted transmission line will be isolated from the substation and the customers will not experience an interruption of service. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: Accepting the outages in the southeast section of the system during transmission line faults. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 70,000 60,000 130,000 Construction/Maintenance 100,000 531,812 631,812 Total 170,000 591,812 761,812 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 170,000 591,812 761,812 Total 170,000 591,812 761,812 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1304 Project Name Division Street Substation Fence Type Improvement Department Electric Engineering Useful Life 20-25 years Contact Electric Director Category Electric Priority n/a New Project: No Account Number: 487-8300-563.70-27 Time-Line: Description Total Project Cost: $70,000 Replace the existing fence at Division Street Substation. TIME-LINE/CURRENT STATUS: FY 2013 COMMENTS: The existing fence does not meet the National Electric Safety Code (NESC) and is in poor condition. Division Street substation is located in a populated area with heavy foot traffic. As this structure continues to deteriorate, the safety concern steadily increases. Entrance into the substation by an unauthorized person, can be deadly! Justification This project will replace the existing fence at Division Street Substation with a decorative fence, similar to the fence that was erected at St. Jones Substation. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: Existing structure does not meet the National Electric Safety Code (NESC). Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 70,000 70,000 Total 70,000 70,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 70,000 70,000 Total 70,000 70,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1400 Project Name General Scott Switchgear Type Improvement Department Electric Engineering Useful Life 20-25 years Contact Electric Director Category Electric Priority n/a New Project: No Account Number: Time-Line: Description Total Project Cost: $1,150,000 This project will replace the metal clad switchgear and replace the distribution breakers as they have reached the end of their useful life. Justification This station carries the industrial and residential load on the west side of Dover. The station distribution switch gear was installed in 1985. Additionally, the breakers have numerous moving parts, including plastic components that tend to fail with age resulting in mis-operation of the breaker. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: General Scott’s switchgear is aging and replacing it will reduce the possibility of outages due to aged equipment failure. Additionally, another feeder will be added to the substation to provide a 12 kV feed to a large commercial customer. Due to the rate tariffs, this 12kV feed will increase revenue should it become the primary feed, which is currently in discussion. TIME-LINE/CURRENT STATUS: Engineering will be completed in FY13. Construction of the new metal clad switchgear in FY14. Installation and commissioning completed in FY 2015. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 50,000 50,000 Construction/Maintenance 800,000 300,000 1,100,000 Total 50,000 800,000 300,000 1,150,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 50,000 800,000 300,000 1,150,000 Total 50,000 800,000 300,000 1,150,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1500 Project Name Horsepond to Cartanza 69 kV Rebuild Type Improvement Department Electric Engineering Useful Life 20-25 years Contact Electric Director Category Electric Priority n/a New Project: No Account Number: TBD Time-Line: Description Total Project Cost: $330,467 Replace the poles, conductor, and insulators from Horsepond Substation to Long Point Road. COMMENTS: Alternative pole materials will be explored to minimize future woodpecker damage to the new segment. Justification Currently, the conductor size from Horsepond substation to Long Point Road limits the capacity that can be carried on Feeder 4. Upgrading the existing 636 ACSR to 795 ACSR will increase the capacity and result in a standard conductor size from Cartanza Substation to Horsepond Substation. Additionally the poles have nearly reached the life expectancy due to numerous problems with woodpecker destruction. The annual pole testing program has noted deficiencies in the above ground condition of this line segment. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: Aging poles and hardware may fail causing outages in east Dover. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 75,000 75,000 Construction/Maintenance 255,467 255,467 Total 330,467 330,467 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 330,467 330,467 Total 330,467 330,467 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1502 Project Name 69 kV Cable Replacement North Street Type Improvement Department Electric Engineering Useful Life 30+ years Contact Electric Director Category Electric Priority n/a New Project: No Account Number: TBD Time-Line: Description Total Project Cost: $565,710 Replace the aging 69 KV underground cables from North Street switching yard to Kraft’s and Proctor & Gamble’s (customer owned) substations. COMMENTS: Proactively replacing cables that have reached their anticipated life. Justification Proctor & Gamble and Kraft are two (2) of the City of Dover’s 69 KV customers and it is our obligation to provide them with adequate and reliable service. The cables were installed in 1973 and have had two repairs. The first repair was in 1986 and the second repair was in 1992. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: Customer outages due to failing conductor. Additionally, the limited capacity of a single circuit could restrict the possible generation of NRG and the production of Proctor & Gamble and Kraft Foods. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 85,000 85,000 Construction/Maintenance 480,710 480,710 Total 85,000 480,710 565,710 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 85,000 480,710 565,710 Total 85,000 480,710 565,710 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1503 Project Name System Operations Monitoring Type Improvement Department Electric Engineering Useful Life 5 years Contact Electric Director Category Electric Priority n/a New Project: No Account Number: Time-Line: Description Total Project Cost: $30,000 Replace the system operations monitoring screens. Justification This project replaces the existing monitoring screens in system operations, with projection screens. City staff uses an array of these devices to view and operate the electric system and the lift stations. Additionally, the Public Utilities recently added 6 security cameras surrounding its facility and 2 security cameras at the interconnecting substation, which is our connection to the bulk electric system. These monitoring screens are also utilize in these security hardening measures. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Equip/Vehicle/Furnishings 30,000 30,000 Total 30,000 30,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 30,000 30,000 Total 30,000 30,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1504 Project Name College Road to McKee Substation Feeders Type Maintenance Department Electric Engineering Useful Life Contact Category Electric Priority n/a New Project: Yes Account Number: Time-Line: Description Total Project Cost: $307,000 PROJECT DESCRIPTION: This project will be constructed in conjunction with the water main upgrade planned for this section of Walker Road. The Electric Division will install conduit, cable and equipment, as the Water Division installs the new water main. CONSEQUENCES OF DELAYING OR ELIMINATING THIS PROJECT: The aging pole line will require the replacement of overhead wire. Leaving the overhead line in service increases the chances of weather related damages. Additionally, if this project isn’t constructed in conjunction with the water main upgrade, the cost of installation significantly increases. TIME-LINE/CURRENT STATUS: Design will be completed in FY 2014. Material procurement and construction will be completed FY 2015. COMMENTS: This project will be in conjunction with the water main project. Therefore, if the water main is delayed this project will also be delayed. Justification NEED, JUSTIFICATION, BENEFIT: The installation of the new power lines will provide McKee Run power with improved reliability, because of the decreased exposure of the feeder to weather events. THIS PROJECT IS RELATED TO THE FOLLOWING: Walker Road Water Main Upgrade (Water Division) Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Construction/Maintenance 307,000 307,000 Total 307,000 307,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 307,000 307,000 Total 307,000 307,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1600 Project Name McKee Run Yard Rebuild Type Improvement Department Electric Engineering Useful Life 25+ years Contact Electric Director Category Electric Priority n/a New Project: No Account Number: TBD Time-Line: Description Total Project Cost: $1,150,000 Refurbish McKee Run switching yard. TIME-LINE/CURRENT STATUS: The purchase of equipment with long lead times and engineering will be completed in FY 2016. Construction will be the following year, FY 2017. Justification The City of Dover’s electrical system has undergone a complete conversion to a 69KV transmission network. Hence, eliminating the old 22KV transmission network. Therefore, the 22KV system located at McKee Run Generating Plant should also be eliminated and a second 12470/69 KV step-up transformer should be installed, provided that Units 1 & 2 are still in operation. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 250,000 250,000 Construction/Maintenance 200,000 700,000 900,000 Total 450,000 700,000 1,150,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 450,000 700,000 1,150,000 Total 450,000 700,000 1,150,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EE1212 Project Name New Developments Type Improvement Department Electric T & D Useful Life 30+ years Contact Electric Director Category Electric Priority 1 New Project: No Account Number: 4878200-562.Several Time-Line: Description Total Project Cost: $4,484,800 This project purchases materials and equipment that are used to provide electric service to new housing developments, businesses, and industrial developments. Additionally, a portion of this expense is offset by the extension payments whereby new developers pay a $1,100 per residential lot connection fee, or business and industrial developers pay the total material expense for line extensions. This is an ongoing project and affects three separate accounts: 487-8200-562.60-31 - $ 70,536 487-8200-562.60-34 - $ 479,464 487-8200-562.60-46 - $ 500,000 COMMENTS: Not all new development projects are known, as some will arise during the year. Village of Maple Dale, Clearview Meadows, M&L Ventures Storage, Bayard Plaza, Nottingham Meadows, Brentwood Place, 215 Walker Rd, and Bayhealth are project known to be moving forward in FY13. Justification During the course of each budget year, new developers request line extensions for new electric projects. Some are new projects, while other projects may have received plan approval previously but were not completed for any number of reasons. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Construction/Maintenance 450,000 450,000 450,000 450,000 450,000 2,250,000 Total 450,000 450,000 450,000 450,000 450,000 2,250,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 450,000 450,000 450,000 450,000 450,000 2,250,000 Total 450,000 450,000 450,000 450,000 450,000 2,250,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1102 Project Name Units 1 & 2 Cooling Tower Repairs Type Maintenance Department Power Plant Useful Life Unknown Contact Electric Director Category Electric Priority 8 -- New Project: No Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $389,440 This project was developed to repair mechanical and structural components of the Units 1 and 2 cooling tower. The project scope has been developed through inspections performed in 2009 & 2010, and represents a systematic approach to maintaining the reliability and efficiency of the tower components. Specific activities scheduled for Fiscal 2013 include the replacement of the towers structural support members located at the base of the tower. Justification This project is needed to maintain the structural integrity of the cooling tower and the continued reliability of the cooling systems mechanical components. Also, the continued deterioration of the cooling towers performance will lead to load reductions on the unit during periods of high ambient temperatures. This will occur during the time period when generation costs are at their peak. Additonally, this will aid in meeting the discharge temperature limitation that is being required by the DRBC (Delaware Rivier Basin Commission) Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 199,140 Miscellaneous 37,300 37,300 153,000 Total Total 37,300 37,300 Total Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 199,140 Electric I & E Fund 37,300 37,300 153,000 Total Total 37,300 37,300 Total Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1202 Project Name McKee Run Unit 3 Boiler Systems Type Maintenance Department Power Plant Useful Life Unknown Contact Plant Manager Category Electric Priority 2 New Project: No Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $1,049,000 This fund was developed to perform inspections and repairs to the Unit 3 boiler on a predetermined frequency based on unit operating hours, required regulatory inspection intervals, and known equipment condition. In general, most work activities are those requiring planned outages and therefore will be scheduled to coincide with planned outages. Work identified includes the following: 2013 - Boiler safety valve refurbishment and adjustments, Forced draft fan and motor refurbishments, Induced draft fan motor refurbishment 2015 - Boiler safety valve refurbishment and adjustments, Forced draft and induced draft fan and motor refurbishments, feedwater heater repairs 2017 - Major boiler repairs to waterwall, superheater, and reheater tubes, air heater steam coil replacement Justification Critical system equipment represents components that, if they fail, will result in loss of generation and or capacity. Routine evaluation of the condition of critical components will allow for proper prioritization of maintenance activities and resources. Delaying this project could result in the failure of critical unit equipment and subsequent loss of generation and or capacity. More importantly, component failure could also result in safety risk to personnel. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 130,000 Construction/Maintenance 129,000 144,000 344,000 617,000 302,000 Total Total 129,000 144,000 344,000 617,000 Total Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 130,000 Electric I & E Fund 129,000 144,000 344,000 617,000 302,000 Total Total 129,000 144,000 344,000 617,000 Total Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1203 Project Name McKee Run Unit 3 Auxillary System Components Type Maintenance Department Power Plant Useful Life Unknown Contact Electric Director Category Electric Priority 4 New Project: No Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $772,500 This project will perform inspections and repairs of unit 3 auxillary system components that have been identified as critical through the plant life assessment study. Critical auxillary sysem components are those that could result in unit load reduction or outage with consequential loss of capacity and/or generation although they would not individually affect the long range financial viability of the unit. Components identified will be addressed in 2013 inlcude the 3B condensate pump and motor. Components scheduled for 2014 include boiler feed pumps and motors, condenser circulator pumps and motors Components scheduled for 2015 include condensate pump and motor. Components scheduled for 2016 include service water pump. Components scheduled for 2017 include circulating water booster pump and motor. Justification Critical system components that, if they fail, will result in the loss of generation and/or capacity. Addressing these assets in a systematic fashion will result in minimize forced outages and eliminate major maintenance expenses associated with component failure. Performing work as scheduled will also levelize maintenance expenditures. Delaying this project could result in the failure of critical unit equipment and subsequent loss of generation and/or capacity. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 113,000 Construction/Maintenance 55,000 188,500 45,000 6,000 34,000 328,500 331,000 Total Total 55,000 188,500 45,000 6,000 34,000 328,500 Total Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 113,000 Electric I & E Fund 55,000 188,500 45,000 6,000 34,000 328,500 331,000 Total Total 55,000 188,500 45,000 6,000 34,000 328,500 Total Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1207 Project Name Van Sant Unit 11 Component Replacements Type Maintenance Department Power Plant Useful Life Unknown Contact Plant Manager Category Electric Priority 4 New Project: No Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $821,000 This fund was developed to perform inspections and repairs to the VanSant Unit 11 auxiliary equipment on a predetermined frequency based on unit operating hours, required regulatory inspection intervals, and known equipment condition. Work to be performed to include the following equipment: 2014 - Refurbish Exhaust frame blower B and motor, B Cooling Water pump and motor, B injection water pump motor 2015 - Replace inlet guide vanes 2016 - Generator inspection and repair 2017 - Injection water pump and motor refurbishment, A Exhaust frame blower and motor refurbishment Justification This project is required to fund the replace of capital items that are expected to reach their useful life and will need to be replaced or refurbished to maintain plant system and unit reliability. Extended equipment and /or unit outage time will result from lack of funding this project. This will have a direct effect on the cost of energy during the extended outage time as well as increase future energy capacity charges. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 50,000 Construction/Maintenance 75,000 75,000 143,000 78,000 371,000 400,000 Total Total 75,000 75,000 143,000 78,000 371,000 Total Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 50,000 Electric I & E Fund 75,000 75,000 143,000 78,000 371,000 400,000 Total Total 75,000 75,000 143,000 78,000 371,000 Total Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1209 Project Name McKee Run & VanSant Preservation of Structures Type Maintenance Department Power Plant Useful Life Unknown Contact Plant Manager Category Electric Priority n/a New Project: No Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $527,000 This project involves the preservation of plant structures in order to prevent deterioration of building structural steel and equipment subject to corrosion due to the working environment. Included will be the sandblasting and painting of identified structures and equipment along with the removal of equipment that has been retired in place. This work is an ongoing effort spanning multiple years. Work identified includes the following: 2014 - Paint the radiator support structure and diesel cooling water tank at VanSant, Repair and paint the exterior of the circulating water piping at the base of the Unit 3 condenser, Paint all structural steel bolted connections at grade on Unit 3 boiler. 2016 - Paint Unit 3 stack, replace portions of the stack grounding system 2017 - Paint city water and outside demineralized water storage tank Justification Structural steel painting is needed in various areas throughout the plant proper as well as various outbuildings on the plant property to maintain the physical building structures and equipment in an acceptable condition and prevent further deterioration. This project represents a minimum preservation and maintenance of structures consistent with the expected life of the station. Consequences of delaying or eliminating this project will result in the acceleration of deterioration of plant structures and larger future costs associated with structural repairs. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 38,000 Construction/Maintenance 42,000 165,000 142,000 349,000 140,000 Total Total 42,000 165,000 142,000 349,000 Total Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 38,000 Electric I & E Fund 42,000 165,000 142,000 349,000 140,000 Total Total 42,000 165,000 142,000 349,000 Total Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1212 Project Name McKee Run Unit 3 Turbine Repairs Type Maintenance Department Power Plant Useful Life Unknown Contact Plant Manager Category Electric Priority 1 New Project: Account Number: Time-Line: Description Total Project Cost: $1,760,000 This project will inspect the Unit 3 turbine and auxiliary equipment to determine repairs needed to keep the unit reliable and to assess remaining life of the unit. This project will be completed in two phases, an initial limited inspection followed by an extensive detailed inspection and repair planned outage. The first phase that will be completed in 2012 under Project EG1212 and will utilize borescope equipment to determine condition of components that can be observed through limited access locations along the turbine casing and through turbine inlet valves. This inspection will provide a general condition assessment of a portion of the highly stress components of the turbine and may provide insight into the extent of replacement parts needed to successfully execute phase 2. Phase 2 to be completed later in 2014 will include a full disassembly and inspection of the turbine and auxiliary equipment. Expenditures in 2013 are for long lead material procurement. Phase 2 costs have been revised to reflect the need to replace 9th stage blading on the turbine. Justification An assessment of the unit needs to be performed to determine condition of the highly stressed turbine components to assure continued reliability. Documented condition of rotor blading during last inspection noted deterioration of 9th stage blades and temporary repairs performed. A significant probability that the blades should be replaced. Consequences of delaying or eliminating this project include possible catastrophic equipment failure and indefinite loss of unit availability. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 348,000 Construction/Maintenance 115,000 1,031,000 10,000 1,156,000 256,000 Total Total 115,000 1,031,000 10,000 1,156,000 Total Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 348,000 Electric I & E Fund 115,000 1,031,000 10,000 1,156,000 256,000 Total Total 115,000 1,031,000 10,000 1,156,000 Total Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1304 Project Name McKee Run Units 1 & 2 Component Repairs Type Maintenance Department Power Plant Useful Life Unknown Contact Electric Director Category Electric Priority 4 New Project: No Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $3,116,500 This project will inspect and repair capital equipment associated with the Units 1 and 2 turbine generator and Boiler equipment. Components identified that will be addressed include the following: 2013- Refurbishment of 2A condensate pump and motor and replacement of heater exchanger level controllers. 2014 - Inspection of turbine nozzles 2015 - Unit 2 boiler feed pump and motor refurbishments 2016 - Major boiler component inspections and repairs. 2017 - Replacement of boiler feed recirculation valves, circulating water pump refurbishment, replacement of steam air heater coils Justification This project is required to fund the repair and /or replace of capital items that are expected to reach their useful life and will need to be repaired or replaced to maintain plant system and unit reliability. Extended equipment and /or unit outage time will result from lack of funding this project. This will have a direct effect on the cost of energy during the extended outage time as well as increase future energy capacity charges. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 364,000 Construction/Maintenance 52,000 100,000 44,000 172,000 234,000 602,000 2,150,500 Total Total 52,000 100,000 44,000 172,000 234,000 602,000 Total Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future 364,000 Electric I & E Fund 52,000 100,000 44,000 172,000 234,000 602,000 2,150,500 Total Total 52,000 100,000 44,000 172,000 234,000 602,000 Total Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1306 Project Name McKee Run Turbine Level Window Modification Type Improvement Department Power Plant Useful Life Unknown Contact Plant Manager Category Electric Priority 6 -- New Project: Yes Account Number: Time-Line: Description Total Project Cost: $85,000 PROJECT DESCRIPTION: Install equipment for safety of plant personnel and to maintain reliability of plant equipment in the event of an explosion at the McKee Run switchyard. Equipment includes the following: System Design (2013) - $5k Purchase of window blocking materials (2013) - $20k Purchase of Fire Shutters for windows (2013) - $20k Installation (2013) - $40k Justification This project is a result of an insurance inspection and recommendation to install equipment or window blocking materials for the protection of plant personnel and plant equipment in the event of an explosion of electrical distribution equipment in the McKee Run switchyard. Consequences of delaying or eliminating this project will be the continued risk of personal injury or damage to electrical distribution equipment. In addition, no benefit to, or even an increase of, insurance company premium costs could result due to not acting on insurance company recommendations. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 5,000 5,000 Construction/Maintenance 80,000 80,000 Total 85,000 85,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 85,000 85,000 Total 85,000 85,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1307 Project Name McKee Run Unit 3 Air Heater Expansion Joint Type Maintenance Department Power Plant Useful Life Unknown Contact Electric Director Category Electric Priority 7 -- New Project: Yes Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $215,000 This project will replace the Unit 3 boiler air heater, hot air outlet expansion joint closest to the air heater which has reached the end of its’ useful life. This replacement is the last expansion joint to be replaced in the hot gas duct from the boiler to the air heater. The work is scheduled to be completed in the fall of 2013. This work was previously scheduled for 2017 but was accelerated due to its’ deteriorated condition. Justification This expansion joint has failed in multiple locations, allowing hot air to escape from the ductwork exiting the boiler. This has a direct impact on the performance of the Unit, limiting capacity and reducing efficiency. Replacement of this expansion joint is necessary in order to recover unit efficiency. This project will be completed in 2013. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 135,000 Construction/Maintenance 80,000 80,000 Total Total 80,000 80,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 135,000 Electric I & E Fund 80,000 80,000 Total Total 80,000 80,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1309 Project Name McKee Run Unit 3 Stack Repairs Type Maintenance Department Power Plant Useful Life Unknown Contact Electric Director Category Electric Priority 9 -- New Project: No Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $102,000 An inspection and assessment will be made to determine the condition of the stack and also provide cost of any repairs required to extend the life of the stack for 15 to 20 yrs. Repairs to the stack lining and exterior will be made in order to allow continued operation of Unit 3. A determination for the necessity of repairs to Unit 3 stack will be performed on an annual basis. An internal and external inspection will be performed by outside consultant in 2012. Justification Current plans are to contract for an external and internal inspection in 2013 to develop an action plan to extend the life of the stack as well as develop costs for the repairs of the stack by outside contractors. We will contract for needed repairs as determined by the 2013 and subsequent yearly inspections. Delaying necessary repairs could lead to more costly repairs in the future, unplanned forced outage on Unit 3, fall out of internal material upon the surrounding community and potential injury to employees. Earnings from the sale of capacity may also be affected. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 25,000 Miscellaneous 27,000 50,000 77,000 Total Total 27,000 50,000 77,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 25,000 Electric I & E Fund 27,000 50,000 77,000 Total Total 27,000 50,000 77,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1310 Project Name McKee Run Units 1 & 2 Stack Repairs Type Maintenance Department Power Plant Useful Life 10-15 years Contact Electric Director Category Electric Priority 10 -- New Project: No Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $75,000 Repairs to the stack lining and exterior will be made in order allow continued operation of these units. In addition, an assessment will be made to determine the remaining life of the stack and also provide cost of any repairs required to extend the life of the stack for another 10 to 15 yrs. The current expectation is to perform limited repairs in fiscal year 2013. An evaluation of future repairs will also be made. Justification This stack has been in service past its expected life and repairs are needed to ensure continued operation for the remaining life of the Units. Should this stack need to be taken out of service, it will necessitate taking both Units 1 and 2 offline. Delaying necessary repairs could lead to more costly repairs in the future, simultaneous unplanned forced outages on both Units 1 & 2, fall out of internal material upon the surrounding community and potential injury to employees. Earnings from the sale of capacity will also be affected. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Miscellaneous 75,000 75,000 Total 75,000 75,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 75,000 75,000 Total 75,000 75,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1311 Project Name Van Sant Capacity Increase Type Maintenance Department Power Plant Useful Life Unknown Contact Plant Manager Category Electric Priority n/a New Project: Yes Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $550,000 This project will increase the electric generation output of the VanSant Unit 11 gas turbine generator by installing technology specifically designed to decrease the air inlet temperatures to the gas turbine during high ambient air temperature days. This project is dependent on obtaining favorable payback as determined by an evaluation of available technologies conducted as part of a strategically budgeted initiative that will determine the most cost effective technology to utilize. This initiative is contained in the 2012 Strategic level of the Power Plant O&M budget. The project is estimated to be completed in 2013. Multiple technologies to achieve the increased generator output will be evaluated in 2012. Justification This project will provide a positive cash flow within 5 years of installation as the City of Dover will benefit through additional capacity and generation sales. Each year this project is delayed will result in lost revenue opportunity to the City of Dover. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 75,000 75,000 Construction/Maintenance 475,000 475,000 Total 550,000 550,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future Capacity Reserve Fund 550,000 550,000 Total 550,000 550,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1312 Project Name McKee Run Unit 3 Generator Repairs Type Maintenance Department Power Plant Useful Life Unknown Contact Plant Manager Category Electric Priority 1 New Project: No Account Number: Time-Line: Description Total Project Cost: $236,000 This project will inspect the Unit 3 turbine generator, and auxiliary equipment to determine repairs needed to keep the generator operational and to assess remaining life of the unit. This project will include a full disassembly and inspection of the generator and auxiliary equipment. Extensive electrical testing of the generator will be performed. Justification An assessment of the generator needs to be performed to determine mechanical and electrical condition of the internal turbine components to assure continued reliability. This unit has not been inspected since 2000 and Industry maintenance practices recommend inspection intervals not exceeding 10 years. Consequences of delaying or eliminating this project include a possible equipment failure and extended or indefinite loss of unit availability. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Construction/Maintenance 236,000 236,000 Total 236,000 236,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 236,000 236,000 Total 236,000 236,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1401 Project Name Units 1 & 2 Boiler Repairs Type Maintenance Department Power Plant Useful Life Unknown Contact Plant Manager Category Electric Priority 2 New Project: Yes Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $407,000 This fund was developed to perform inspections and repairs to the Units 1 and 2 boilers on a predetermined frequency based on unit operating hours, required regulatory inspection intervals, and known equipment condition. In general, most work activities are those requiring planned outages and therefore will be scheduled to coincide with planned outages. Work scheduled includes the following: 2014 - Boiler safety valve refurbishment and inspections. 2015 - Boiler air heater inspection and repair 2016 - Boiler safety valve refurbishment and inspections Justification This project is required to fund the repair/replacement of capital items that are expected to reach their useful life. Critical system equipment represents components that, if they fail, will result in loss of generation and or capacity. Routine evaluation of the condition of critical components will allow for proper prioritization of maintenance activities and resources. Delaying this project could result in the failure of critical unit equipment and subsequent loss of generation and or capacity. More importantly, component failure could also result in safety risk to personnel. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future Construction/Maintenance 18,000 20,000 29,000 67,000 340,000 Total 18,000 20,000 29,000 67,000 Total Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future Electric I & E Fund 18,000 20,000 29,000 67,000 340,000 Total 18,000 20,000 29,000 67,000 Total Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1402 Project Name Unit 3 Cooling Tower Repairs Type Maintenance Department Power Plant Useful Life Unknown Contact Electric Director Category Electric Priority 1 New Project: No Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $1,159,338 This project was developed to repair mechanical and structural components of the Unit 3. The project scope has been developed through inspections performed in 2009 and 2010 and represents a systematic approach to maintaining the reliability and efficiency of the tower components. Specific activities scheduled for 2015 include installing new tower fill which will recover or improve the heat transfer efficiency of the tower and assure that the discharge temperature of the cooling tower continues to meet regulatory requirements. Work scheduled for 2016 includes cooling fax gear box refurbishments. Work scheduled for 2017 includes replacing cooling fan motors and replacing tower wall casing. Justification This project is needed to maintain the structural integrity of the cooling tower and the continued reliability of cooling system mechanical components. Also continued deterioration of the cooling tower performance will lead to load reductions on the unit during periods of high ambient temperatures. This will occur during the time period when generation costs are at their peak. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 398,338 Construction/Maintenance 571,000 52,000 138,000 761,000 Total Total 571,000 52,000 138,000 761,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 398,338 Electric I & E Fund 571,000 52,000 138,000 761,000 Total Total 571,000 52,000 138,000 761,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1403 Project Name Unit 3 Cooling Water Line Repairs Type Maintenance Department Power Plant Useful Life Unknown Contact Plant Manager Category Electric Priority n/a New Project: No Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $265,000 This project will inspect and repair the underground cooling water line from the Unit 3 condenser to the cooling tower. An inspection of the pipe condition will be performed on this pipe in the fall of 2013 to develop a repair/replace action plan to address the suitability for continued operation as well as extending the life of the piping beyond 2013. The actual repairs will be completed in the spring of 2014.. Completion of the project as scheduled will eliminate the need to add additional O&M funding for emergency repairs in future years. The budgeted costs assume only repairs of the lines (2) from the cooling tower to the plant exterior wall. Justification The condition of the underground cooling water line has required numerous repairs over the life of the plant and is expected to reach its useful life in the 2015-2020 time period. It is expected that the repair frequency will accelerate over the next several years as the internal pipe coating continues to degrade. Delaying this project beyond 2014 will increase the risk of a failure causing an extended unit outage to repair or replace the failed pipe as well incur water spillage to the surrounding ground. Additional budget dollars will need to be allocated to make the repairs of the failed piping. Prior Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total 25,000 Miscellaneous 240,000 240,000 Total Total 240,000 240,000 Prior Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total 25,000 Electric I & E Fund 240,000 240,000 Total Total 240,000 240,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1406 Project Name McKee Run High Energy Piping Repairs Type Maintenance Department Power Plant Useful Life Unknown Contact Plant Manager Category Electric Priority 1 New Project: No Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $80,000 This project will address deficiencies in highly stressed piping systems at the McKee Run Generating Station found during inspections conducted on those piping systems. The inspections are scheduled for early 2013. Included will be the main steam, hot and cold reheat lines as well as feed water and condensate piping of all units. This work is intended to repair or replace piping and pipe supports that are found to be defective before any long term stress or flow induced pipe failures occur. Justification High energy piping systems are subject to service related structural failure due to the high temperature service under which they operate. Additionally, lower temperature piping systems are subject to accelerated corrosion rates due to flow characteristics. Identifying and correcting any such piping degradation before failures occur will prevent extended forced outages to make emergency repairs/replacement. Delaying this project could result in the failure of critical piping systems and subsequent loss of generation and or capacity. Most importantly, component failure could also result in serious safety risk to personnel. This project is one that is required to meet insurance company recommendations. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 80,000 80,000 Total 80,000 80,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 80,000 80,000 Total 80,000 80,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1407 Project Name Metering System Upgrades Type Maintenance Department Power Plant Useful Life Unknown Contact Electric Director Category Electric Priority 6 -- New Project: Yes Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $150,000 This project involves the replacement of all the meters (15) in the COD system that are currently tied to the metering computer at McKee Run Generating Station. In addition, costs associated with the replacement of the Metering computer (PC) at McKee Run and an alternate demark for the telephone line that the NRG meter uses to communicate data to the McKee Run computer is included in this project. A metering computer would also be installed at the City of Dover dispatch center for use. At the present time, there are annual maintenance costs associated with keeping the reliability of the meters and the metering software current. In addition, a software maintenance fee is included in the annual budget. Activities scheduled for 2014 include planning and design. Installation and purchase to be completed in 2015. Justification The meters are 14 years old and the metering computer is 4 years old and nearing the end of their recommended service life. The metering system provides the City of Dover, T.E.A, NAES, PJM, NRG and Delmarva Power with accurate data for revenue metering, cost metering, load scheduling and forecasting and for generator capacity rating verification purposes. Submission of this data/information is also an important part of compliance with various NERC standards. Non-compliance with NERC Standards could result in fines and other penalties. Delaying or eliminating this project could have a substantial effect on the City of Dover electric bill. Failures to the meters or computers would force the City of Dover to rely on DPL metering, NRG metering and/or other methods of determining load usage costs and generation revenues. In addition, costs associated with the manual documentation and submission of the information would be labor intensive and could become extremely costly. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Planning/Design 25,000 25,000 Construction/Maintenance 125,000 125,000 Total 25,000 125,000 150,000 Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Electric I & E Fund 25,000 125,000 150,000 Total 25,000 125,000 150,000 Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1601 Project Name McKee Run Building Equipment Replacement Type Maintenance Department Power Plant Useful Life Unknown Contact Plant Manager Category Electric Priority n/a New Project: Yes Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $330,000 This project includes the replacement of certain building support systems that are expected to reach their useful life. The specific building systems to be addressed include: Supervisors Office Roof top Air Conditioners – 2016-$30,000 #3 elevator refurbishment- 2016- $60,000 Turbine roof exhaust fans- 2016 - $20,000 Control Room rooftop air Conditioning Unit – 2017 - $50,000 Justification This project is required to fund the replacement of roof top air conditioners and exhaust fans starting in 2016. In addition, the #3 elevator is expected to require significant rebuilding to maintain its reliability. Major maintenance was performed last in 1999. Continuing increase in the costs to maintain this equipment will result from the lack of funding this project. In addition, critical temperature control is necessary to keep plant instrumentation located in the control room at acceptable operating conditions. Allowing the temperature to exceed design conditions could contribute to reduced control equipment life and possible reduced unit reliability. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future Construction/Maintenance 110,000 50,000 160,000 170,000 Total 110,000 50,000 160,000 Total Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future Electric I & E Fund 110,000 50,000 160,000 170,000 Total 110,000 50,000 160,000 Total Budget Impact/Other Monday, May 14, 2012

Fiscal 2013 DRAFT Capital Investment Pla FY 13 thru FY 17 City of Dover, Delaware Project # EG1701 Project Name Van Sant Unit 11 Major Overhaul/Inspection Type Improvement Department Power Plant Useful Life 20 years Contact Electric Director Category Electric Priority 3 New Project: No Account Number: 487-8101-591.40-31 Time-Line: Description Total Project Cost: $1,941,000 This project will perform a major overhaul on the turbine generator based on Original Equipment Manufacturer (OEM) recommended repair frequency which is based on factored starts of the unit from first commissioning and from last inspection/repair interval. This project will be implemented in 2017 with long lead material purchases and installation in 2018. Justification This project is required to fund the purchase of all parts needed to perform a major overhaul on the unit based on estimated factored starts since unit was first commissioned and since last the Hot Gas Path inspection. This project will span the course of three years. In Year 1, the majority of the long lead parts will be purchased. Services will be identified in year 2 and the actual installation will be performed in Year 2. Extended equipment and /or unit outage time will result from lack of funding this project. This will have a direct effect on the cost of energy during the extended outage time as well as increase future energy capacity charges. In addition, gradual degradation of the unit’s output could occur which would have a negative effect on the capacity rating of the unit and could result in catastrophic failure of the unit. Expenditures FY 13 FY 14 FY 15 FY 16 FY 17 Total Future Construction/Maintenance 900,000 900,000 1,041,000 Total 900,000 900,000 Total Funding Sources FY 13 FY 14 FY 15 FY 16 FY 17 Total Future Electric I & E Fund 900,000 900,000 1,041,000 Total 900,000 900,000 Total Budget Impact/Other Monday, May 14, 2012

1 of 5 City of Dover Capital Investment Plan Project Tracking Report April 30, 2012 Points to Remember - * Original Project Budget = Original Total Project Budget initially included in approved annual budget. * Latest Project Budget = Revised Total Project Budget included in most recent approved annual budget or one of the following: bond resolution, revolving fund loan agreement, Council approved budget amendment, or City Manager approved amendment as per the Budget Amendment Procedure. * Current Fiscal Year - Revised Fiscal Year Budget = Current Year approved project budgets plus carry forward balances of unspent budgets in the prior fiscal year. Project Carry Forward balances will be submitted to City Council for amendment in January 2010. Can also be amended with City Manager approval per the Budget Amendment Procedure. * Water Quality, Inflow/Infiltration, Distribution Upgrades and New Development projects are budgeted as a blanket project and once individual projects are identified and estimated they are created using an allocation of the overall budgeted amount. * Status and Comments provided by City Manager. * For Finance purposes projects are considered completed when placed in service and all charges have been processed. Community Water & Total Current Year Budget Funding Sources General Transportation Wastewater Electric CIP Budget Balance $ 77,000 $ 118,588 $ 430,591 $ 360,333 $ 986,512 Library Funding - FY11 Budget Balance 100,962 - - 87,045 188,007 Federal and/or State Grants 7,422,183 1,400,000 - - 8,822,183 Library Green Energy/Bridge Loan 2,700,000 - - - 2,700,000 Friends of the Library Donation 210,000 - - - 210,000 Kent County Library Contribution 1,000,000 - - - 1,000,000 Library Reserve 2,590,784 - - - 2,590,784 Construction Loan 274,961 - - - 274,961 Community Transportation Fund - FY11 Balances - 678,612 - - 678,612 Revolving Fund Loans - - 4,309,821 - 4,309,821 Transfer from Capital Reserves - - - 370,730 370,730 Impact Fees - - 867,032 - 867,032 Loan Proceeds - Streets & City Hall 1,970,000 - - - 1,970,000 Transfer Loan Proceeds to CT Fund - Streets - 875,000 - - 875,000 Transfer from Operating Funds 623,847 - 1,750,000 3,500,000 5,873,847 Interest Earned 10,900 2,800 - 38,400 52,100 Total Funding Sources (Unaudited) $ 16,980,637 $ 3,075,000 $ 7,357,444 $ 4,356,508 $ 31,769,589

City of Dover General Fund - Major CIP Projects 2 of 5 April, 2012 Hide TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Latest Project Project Current Revised Fiscal Project Project Project To Date Budget % Budget Fiscal Yr. Fiscal Yr. YTD % Budget Code Type Description Budget Budget Expenses Balance Spent Budget Budget Expenses Spent Status Comments 1 FY2009 Bid Pack A - Done. 2 LB0901 M/G New Library Project $ 18,200,000 $ 20,469,080 $ 11,911,051 $ 8,558,029 58.2% $ 11,195,009 $ 14,298,890 $ 7,740,861 54.1% Started Bid Pack B - 40% Complete/Construction 3 Totals - FY09 $ 18,200,000 $ 20,469,080 $ 11,911,051 $ 8,558,029 58.2% $ 11,195,009 $ 14,298,890 $ 7,740,861 54.1% 4 5 FY2012 6 --- Ann FD Truck Payment $ 244,820 $ 257,720 $ 258,456 $ (736) 100.3% $ 244,820 $ 257,720 $ 258,456 100.3% Sweeper received February 2012; 7 --- Vehicles & Equipment 377,927 364,027 353,551 10,476 97.1% 377,927 364,027 353,551 97.1% 99% Sanitation Bulk Truck due in April 2012 Roof Replacement @ 8 PR1201 Dover Park 30,000 30,000 - 30,000 0.0% 30,000 30,000 - 0.0% Concrete work complete on Independence Boulevard and Hazel Road. Site work initiated on North Street Roudabout. Wesley State Street entrance 9 CT Fund B/L Streets & Alleys Program 1,000,000 1,750,000 - 1,750,000 0.0% 1,000,000 1,750,000 - 0.0% 35% complete. 10 ST1202 Concrete Program 30,000 30,000 - 30,000 0.0% 30,000 30,000 - 0.0% 0% Bids distributed and returned in March Streets Dump Truck 11 ST1203 Refurbishment 30,000 30,000 10,751 19,249 35.8% 30,000 30,000 10,751 35.8% 33% One Dump Truck refurbished out of three. 12 City Hall Sprinkler System - 220,000 - 220,000 0.0% - 220,000 - 0.0% 13 Totals - FY12 $ 1,712,747 $ 2,681,747 $ 622,758 $ 2,058,989 23.2% $ 1,712,747 $ 2,681,747 $ 622,758 23.2% 14 15 Grand Totals $ 19,912,747 $ 23,150,827 $ 12,533,808 $ 10,617,019 54.1% $ 12,907,756 $ 16,980,637 $ 8,363,618 49.3% Legend M = Multi-year project - a project with a specific schedule to occur over multiple years. R = Recurring project - a project that begins and ends each fiscal year and is re-budgeted to start over each fiscal year. G = Grant funded project B/L = To be financed through bonds or commercial loan; Projects will be completed through CT Fund, therefore the loan proceeds will be transferred from Capital Fund into the Community Transportation Fund

City of Dover Community Transportation & General Fund Street Funds - Major CIP Projects 3 of 5 April, 2012 Hide TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Latest Project Project Current Revised Fiscal Project Project Project To Date Budget % Budget Fiscal Yr. Fiscal Yr. YTD % Budget Code Type Description Budget Budget Expenses Balance Spent Budget Budget Expenses Spent Status Comments 1 FY 2007 2 CT0708 M E. Water Street Brick $ 65,000 $ 65,000 $ - $ 65,000 0.0% $ - $ 65,000 $ - 0.0% Specialty contract needed. 3 Totals $ 65,000 $ 65,000 $ - $ 65,000 0.0% $ - $ 65,000 $ - 0.0% 4 5 FY 2009 6 CT0977 M Schutte Parking Lot $ 21,950 $ 21,950 $ - $ 21,950 0.0% $ - $ 21,950 $ - 0.0% Deferred 7 CT1165 M Rte. 13,N. State -Kings Hwy 591,662 591,662 - 591,662 0.0% - 591,662 - 0.0% CT1162 M Library Access Road - 68,000 68,000 - 0.0% - 68,000 68,000 100.0% State paid for whole paving proj 8 Totals $ 613,612 $ 681,612 $ 68,000 $ 613,612 10.0% $ - $ 681,612 $ 68,000 10.0% 9 10 FY2012 Concrete work on Independence 11 CT M Street Projects - State Funds $ 950,000 $ 800,000 $ 9,135 $ 790,865 1.1% $ 950,000 $ 53,388 $ 9,135 17.1% 35% Boulevard complete. Concrete work on Hazel 12 Various B/L Street Projects - General Fund 350,000 1,750,000 88,990 1,661,010 5.1% 350,000 875,000 88,990 35% complete. 13 CT1201 M North Street Roundabout - 500,000 - 500,000 0.0% - 500,000 - 0.0% 35% Site work initiated. 14 TE1201 M Lincoln Park Center 900,000 900,000 6,211 893,789 0.0% 900,000 900,000 6,211 0.7% Started 15 Totals $ 2,200,000 $ 3,950,000 $ 104,336 $ 3,845,664 2.6% $ 2,200,000 $ 2,328,388 $ 104,336 4.7% 16 17 Grand Totals $ 2,878,612 $ 4,696,612 $ 172,336 $ 4,524,276 3.7% $ 2,200,000 $ 3,075,000 $ 172,336 7.8% Legend M = Multi-year project - a project with a specific schedule to occur over multiple years. R = Recurring project - a project that begins and ends each fiscal year and is re-budgeted to start over each fiscal year. C = Project funded by combination of CT Funds and General Fund B/L = To be financed through bonds or commercial loan; Projects will be completed through CT Fund, therefore the loan proceeds will be transferred from Capital Fund into the Community Transportation Fund;

City of Dover Water/Wastewater Improvement & Extension Fund - Major CIP Projects 4 of 5 April, 2012 TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Latest Project Project % Approved Revised Fiscal % Status / Project Project Project To Date Budget Budget Fiscal Yr. Fiscal Yr. YTD Budget % Code Type Description Budget Budget Expenses Balance Spent Budget Budget Expenses Spent Complete Comments 1 FY 2008 Option to purchase land agreement 2 WD0804 M 1.0 MG Elevated Water Storage $ 4,196,600 $ 2,590,000 $ 31,861 $ 2,558,139 1.2% $ - $ 178,916 $ 10,777 6.0% Started under review 3 WD0805 M Piney Point Well 398,800 665,000 71,643 593,357 10.8% - 62,319 3,961 6.4% Started DNREC permitting ongoing US 13 East Sanitary Sewer 4 WW0810 M/SL Interceptor 2,376,800 3,022,562 3,232,228 (209,666) 106.9% - 295,722 286,629 96.9% 100.0% Complete 5 Totals - FY08 $ 6,972,200 $ 6,277,562 $ 3,335,732 $ 2,941,830 53.1% $ - $ 536,957 $ 301,367 56.1% 6 7 FY2009 8 WQ0905 M/SL Bayard Avenue $ 590,910 $ 490,910 $ 537,400 $ (46,490) 109.5% $ - $ 259,121 $ 250,610 96.7% 98.0% Final connection scheduled for May. Constr complete; retainage/change 9 WQ0907 M/SL Route 13 Water Main 1,058,700 2,282,682 1,960,959 321,723 85.9% - 1,899,872 1,548,149 81.5% 99.0% orders pending. 10 Totals - FY09 $ 1,649,610 $ 2,773,592 $ 2,498,359 $ 275,233 90.1% $ - $ 2,158,993 $ 1,798,759 83.3% 11 12 FY2010 13 WW1001 M/SL Inflow/Infiltration Removal $ 1,800,000 $ 2,122,536 $ 1,761,684 $ 360,852 83.0% $ 1,800,000 $ 766,201 $ 404,128 52.7% 100.0% Complete Pump station delivered; installation 14 WW1007 M/SL Fox Hall Pump Station 427,900 392,044 67,389 324,655 17.2% - 360,687 17,176 4.8% 70.0% underway. Construction complete; closeout 15 WW1008 M/SL Heatherfield F/M Rerouting 220,400 324,916 210,351 114,565 64.7% - 237,506 161,656 68.1% 99.0% documents pending. 16 WW1010 I Tar Ditch Interceptor Upgrade 518,230 518,230 28,014 490,216 5.4% - 495,359 5,143 1.0% Started Easement request sent to residents 17 Totals - FY10 $ 2,966,530 $ 3,357,726 $ 2,067,438 $ 1,290,288 61.6% $ 1,800,000 $ 1,859,753 $ 588,103 31.6% 18 19 FY2011 20 WQ1103 WQI - Ross Street - 71,840 - 71,840 0.0% 71,840 - - 0.0% --- Canceled Design and construction work 21 WW1101 M/SL Inflow/Infiltration Removal 500,000 500,000 446,169 53,831 89.2% - 457,601 403,769 88.2% 100.0% complete; final bills pending. 22 WW1104 SL Lepore Road P/S Replacement 52,000 402,000 72,918 329,082 18.1% 350,000 350,000 17,382 5.0% Started Out to bid, due May 22 23 Totals - FY11 $ 552,000 $ 973,840 $ 519,087 $ 454,753 53.3% $ 421,840 $ 807,601 $ 421,151 52.1% 24 25 FY2012 All four vehicles received and 26 --- Vehicles & Equipment $ 115,000 $ 115,000 $ 110,514 $ 4,486 96.1% $ 115,000 $ 115,000 $ 110,514 96.1% 100.0% processed by the end of January. 27 WD1201 Pay-As-You-Go Water Station 30,240 30,240 - 30,240 0.0% 30,240 30,240 - 0.0% Started Specs being developed 28 WD1202 R Misc. Distribution Upgrades 60,000 60,000 5,706 54,294 9.5% 60,000 60,000 5,706 9.5% 25.0% Misc. repairs or emergencies Deep Well #1 and #9 complete; Well 29 WD1203 R Wellhead Redevelopment Program 65,000 65,000 44,371 20,629 68.3% 65,000 65,000 44,371 68.3% 50.0% #10 rehab. 30 WD1204 R Emergency Generators 80,000 80,000 - 80,000 0.0% 80,000 - - 0.0% Grant dependent 31 WQ1201 WQI - Wesley Campus 51,200 51,200 262.50 50,938 0.5% 51,200 106,200 263 0.2% Started Project to start April 9, 2012. Initial design complete; under staff 32 WQ1202 WQI - New Street 97,120 97,120 9,600.00 87,520 9.9% 97,120 113,960 9,600 8.4% Started review. Rodney Road complete. Pennsylvania Avenue started. Madison and American Avenues 33 WQ1203 WQI - Silver Lake 279,840 279,840 129,655.70 150,184 46.3% 279,840 279,840 129,656 46.3% 40.0% pending. Design somplete. Bid package ready 34 WW1201 M/SL Inflow/Infiltration Removal 1,000,000 1,000,000 28,354 971,646 2.8% 1,000,000 1,000,000 28,354 2.8% Started for April bid. 35 WW1202 R SCADA Equipment Replacement 84,900 84,900 76,384 8,516 90.0% 84,900 84,900 76,384 90.0% 100.0% Complete 36 WW1203 R Misc. Sewer System Improve 37,000 37,000 9,935 27,065 26.9% 37,000 37,000 9,935 26.9% 50.0% Misc. repairs or emergencies BALTRAY PS not WIL. UNIV. Initial 37 WW1204 M Wilmington College Pump Station 25,000 25,000 18,708 6,292 74.8% 25,000 25,000 18,708 74.8% 60.0% design complete; staff reviewing. 38 WW1205 M Dover Brook Gardens P/S Replace 15,000 15,000 7,744.42 7,256 51.6% 15,000 15,000 7,744 51.6% 60.0% Initial design complete; staff review. 39 WW1206 M Brandywine Pump Station Replace 52,000 52,000 29,483.57 22,516 56.7% 52,000 52,000 29,484 56.7% 60.0% Initial design complete; staff review. McKee Rd Pump Station Initial design complete; staff review 40 WW1207 M Communator Replacement 10,000 10,000 7,197.05 2,803 72.0% 10,000 10,000 7,197 72.0% 60.0% 41 $ 2,002,300 $ 2,002,300 $ 477,914.42 $ 1,524,386 0.0% $ 2,002,300 $ 1,994,140 $ 477,914 24.0% 42 43 Grand Totals $ 14,142,640 $ 15,385,020 $ 8,898,531 $ 6,486,489 57.8% $ 4,224,140 $ 7,357,444 $ 3,587,295 48.8% Legend M = Multi-year project - a project with a specific schedule to occur over multiple years. R = Recurring project - a project that begins and ends each fiscal year and is re-budgeted to start over each fiscal year. SL = State Loan Project - construction phase is financed I = Impact Fee (partially) financed project

City of Dover 5 of 5 Electric Improvement & Extension Fund - Major CIP Projects April, 2012 TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Latest Project Project % Current Revised Fiscal % Project Project Project To Date Budget Budget Fiscal Yr. Fiscal Yr. YTD Budget Code Type Description Budget Budget Expenses Balance Spent Budget Budget Expenses Spent Status Comments 1 FY2011 2 EG1102 M Units 1 & 2 Cooling Tower 372,400 199,140 134,538 64,602 67.6% 25,410 25,410 400 1.6% Work deferred to 2012 Work suspended, awaiting 3 EG1107 M Units 1 & 2 Life Extension 802,000 409,000 308,968 100,032 75.5% 184,000 196,331 96,299 49.0% In process decision on units 1&2 operation 4 EG1112 M Unit 3 Heat Expansion Joint - 150,000 143,508 6,492 95.7% 70,000 82,807 76,315 92.2% Complete 5 EG1113 Units 1 & 2 Control Modifications - 150,000 141,033 8,967 94.0% - 25,700 16,732 65.1% In process Complete w/Spring outage 6 EG1114 Unit 3 Gas Line Modification - 60,000 39,516 20,484 65.9% - 36,207 15,723 43.4% Complete 7 $ 1,174,400 $ 968,140 $ 767,563 $ 200,577 79.3% $ 279,410 $ 366,455 $ 205,470 56.1% 8 9 FY2012 10 --- Vehicles & Equipment $ 168,828 $ 168,828 $ 105,971 $ 62,857 62.8% $ 168,778 $ 168,778 $ 105,971 62.8% All vehicles received 11 EE1201 Substation PT & CT Replacement 267,715 267,715 218,527 49,188 81.6% 267,715 267,715 218,527 81.6% In process 75% materials received 12 EE1202 R Lighting Project & Rehabilitation 50,000 50,000 49,832 168 99.7% 50,000 50,000 49,832 99.7% Complete 13 EE1203 R Equipment Replacement 40,000 40,000 10,525 29,475 26.3% 40,000 40,000 10,525 26.3% In process Equipment ordered 14 EE1204 Generator Replacement 50,000 50,000 30,961 19,039 61.9% 50,000 50,000 30,961 61.9% Complete 15 EE1205 M Frazier Substation Upgrade 765,247 155,000 153,359 1,641 98.9% 155,000 155,000 153,359 98.9% In process Materials ordered 16 EE1206 R Disb. Feeder Replacement 377,510 377,510 241,201 136,309 63.9% 377,510 353,060 241,201 68.3% In process On-going 17 EE1207 R Disb. Capacitors & Controls 100,000 100,000 27,064 72,936 27.1% 100,000 100,000 27,064 27.1% In process Materials ordered 18 EE1208 R Transmission Line Maintenance 75,000 75,000 75,002 (2) 100.0% 75,000 75,000 75,002 100.0% Started Materials ordered Scada Master Hardware 19 EE1209 Replacement 75,000 75,000 73,845 1,155 98.5% 75,000 75,000 73,845 98.5% Started Materials ordered 20 EE1210 Substation Battery - 24,500 24,686 (186) 100.8% 24,500 24,500 24,686 100.8% In process 60% materials received 21 EE1212 R UG Transformers 70,536 70,536 69,302 1,234 98.2% 70,536 70,536 69,302 98.2% In process On-going 22 EE1212 R UG Conductors 479,464 479,464 286,636 192,828 59.8% 479,464 479,464 286,636 59.8% In process On-going 23 EE1212 R Meters 50,000 50,000 17,652 32,348 35.3% 50,000 50,000 17,652 35.3% In process On-going 24 EG1201 Unit 3 Boiler Air Heater 440,000 440,000 265,932 174,068 60.4% 440,000 440,000 265,932 60.4% In process Will complete Spring outage; 25 EG1202 M Unit 3 Boiler Systems 390,000 130,000 61,643 68,357 47.4% 130,000 130,000 61,643 47.4% In process Will complete Spring outage; Unit 3 FD & ID Fan Control Damper 26 EG1203 Upgrade 92,000 92,000 56,878 35,122 61.8% 92,000 92,000 56,878 61.8% In process Will complete Spring outage; Unit 3 DCS Computers & Software 27 EG1204 Upgrades 85,000 85,000 - 85,000 0.0% 85,000 85,000 - 0.0% In process To be completed by 6/3012; 28 EG1205 R Misc. Equipment Replacement 70,000 70,000 21,280 48,720 30.4% 70,000 70,000 21,280 30.4% In process On-going; 50% complete Demineralizer Control Replace @ 29 EG1206 McKee Run 65,000 65,000 114 64,886 0.2% 65,000 65,000 114 0.2% In process Bids in Feb; Complete by June Unit 11 Component Replacement @ 30 EG1207 M Van Sant 50,000 50,000 44,915 5,085 89.8% 50,000 50,000 44,915 89.8% In process To be completed by 6/3012; Switchyard Blast Walls @ McKee 31 EG1208 Run 50,000 50,000 5,442 44,558 10.9% 50,000 50,000 5,442 10.9% In process To be completed by 6/3012; 32 EG1209 M Building Preservation @ McKee Run 38,000 38,000 32,461 5,539 85.4% 38,000 38,000 32,461 85.4% In process Completion 6/12 Unit 3 Cooling Water Line Life 33 EG1210 M Extension 25,000 25,000 - 25,000 0.0% 25,000 25,000 - 0.0% Defer to FY13 34 EG1211 M Unit 3 Stack Repairs 25,000 25,000 9,693 15,307 38.8% 25,000 25,000 9,693 38.8% In process Completion 6/12 35 EG1212 M Unit 3 Turbine Inspection 1,021,000 348,000 198,962 149,038 57.2% 348,000 348,000 198,962 57.2% In process Will complete Spring outage; Work complete, transferred 36 EG1213 M Unit 3 Aux System Components 542,000 113,000 47,682 65,318 42.2% 113,000 113,000 47,682 42.2% In process funding to EG1212 37 EU1201 R Distribution Upgrades 500,000 500,000 354,770 145,230 71.0% 500,000 500,000 354,770 71.0% In process On-going 38 $ 5,962,300 $ 4,014,553 $ 2,484,331 $ 1,530,222 0.0% $ 4,014,503 $ 3,990,053 $ 2,484,331 62.3% 39 40 Grand Totals $ 7,136,700 $ 4,982,693 $ 3,251,894 $ 1,730,799 17.3% $ 4,293,913 $ 4,356,508 $ 2,689,801 61.7% Legend M = Multi-year project - a project with a specific schedule to occur over multiple years. R = Recurring project - a project that begins and ends each fiscal year and is re-budgeted to start over each fiscal year. B = Bonded Project S = State fully or partially reimbursed project

FUND SUMMARY Total Collected $770,211.46 DEMEC Admin Fee Paid $30,215.03 State Admin Fee Paid $17,752.88 Grants Paid $506,767.00 Customer Only Grants/Fees Reserved and Amount Owed $22,415.50 Community Project Funds Requested $367,050.00 Energy Depot Paid $36,596.21 Efficiency Programs Paid $34,068.34 Solar Electric Power Association (SEPA) Fee $2,158.81 *Unencumbered Funds Available $2,811.22 Funding Shortfall Current Grant Payment Delay (Months) 0.0 * As of 06/05/2012 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 Reye Solar - Res $ 12,762.50 $ 750.00 $ - 4/16/2008 Lakeland Commercial Group Geo - Comm $ 10,800.00 $ 750.00 $ - 6/19/2008 & 08/25/2008 L.D. Shank - Triad Farms Solar - Comm $ 30,000.00 $ 750.00 $ - 10/6/2008 City of Dover Solar - Comm $ 40,820.00 $ 750.00 $ - 10/21/2008 Robert & Cynthia Hartman Geo HP- Res $ 1,800.00 $ 135.00 $ - 10/21/2008 Robert Varipapa Geo HP- Res $ 2,400.00 $ 180.00 $ - 2/27/2009 David Jump Solar - Res $ 15,000.00 $ 750.00 $ - 2/27/2009 Jakob Seren Solar - Res $ 15,000.00 $ 750.00 $ - 2/27/2009 William Sweet Solar - Res $ 15,000.00 $ 750.00 $ - 3/31/2009 LD Shank - Triad Farms Solar WH-Comm $ 3,000.00 $ 225.00 $ - 3/31/2009 Warren & Joan Seaver Geo HP- Res $ 3,000.00 $ 225.00 $ - 4/22/2009 William Sweet Solar HW $ 3,000.00 $ 225.00 $ - 4/28/2009 State of DE/DNREC - DE National Solar - Comm $ 30,000.00 $ 750.00 $ - 4/29/2009 Delaware Primary Care, LLC Solar - Comm $ 30,000.00 $ 750.00 $ - 9/11/2009 NCALL Solar - Comm $ 30,000.00 $ 750.00 $ - 9/11/2009 D. Brian Beckman Geo HP- Res $ 2,000.00 $ 150.00 $ - 9/21/2009 LKSC Dover, LLC Kids Cottage Solar - Comm $ 29,925.00 $ 750.00 $ - 10/5/2009 Mark F. Boller Geo HP- Res $ 3,000.00 $ 225.00 $ - 10/5/2009 John Welgan Solar - Res $ 15,000.00 $ 750.00 $ - 11/4/2009 LKSC Dover, LLC Kids Cottage Geo - Comm $ 12,000.00 $ 750.00 $ - 3/25/2010 Minaxi Patel Solar - Res $ 15,000.000 $ 750.000 $ - 3/23/2010 J. McGiffin Jr. & K. Doyle Geo HP- Res $ 3,000.000 $ 225.000 $ - 5/28/2010 Nancy Warner Geo HP- Res $ 1,200.000 $ 90.000 $ - 6/2/2010 David Teel Geo HP - Res $ 1,800.000 $ 135.000 $ - 6/2/2010 Dewey J. Barich Geo HP- Res $ 2,400.00 $ 180.000 $ - 7/12/2010 Mike & Sharonb Laverty Solar - Res $ 5,105.000 $ 382.880 $ - 8/19/2010 James Grilli Geo HP- Res $ 1,800.00 $ 135.000 $ - 8/19/2010 Michael Noble Solar - Res $ 15,000.000 $ 750.000 $ - 9/17/2010 David Teel Solar - Res $ 7,500.000 $ 562.500 $ - 3/8/2011 Michael & Carol Apgar Solar - Res $ 7,500.000 $ 562.500 $ - 3/17/2011 Elizabeth Murphey School Geo HP - Comm $ 9,200.000 $ 690.000 $ - 5/24/2011 Richard Avant Geo HP - Res $ 2,400.000 $ 180.000 $ - 6/23/2011 Charles Messina Plumbing Solar - Comm $ 10,000.000 $ 750.000 $ - 10/4/2011 Charles Bounds Geo HP - Res $ 1,800.000 $ 135.000 $ - 3/29/2011 Psychiatric Access Central DE Solar - Comm $ 13,187.500 $ 750.000 $ - 7/8/2011 Michael J. Kopp Geo - Res $ 2,300.000 $ 135.000 $ - 10/17/2011 City of Dover ** Geo HP $ 48,267.000 $ - 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 Geo - Comm $ 13,800.000 $ 750.00 3/7/2012 Elizabeth Murphey School Geo - Comm $ 12,000.000 $ 750.00 3/7/2012 Elizabeth Murphey School Geo - Comm $ 5,400.000 $ 405.00 3/7/2012 Elizabeth Murphey School Geo - Comm $ 1,800.000 $ 135.00 3/7/2012 Elizabeth Murphey School Geo - Comm $ 10,200.000 $ 750.00 3/7/2012 Frank Daniels Geo - Res $ 4,400.000 $ 330.00 (**$$ still available for future apps.) Total $ 506,767.00 $ 17,752.88 $ 3,435.00 ARRA RELIEF GRANTS PAID 6/10/2011 Arturo Sanchez Solar - PV $ 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 PENDING APPLICATIONS Applicant Grant Reservation Date Reserved Type Request Review Fee Reservation Approval Pending ABRA Associates, LLC Solar - PV - Com $10,770.00 $750.00 Reservation Approval Pending Delaware Tech Solar - PV - Com $6,940.00 $520.50 Total $ 17,710.00 $1,270.50 ENERGY DEPOT FEES 3/3/2008 Start-up Fees $5,872.50 4/15/2008 Start-up Fees $1,957.50 4/15/2008 Mar, Apr, May 2008 $1,692.13

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 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 Total Paid $36,596.21 ENERGY EFFICIENCY CAMPAIGNS/EDUCATION PROGRAMS 1,500 CFL Campaign & Educational 10/21/2008 Literature $5,012.29 12/11/2008 Reimbursement for Green $3,459.12 Thermal Imager for Home Audits 3/31/2009 Program $5,581.12 Eco @ Home Energy Conserv. 1/4/2011 Calendars $20,015.81 Total $34,068.34 Dover Library Commuity Grant Project Collections $5,021.15 1/2 of Oct 2009 GEF Payment $4,783.94 1/2 of Nov 2009 GEF Payment $4,813.23 1/2 of Dec 2009 GEF Payment $5,454.02 1/2 of Jan 2010 GEF Payment $5,147.49 1/2 of Feb 2010 GEF Payment $4,897.69 1/2 of March 2010 GEF Payment $3,976.14 1/2 of April 2010 GEF Payment $5,638.90 1/2 of May 2010 GEF Payment $5,645.35 1/2 of June 2010 GEF Payment $6,590.60 1/2 of July 2010 GEF Payment $7,786.09 1/2 of August 2010 GEF Payment $6,415.31 1/2 of Sept 2010 GEF Payment $5,327.96 1/2 of Oct 2010 GEF Payment $4,787.73 1/2 of Nov 2010 GEF Payment $4,939.75 1/2 of Dec 2010 GEF Payment $5,452.55 1/2 of Jan 2011 GEF Payment $5,410.35 1/2 of Feb 2011 GEF Payment $4,646.32 1/2 of March 2011 GEF Payment $4,742.22 1/2 of April 2011 GEF Payment $4,702.48 1/2 of May 2011 GEF Payment $5,664.97 1/2 of June 2011 GEF Payment $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 $0.00 1/2 of May 2012 GEF Payment 1/2 of June 2012 GEF Payment 1/2 of July 2012 GEF Payment 1/2 of Aug 2012 GEF Payment 1/2 of Sept 2012 GEF Payment 1/2 of Oct 2012 GEF Payment 1/2 of Nov 2012 GEF Payment 1/2 of Dec 2012 GEF Payment $165,693.47 Total Collections Total Dover Lib. Draws to Date $48,267.00 10/17/2011 $117,426.47 Total Funds Available for Draw