Attachment

UTILITY COMMITTEE AGENDA September 26, 2011 - 5:00 P.M. - Council Chambers - City Hall - City of Dover 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. Discussion - Informational Presentation by Delaware Electric Cooperative (Referred Back to Committee by Council on 09/12/2011) (On August 22, 2011, the Committee Recommended That the City Proceed with a Request for Proposals (RFP) for an Independent Study to Be Conducted by an Entity That Is Not Currently or Planned to Be Associated with the City of Dover, the Delaware Electric Cooperative (DEC), or Any Other Local Electric Company, to Determine the Feasibility of the City Remaining in the Electric Business, the Possibility of Getting Out of the Electric Business, and the Anticipated Ramifications of Either Approach) 2. Cost of Service Study to be Performed on the Electric Utility and the Possibility of Allowing Some Rate Classes to Shop for Services 3. Review of Utility Related Capital Investment Plan (CIP) (Electric and Water/Wastewater) 4. TEA/NAES Monthly Report (July) 5. Adjournment by 5:25 P.M. /tm S:\AGENDAS & MINUTES\Committee-Agendas\2011\09-26-2011 UTILITY Revised.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.

City of Dover Capital Investment Plan Project Tracking Report July 31, 2011 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 $ 78,000 $ - $ 404,682 $ 360,333 $ 843,015 Project Carry Forward Balances 686,750 87,045 773,795 Federal and/or State Grants 5,597,505 1,900,000 7,497,505 Revolving Fund Loans 3,910,330 3,910,330 Transfer from Capital Reserves 370,730 370,730 Proposed Bond Issue 1,000,000 1,000,000 Impact Fees 760,270 760,270 Library Donations/Contributions 2,334,889 2,334,889 Library Reserve 3,262,615 3,262,615 Transfer from Operating Funds 623,847 1,750,000 3,500,000 5,873,847 Interest Earned 10,900 38,400 49,300 Total Funding Sources (Unaudited) $ 12,907,756 $ 1,900,000 $ 7,512,032 $ 4,356,508 $ 26,676,296 Page 1 of 5

City of Dover General Fund - Major CIP Projects July, 2011 Hide TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Latest Project Project Current Fiscal Project Project Project To Date Budget % Budget Fiscal Yr. YTD % Budget Code Type Description Budget Budget Expenses Balance Spent Budget Expenses Spent Status Comments 1 FY2009 Bid Pack A - Done. 2 LB0901 M/G New Library Project $ 18,200,000 $ 24,679,934 $ 3,559,714 $ 21,120,220 14.4% $ 11,195,009 $ 13,951 0.1% Started Bid Pack B - Construction Started. 3 Totals - FY09 $ 18,200,000 $ 24,679,934 $ 3,559,714 $ 21,120,220 14.4% $ 11,195,009 $ 13,951 0.1% 4 5 FY2012 --- Ann FD truck Payment $ 244,820 $ 244,820 $ 1,631 $ 243,189 0.7% $ 244,820 $ 1,631 0.7% 6 --- Vehicles & Equipment 377,927 377,927 - 377,927 0.0% 377,927 - 0.0% Roof Replacement @ 7 PR1201 Dover Park 30,000 30,000 - 30,000 0.0% 30,000 - 0.0% 8 ST1201 Streets & Alleys Program 1,000,000 1,000,000 - 1,000,000 0.0% 1,000,000 - 0.0% 9 ST1202 Concrete Program 30,000 30,000 - 30,000 0.0% 30,000 - 0.0% Streets Dump Truck 10 ST1203 Refurbishment 30,000 30,000 - 30,000 0.0% 30,000 - 0.0% 11 Totals - FY12 $ 1,682,747 $ 1,682,747 $ 1,631 $ 1,681,116 0.1% $ 1,712,747 $ 1,631 0.1% 12 13 Grand Totals $ 19,882,747 $ 26,362,681 $ 3,561,345 $ 22,801,336 13.5% $ 12,907,756 $ 15,582 0.1% 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 rebudgeted to start over each fiscal year. G = Grant funded project Page 2 of 5

City of Dover Community Transportation & General Fund Street Funds - Major CIP Projects July, 2011 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 E. Water Street Brick $ 65,000 $ 65,000 $ - $ 65,000 0.0% $ - $ - - 0.0% Specialty contract needed. 3 Totals $ 65,000 $ 65,000 $ - $ 65,000 0.0% $ - $ - $ - 0.0% 4 5 FY 2009 6 Schutte Parking Lot $ 21,950 $ 21,950 $ - $ 21,950 0.0% $ - $ - - 0.0% Deferred 7 Totals $ 21,950 $ 21,950 $ - $ 21,950 0.0% $ - $ - $ - 0.0% 8 9 FY2012 10 Misc. Street Projects $ 2,200,000 $ 2,200,000 $ - $ 2,200,000 0.0% $ 2,200,000 $ 1,000,000 $ - 0.0% 11 TE1201 Lincoln Park Center - - - - 0.0% - 900,000 0.0% 12 Totals $ 2,200,000 $ 2,200,000 $ - $ 2,200,000 0.0% $ 2,200,000 $ 1,900,000 $ - 0.0% 13 14 Grand Totals $ 2,286,950 $ 2,286,950 $ - $ 2,286,950 0.0% $ 2,200,000 $ 1,900,000 $ - 0.0% 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 rebudgeted to start over each fiscal year. C = Project funded by combination of CT Funds and General Fund Page 3 of 5

City of Dover Water/Wastewater Improvement & Extension Fund - Major CIP Projects July, 2011 TOTAL PROJECT - PAST, CURRENT & FUTURE BUDGETS CURRENT FISCAL YEAR Original Latest Project Project % Approved 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 2008 Land site selected, starting 2 WD0804 M 1.0 MG Elevated Water Storage $ 4,196,600 $ 2,590,000 $ 21,084 $ 2,568,916 0.8% $ - $ 178,916 $ - 0.0% Started negotiations DNREC permitting ongoing; FY12 = 3 WD0805 M Piney Point Well 398,800 665,000 67,682 597,318 10.2% - 147,318 - 0.0% Started Constr. US 13 East Sanitary Sewer Project complete, holding retainage 4 WW0810 M/SL Interceptor 2,376,800 3,409,641 2,943,812 465,829 86.3% - 236,519 - 0.0% Started 5 Totals - FY08 $ 6,972,200 $ 6,664,641 $ 3,032,578 $ 3,632,063 45.5% $ - $ 562,753 $ - 0.0% 6 7 FY2009 8 WQ0905 M/SL Bayard Avenue $ 590,910 $ 490,910 $ 291,137 $ 199,773 59.3% $ - $ 204,120 $ 4,347 2.1% Started Installation is 85% complete 9 WQ0907 M/SL Route 13 Water Main 1,058,700 2,226,783 396,732 1,830,051 17.8% - 1,885,950 - 0.0% Started Installation is 60% complete 10 Totals - FY09 $ 1,649,610 $ 2,717,693 $ 687,870 $ 2,029,823 25.3% $ - $ 2,090,070 $ 4,347 0.2% 11 12 FY2010 Work is complete, close-out 13 WW1001 M/SL Inflow/Infiltration Removal $ 1,800,000 $ 1,800,000 $ 924,200 $ 875,800 0.0% $ - $ 875,801 $ - 0.0% Started documents in progress 14 WW1007 M/SL Fox Hall Pump Station 427,900 392,044 50,463 341,581 12.9% - 360,687 250 0.1% Started Bid Awarded 15 WW1008 M/SL Heatherfield F/M Rerouting 220,400 324,916 48,945 275,971 15.1% - 237,505 250 0.1% Started Bid Awarded Reviewing design and easement 16 WW1010 I Tar Ditch Interceptor Upgrade 518,230 518,230 22,871 495,359 4.4% - 495,359 - 0.0% Started issue. 17 Totals - FY10 $ 2,966,530 $ 3,035,190 $ 1,046,478 $ 1,988,712 34.5% $ - $ 1,969,352 $ 500 0.0% 18 19 FY2011 20 WQ1103 WQI - Ross Street - 76,840 4,250 72,590 5.5% 71,840 71,840 - 0.0% Preliminary design complete 21 WW1101 M/SL Inflow/Infiltration Removal 500,000 500,000 32,367 467,633 6.5% - 465,717 - 0.0% Started 30% complete 22 WW1104 SL Lepore Road P/S Replacement 52,000 402,000 55,536 346,464 13.8% 350,000 350,000 - 0.0% Complete Bidding in November 23 Totals - FY11 $ 552,000 $ 978,840 $ 92,153 $ 886,687 9.4% $ 421,840 $ 887,557 $ - 0.0% 24 25 FY2012 26 --- Vehicles & Equipment $ 115,000 $ 115,000 $ - $ 115,000 0.0% $ 115,000 $ 115,000 $ - 0.0% Ordered through State Contract 27 WD1201 Pay-As-You-Go Water Station 30,240 30,240 - 30,240 0.0% 30,240 30,240 - 0.0% 28 WD1202 R Misc. Distribution Upgrades 60,000 60,000 - 60,000 0.0% 60,000 60,000 - 0.0% Ongoing 29 WD1203 R Wellhead Redevelopment Program 65,000 65,000 - 65,000 0.0% 65,000 65,000 - 0.0% Well #1 under rehabilitation 30 WD1204 R Emergency Generators 80,000 80,000 - 80,000 0.0% 80,000 80,000 - 0.0% Grant dependent Design complete, late spring const. 31 WQ1201 WQI - Wesley Campus 51,200 51,200 - 51,200 0.0% 51,200 51,200 - 0.0% 32 WQ1202 WQI - New Street 97,120 97,120 - 97,120 0.0% 97,120 97,120 - 0.0% Design started, early spring const. Design complete, November const. 33 WQ1203 WQI - Silver Lake 279,840 279,840 - 279,840 0.0% 279,840 279,840 - 0.0% 34 WW1201 M/SL Inflow/Infiltration Removal 1,000,000 1,000,000 - 1,000,000 0.0% 1,000,000 1,000,000 - 0.0% Design started, early spring const. 35 WW1202 R SCADA Equipment Replacement 172,800 84,900 - 84,900 0.0% 84,900 84,900 - 0.0% Materials ordered, spring const. 36 WW1203 R Misc. Sewer System Improve 205,000 37,000 - 37,000 0.0% 37,000 37,000 - 0.0% Ongoing Design started - actually Baltray PS 37 WW1204 M Wilmington College Pump Station 125,000 25,000 - 25,000 0.0% 25,000 25,000 - 0.0% Dover Brook Gardens P/S Design started 38 WW1205 M Replace 65,000 15,000 - 15,000 0.0% 15,000 15,000 - 0.0% Brandywine Pump Station Design started 39 WW1206 M Replace 402,000 52,000 - 52,000 0.0% 52,000 52,000 - 0.0% McKee Rd Pump Station Design started 40 WW1207 M Communator Replacement 55,000 10,000 - 10,000 0.0% 10,000 10,000 - 0.0% 41 $ 2,803,200 $ 2,002,300 $ - $ 2,002,300 0.0% $ 2,002,300 $ 2,002,300 $ - 0.0% 42 43 Grand Totals $ 14,943,540 $ 15,398,664 $ 4,859,079 $ 10,539,585 31.6% $ 2,424,140 $ 7,512,032 $ 4,847 0.1% 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 rebudgeted to start over each fiscal year. SL = State Loan Project - construction phase is financed I = Impact Fee (partially) financed project Page 4 of 5

City of Dover Electric Improvement & Extension Fund - Major CIP Projects July, 2011 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 Work will be completed 2 EG1102 M Units 1 & 2 Cooling Tower 372,400 199,140 134,138 65,002 67.4% 25,410 25,410 - 0.0% during the fall outage work will be completed during 3 EG1107 M Units 1 & 2 Life Extension 802,000 409,000 212,669 196,331 52.0% 184,000 196,331 - 0.0% the fall outage Will be competed by Feb. 4 EG1112 M Unit 3 Heat Expansion Joint - 135,000 67,293 67,707 49.8% 70,000 82,807 100 0.1% Started 2012 Work will be completed 5 EG1113 Units 1 & 2 Control Modifications - 150,000 124,300 25,700 82.9% - 25,700 - 0.0% Started during the fall outage Work will be completed 6 EG1114 Unit 3 Gas Line Modification - 60,000 23,794 36,207 39.7% - 36,207 - 0.0% Started during the fall outage 7 $ 1,174,400 $ 953,140 $ 562,193 $ 390,947 59.0% $ 279,410 $ 366,455 $ 100 0.0% 8 9 FY2012 All vehicles on order from 10 --- Vehicles & Equipment $ 168,828 $ 168,828 $ - $ 168,828 0.0% $ 168,828 $ 168,828 $ - 0.0% State Contract 11 EE1201 Substation PT & CT Replacement 267,715 267,715 - 267,715 0.0% 267,715 267,715 - 0.0% Materials ordered 12 EE1202 R Lighting Project & Rehabilitation 50,000 50,000 - 50,000 0.0% 50,000 50,000 - 0.0% Materials ordered 13 EE1203 R Equipment Replacement 40,000 40,000 - 40,000 0.0% 40,000 40,000 - 0.0% Equipment ordered 14 EE1204 Generator Replacement 50,000 50,000 - 50,000 0.0% 50,000 50,000 - 0.0% 75% complete 15 EE1205 M Frazier Substation Upgrade 765,247 155,000 - 155,000 0.0% 155,000 155,000 - 0.0% Materials ordered 16 EE1206 R Disb. Feeder Replacement 377,510 377,510 - 377,510 0.0% 377,510 377,510 - 0.0% On-going 17 EE1207 R Disb. Capacitors & Controls 100,000 100,000 - 100,000 0.0% 100,000 100,000 - 0.0% Materials ordered 18 EE1208 R Transmission Line Maintenance 75,000 75,000 - 75,000 0.0% 75,000 75,000 - 0.0% Materials ordered Scada Master Hardware 19 EE1209 Replacement 75,000 75,000 - 75,000 0.0% 75,000 75,000 - 0.0% Materials ordered 20 EE1212 R UG Transformers 70,536 70,536 8,836 61,700 12.5% 70,536 70,536 8,836 12.5% On-going 21 EE1212 R UG Conductors 479,464 479,464 106,949 372,515 22.3% 479,464 479,464 106,949 22.3% On-going 22 EE1212 R Meters 50,000 50,000 5,460 44,540 10.9% 50,000 50,000 5,460 10.9% On-going Developing contract 23 EG1201 Unit 3 Boiler Air Heater 440,000 440,000 - 440,000 0.0% 440,000 440,000 - 0.0% documents Developing contract 24 EG1202 M Unit 3 Boiler Systems 390,000 130,000 - 130,000 0.0% 130,000 130,000 - 0.0% documents Unit 3 FD & ID Fan Control Developing contract 25 EG1203 Damper Upgrade 92,000 92,000 - 92,000 0.0% 92,000 92,000 - 0.0% documents Unit 3 DCS Computers & Developing contract 26 EG1204 Software Upgrades 85,000 85,000 - 85,000 0.0% 85,000 85,000 - 0.0% documents 27 EG1205 R Misc. Equipment Replacement 70,000 70,000 - 70,000 0.0% 70,000 70,000 - 0.0% On-going Demineralizer Control Replace @ Developing contract 28 EG1206 McKee Run 65,000 65,000 - 65,000 0.0% 65,000 65,000 - 0.0% documents Unit 11 Component Replacement Developing contract 29 EG1207 M @ Van Sant 50,000 50,000 - 50,000 0.0% 50,000 50,000 - 0.0% documents Switchyard Blast Walls @ McKee Developing contract 30 EG1208 Run 50,000 50,000 - 50,000 0.0% 50,000 50,000 - 0.0% documents Building Preservation @ McKee Developing contract 31 EG1209 M Run 38,000 38,000 - 38,000 0.0% 38,000 38,000 - 0.0% documents Unit 3 Cooling Water Line Life Developing contract 32 EG1210 M Extension 25,000 25,000 - 25,000 0.0% 25,000 25,000 - 0.0% documents Developing contract 33 EG1211 M Unit 3 Stack Repairs 25,000 25,000 - 25,000 0.0% 25,000 25,000 - 0.0% documents 34 EG1212 M Unit 3 Turbine Inspection 1,021,000 348,000 - 348,000 0.0% 348,000 348,000 - 0.0% Deferred Construction in FY12. 35 EG1213 M Unit 3 Aux System Components 542,000 113,000 - 113,000 0.0% 113,000 113,000 - 0.0% Deferred Deferred to FY12. 36 EU1201 R Distribution Upgrades 500,000 500,000 24,271 475,729 4.9% 500,000 500,000 24,271 4.9% On-going 37 $ 5,962,300 $ 3,990,053 $ 145,516 $ 3,844,537 0.0% $ 3,990,053 $ 3,990,053 $ 145,516 3.6% 38 39 Grand Totals $ 7,136,700 $ 4,943,193 $ 707,709 $ 4,235,484 79.4% $ 4,269,463 $ 4,356,508 $ 145,616 3.3% 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 rebudgeted to start over each fiscal year. B = Bonded Project S = State fully or partially reimbursed project Page 5 of 5

The Energy Authority, Inc. Monthly Management Committee Update – July 2011 August 30, 2011 Prepared by: Jamie Mahne Member Services Manager 904.360.1374 jmahne@teainc.org

TABLE OF CONTENTS I. Executive Summary ................................................................................................................ 1 Load Summary: ........................................................................................................................... 1 Generation Summary .................................................................................................................. 2 II. Budget Report ......................................................................................................................... 4 III. Energy Management ............................................................................................................ 6 IV. Operations Management ...................................................................................................... 8 i

I. Executive Summary Power Supply: Power Supply Costs FY2011-12 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May- Jun-12 12 Budget Actual Powers Supply costs were $1,108,438 over budget due to increased PJM load of 3,573 MWh. This variance is inclusive of 1,540MWh of test power generated by the Dover Sun Park in July. Average cost/MWh on the supply side was $97.47 compared to a budgeted cost of $87.51. High temperatures in PJM for the month of July resulted in high energy prices and increased load across the footprint. Dover’s hedge purchases for July 2011 totaled 64,360 MWh, which was 82% of the projected load. Versus actual load, this hedged percentage totaled only 78% of Dover’s needs for July. Dover’s power purchases from hedge transactions totaled $4,459,861 in July. Purchases from PJM totaled $2,620,311 (all in), with DA Energy purchases totaling $1,098,169 and Balancing Spot Market Energy purchases totaling $130,966. 1

Generation Summary Generation Revenue FY2011-12 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May- Jun-12 12 Budget Actual Net generation for the month of July credited by PJM was 17,096MWh. The budget did not expect any generation. Net generation revenue totaled $1,597,829 vs. a budget of $15,741. Dover’s units were dispatched for a total of 19 starts and ran for more than 336 hours in July. Unit 1 also completed PJM Capacity Testing in July. Operations Management Summary During the month of July, there were no restricted work days or lost time accidents. The facility has now gone 290 days without an OSHA recordable accident or a lost time reportable accident. The plant received no Notice of Violations (NOVs). There were three environmental deviations during the month. The first deviation occurred on July 22 when NOx emissions for the calendar day exceeded the Title V permit limit of 2.93 tons per day. The other deviations were due to high Total Dissolved Solids (TDS) at Outfalls 004 and 005 in excedance of the Delaware River Basin Committee (DRBC) limits. This is a new limit that plant staff is assessing how plant operating procedures and equipment will need to be modified to ensure future compliance. The actual expenses for July are $602,915 against a budgeted amount of $716,935 for a favorable variance of $114,020 or ≈ 15.90%. Risk Management Summary PJM power prices remained strong through the month of July, against falling natural gas prices. Subsequently, the PJM heat rate is trading near its highs. Natural gas storage remains in the middle of the 5-year range. 2

TEA executed two scheduled hedge purchases in July. The current projected cost of service is below: Power Year Hedge Ratio Blended Cost ($/MWh) 2011-12 83% $68.81 2012-13 74% $67.59 2013-14 46% $60.59 2014-15 24% $60.22 2015-16 3% $64.76 3

II. Budget Report Variance Report: Budget Actual Variance Jul-11 Jul-11 Load Forecast 78,431 82,004 (3,573) Power Supply Power Supply (inc. Mgt Fees) $6,167,515 $7,275,953 ($1,108,438) Capacity UCAP Obligated Purchased $695,864 $716,605 ($20,741) Total - Power Supply $6,863,379 $7,992,558 ($1,129,179) Power Generation O&M & Fixed Fuel Plant O&M $711,094 $602,915 $108,179 Fixed Fuel and Transport Charges $0 $0 $0 Subtotal Generation O&M & Fixed Fuel $711,094 $602,915 $108,179 Power Generation Production Margin Economic and reliability dispatch ($118,922) ($1,597,829) $1,478,907 Testing $0 $0 $0 Subtotal Generation Production Margin ($118,922) ($1,597,829) $1,478,907 Power Generation Non-Production Revenue Generation Capacity Credit ($573,981) ($592,550) $18,569 Emissions Allowance Sales $0 $0 $0 Black Start & Reactive Power Revenue ($33,933) ($74,849) $40,917 Subtotal - Non-Production Revenue ($607,913) ($667,399) $59,486 Total - Power Generation ($15,741) ($1,662,313) $1,646,572 Total - Utilities Cost $6,847,638 $6,330,245 $517,393 Unit Costs Total - Power Supply $87.51 $97.47 ($9.96) Total - Power Generation ($0.20) ($20.27) $20.07 Final Cost of Service to City of Dover Ratepayers $87.31 $77.19 $10.11 4

Variance Analysis: Power Supply Due to above normal temperatures in the mid-Atlantic for July, Dover consumed 3,573MWh above forecasted load. The increase in load along with strong prices in PJM resulted in a cost of $97.47/MWh for power supply, $9.96/MWh more than budget. For the month, the city realized an unfavorable variance of $1,129,179 for power supply vs. the monthly budget. $408,898 of this variance was due to increased volume purchased from PJM. $714,040 of the variance was due to above average prices in PJM (budgeted average of $114/MWh purchased from PJM/Sun Park vs. actual average of $155/MWh for PJM/Sun Park). Generation As noted, power generation realized a favorable budget variance of $1,646,572. Plant O&M expenses realized a favorable budget variance of $108,179. Power Generation Production Margin realized a favorable budget variance of $1,478,907. Dover’s Generation output in July was sold to PJM at an average of $161/MWh. 5

III. Energy Management Power Supply Load (MWh) FY 2011-12 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Budget Actual Dover’s total load in July was 82,004 MWh versus a forecasted load of 78,430MWh. Dover’s planned hedged volume was 82% of forecast. The increase in load resulted in a realized hedged volume of 78% of actual load. Dover’s planned energy cost/MWh of unhedged load was $114. The actual energy cost for unhedged load was $153/MWh. The following is a summary of Dover’s power purchases for the month of July: City of Dover's Wholesale Load Volume $'s Hedges 64,360 ($4,459,861.20) PJM Charges 82,004 ($3,336,915.77) TEA Fees 82,004 ($83,000.00) Dover Sun Park ($112,781.00) Total ($7,992,557.97) Cost to Serve $/Mwh ($97.47) 6

Purchased power variance report: Budget Actual Variance Load (MWh) 78,431 82,004 -3,573 Hedged Volume (MWh) 64360 64360 0 Unhedged Volume (MWh) 14,071 17,644 -3,573 Unhedged Volume (%) 18% 22% -4% Unit Energy Costs ($/MWh) $78.64 $88.73 ($10.09) All-in Unit Energy Costs ($/MWh) $87.51 $97.47 ($9.96) 7

Generation Dover produced 17,096MWh of generation over 15 days in July. The total revenue from energy generation was $2,754,723. Dover’s production margin equaled $1,597,829. Dover sold generation into PJM at an average price of $161.13. City of Dover's Wholesale Generation Net Generation Mwh 17,096.43 All In Generation Margin PJM Bill Energy $ 2,754,723.65 PJM Capacity $ 592,549.50 Black Start, Reactive Credit, DASR & EFORp $ 74,849.53 Gas Purchases $ (1,027,117.31) Oil Purchases $ - Transport / Cash Out $ (129,776.70) Gross Margin $ 2,265,228.67 Production Margin Generation Production Revenues (PJM) $ 2,754,723.65 Gas Purchases $ (1,027,117.31) Oil Purchases $ - Transport / Cash Out $ (129,776.70) Gross Production Margin $ 1,597,829.64 $/Mwh All In Generation Margin $ 132.50 $/Mwh Generation Production Margin $ 93.46 Fuel Purchases Dover’s generation was not dispatched on #2 Fuel Oil in July. Given the amount of run time, there were significant gas purchases for the units. These are listed below: Natural Gas Purchases New Jersey Natural Gas Date Volume Price Total 7/6/2011 2,000. 4.81 $9,620.00 8

7/6/2011 1,000. 4.65 $4,650.00 7/7/2011 4,000. 4.73 $18,920.00 7/7/2011 1,000. 4.65 $4,650.00 7/7/2011 6,000. 4.56 $27,360.00 7/11/2011 5,000. 4.77 $23,850.00 7/11/2011 3,000. 4.90 $14,700.00 7/12/2011 3,000. 4.80 $14,400.00 7/12/2011 5,000. 4.73 $23,650.00 7/11/2011 5,000. 4.89 $24,450.00 7/11/2011 4,500. 5.10 $22,950.00 7/12/2011 6,000. 4.96 $29,760.00 7/12/2011 1,500. 4.77 $7,155.00 7/18/2011 9,300. 5.175 $48,127.50 7/18/2011 4,000. 5.44 $21,760.00 7/19/2011 3,000. 5.30 $15,900.00 7/19/2011 6,000. 5.15 $30,900.00 7/20/2011 5,000. 5.40 $27,000.00 7/20/2011 3,000. 5.25 $15,750.00 7/20/2011 2,000. 5.13 $10,260.00 7/20/2011 3,500. 5.45 $19,075.00 7/21/2011 3,000. 5.60 $16,800.00 7/21/2011 10,000. 5.37 $53,700.00 7/22/2011 3,000. 5.40 $16,200.00 7/22/2011 5,000. 5.10 $25,500.00 7/21/2011 5,000. 5.10 $25,500.00 7/21/2011 5,000. 5.30 $26,500.00 7/22/2011 5,000. 5.10 $25,500.00 7/22/2011 7,500. 5.00 $37,500.00 7/22/2011 10,000. 5.40 $54,000.00 7/23/2011 20,000. 5.40 $108,000.00 7/26/2011 8,000. 4.85 $38,800.00 7/26/2011 2,000. 5.00 $10,000.00 7/28/2011 8,000. 4.83 $38,640.00 7/29/2011 9,000. 4.82 $43,380.00 7/28/2011 2,200. 4.95 $10,890.00 7/30/2011 4,700. 5.00 $23,500.00 7/30/2011 8,000. 4.90 $39,200.00 7/29/2011 2,500. 5.00 $12,500.00 9

7/12/2011 (2,500.) 4.60 -$11,500.00 7/18/2011 (615.) 4.81 -$2,958.15 Subtotal 197,585 $1,006,539.35 Hess Corporation Date Volume Price Total 7/6/2011 3,000.00 $4.680 $14,040.00 Subtotal 3,000 $14,040.00 PESCO Date Volume Price Total 7/5/2011 1144 $5.72 $6,537.96 Subtotal 1,144 $6,537.96 Total 201,729 ($5.09) ($1,027,117.31) 10

Transportation and Imbalance Below is a table of the transportation and imbalance charges incurred in July: ESNG was granted a motion to place suspended revised tariff sheets into effect on July 29, 2011 forward. The new IT rate will be $.0773/dth. Eastern Shore Transport and Imbalance Charges Imbalance/dth Imbalance/dth Cost/dth Total Cost 1190 $4.88 $5,807.20 $5,807.20 Transport Volume/dth $/dth Total Cost Firm/IT (Days 1-28) 176,513 $0.591700 $104,442.74 Firm/IT (Days 29-31) 25,261 $0.773000 $19,526.75 $123,969.50 Net ($129,776.70) 11

Emissions Emissions and Allowance Management Dover has elected not to include revenues from emission allowance sales in its 2011- 2012 fiscal year budget. Dover has more than sufficient allowances set aside for retirement (see Exhibit 1). Due to the expiration of EPA’s Clean Air Interstate Rule (CAIR) at the end of CY2011, any unused or unsold CAIR allowances will expire without residual value. Exhibit 1: Emissions Allowance Summary through July 31, 2011 2011-2012 EMISSIONS ALLOWANCE SUMMARY SO2 NOx Sale Allowance Allowance Sale Date Action Pric Rev. Allocation Revenue Allocation Price e Seas. Ann. N/A 2003-2006 139 0 - Carryover 1/1/08 2007 549 0 Carryover 1/1/09 2008 2,691 53 Carryover 1/1/09 2009 2,723 50 80 Allocation 2/1/10 2010 1,988 49 78 Allocation 1/1/11 2011 1,988 2 76 Allocation 4/1/11 2011 5 Reallocation 9/29/09 SO2 Sales (1,500) 11/12/09 NOx Ann. (45) Sales 11/19/09 SO2 Sales (1,410) 11/20/09 NOx Seas. (25) Sales 12/31/09 2009 (1) (6) (13) Emissions 12/31/10 2010 (54) (54) Emissions 10/31/10 EPA Linearity (68) (68) Testing Req. 2011 2010 Deficit 53 22 NOx Purchases 7/31/11 2011 YTD (2) 33 36 12

Emissions Pre-CAIR: TOTAL 3,189 - $0 45 71 - $0 ALLOWANCES CAIR: 3,975 TEA’s estimate, given current dispatch expectations, for the market value of the remaining CAIR allowance inventory is approximately $11,346 as of August 23, 2011. This represents $4,783 for 3,189 pre-CAIR SO2 allowances trading at $1.50/ton, $3,180 for 3,975 CAIR SO2 allowances trading at $0.80/ton, $3,172 for 47 annual NOx allowances trading at $67.50/ton and $210 for 21 seasonal NOx allowances trading at $10.00/ton. EMISSIONS & ALLOWANCE SUMMARY THROUGH JULY 31, 2011 Allowanc Cumulativ Cumulativ Emission Allowance Allowanc e e e Annual Allowanc s for July s sold in e Vintage Allocatio Annual Allowance e Balance 2011 July 2011 n Emissions s Sold SO2: 10,157 N/A 131 N/A 4,847 5,179 2007-10 SO2: 2011 1,988 0.1 0.7 0 0 1,985 NOx: 80 N/A 13 0 45 22 Ann. 2009 NOx: Seas 53 N/A 6 N/A 25 22 2009 NOx Ann. 78 N/A 122 N/A (22) (22) 2010 NOx Seas 50 N/A 122 N/A (53) (19) 2010 NOx Ann. 80 25.5 35.8 0 0 47 2011 NOx Seas 51 25.5 33.1 0 0 21 2011 EPA Transport Rule (Now known as Cross-State Air Pollution Rule or CSAPR) The final CSPAR was published in the August 8, 2011Federal Register (76 FR 48208), with an effective date of October 7, 2011. The first compliance period begins for annual SO2 and NOx allowances on January 1, 2012. As mentioned in last month’s report, it does not include compliance requirements for generating units located in Delaware and Dover will not be required to submit emission allowances for annual SO2, annual NOx or Seasonal NOx for compliance years 2012 and beyond. While there continues to be the possibility of legislative and legal challenges to this new rule, affected entities must assume it will become effective on the stated date and begin complying with the rule. 13

As stated on the EPA Website, "EPA will remove CAIR allowances of vintage years 2012 and greater from all AMS accounts on Friday, October 14, 2011. Within 2 or 3 days before this date, EPA will send an email to the designated representatives and authorized account representatives of accounts that include these CAIR allowances and remind these representatives of the scheduled removal of these CAIR allowances. After removal of the vintage year 2012 and greater CAIR allowances, on Monday, October 17, 2011, EPA will begin recording vintage year 2012 TR allowance allocations in compliance accounts of units as addressed in the notice of data availability (NODA) published in the Federal Register on July 18, 2011. You can view the unit-level TR allowance allocations, and the data upon which those allocations are based, at http://www.epa.gov/airtransport/techinfo.html. The Clean Air Act Title IV provisions for SO2 will remain in effect and Dover, which does not have significant SO2 emissions, will need to continue compliance with this program. SO2 and NOx CAIR prices continue to be deflated because of over-supply, as shown on Figures 1 and 2. Markets are just beginning to form for CSAPR allowance prices and the magnitude of CSAPR prices are significantly higher than recent CAIR allowance prices. Figure 1 – SO2 Allowance Prices SO2 Spot Market $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 Figure 2 – Seasonal NOx Allowance Prices 14

Seasonal NOx $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 Figure 3 was extracted from an EPA presentation, showing its estimates of allowance prices. While these will not directly impact Dover, it will likely have impact on natural gas and power prices in the eastern interconnection, including markets surrounding Delaware. 15

Figure 3 – EPA estimates of CSAPR Benefits and Allowance Prices RGGI and Federal Carbon Outlook RGGI allowance prices continue to price at very low levels due to over-supply, even dropping below the reserve price of $1.89/ton. TEA continues to monitor RGGI activities. In Congress, there continues to be little movement on climate legislation. EPA continues to pursue the “Tailoring Rule” which will impact new sources and Clean Air Act Title V permitting existing source. 16

IV. Operations Management NAES Corporation Dover, Delaware July 2011 Monthly Report NAES Scholarship Award is presented to Kayla Carrow, daughter of Operator II Eric Carrow, by Plant Manager Vince Scire. 17

Table of Contents 1.0 Environmental, Health and Safety 2.0 Financial 3.0 Operations 4.0 Maintenance 5.0 CIP 6.0 General Plant Information 7.0 Summary of NAES Performance 1.0 Environmental, Health and Safety: 18

During the month of July, there were no restricted work days or lost time accidents. The facility has now gone 290 days without an OSHA recordable accident or a lost time reportable accident. The plant received no Notice of Violations (NOVs). There were three environmental deviations during the month. The first deviation occurred on July 22 when NOx emissions for the calendar day exceeded the Title V permit limit of 2.93 tons per day. The other deviations were due to high Total Dissolved Solids (TDS) at Outfalls 004 and 005 in exceedance of the Delaware River Basin Committee (DRBC) limits. This is a new limit that plant staff is assessing how plant operating procedures and equipment will need to be modified to ensure future compliance. RATA and linearity testing on Unit 3 was conducted as part of the new CEMS analyzers recertification. The tests were completed with passing results achieved on both tests. CEMS training on the QA/QC Manual for the ICE Technicians was conducted and many process improvements were identified that are now being incorporated into the CEMS program. The facility received feedback regarding the DNREC Annual Air Audit for both McKee Run and VanSant with no issues identified at either site. DNREC is considering the 2011 audit closed with no follow-up actions necessary. Confirmation and approval from the EPA regarding the use of lower NOx emissions rates based on burning natural gas (versus #2 oil) for the Q3-Q4 2010 timeframe has been received. The facility is in the process of reviewing the revised data and submitting it into the EPA’s ECMPS system. This will result in a reduction of NOx emissions allowances being required for CY 2010. Finalization of the amount of allowances needed and the reconciliation of the NOx Budget accounts by the EPA will occur in the August/September time frame. It is estimated that emissions tonnage will be decreased from 119 tons to 89 tons as a result of the revisions. Environmental, Health and Safety Statistics Month Fiscal Year to Date (July) (7/1/11-6/30/12) NOVs 0 0 Opacity Deviations 0 0 Environmental Deviations 3 3 OSHA Recordable 0 0 OSHA LTA's 0 0 First Aid cases 0 0 Restricted Workday Accident 0 0 Near Miss 1 1 Man Hours Worked 4,090.25 4,090.25 Date last OSHA Recordable 10/14/10 Date last Lost Time Accident 10/14/10 Days since last OSHA recordable 290 Days since last Lost Time Accident 290 19

Emissions (NOx & SO2) All data thru 7/31/11 NOx Summary - Year (May-Sept.)Tons Year Unit #1 Unit #2 Unit #3 Unit #11 TOTAL 2009 0.9 0.7 4.2 0.6 6.4 2010 0.7 2.2 119.2 3.3 125.4 2011 1.8 1.5 28.6 1.2 33.10 NOx Summary - Year (Jan. – Dec.)Tons Year Unit #1 Unit #2 Unit #3 Unit #11 TOTAL 2009 0.9 0.7 10.1 0.6 12.3 2010 0.7 2.2 119.2 3.3 125.4 2011 1.8 1.5 29.8 2.7 35.80 CAIR NOx Allowances Summary* NOx Allowances CAIR CAIR NOx Available Total NOx NOx Allowance Balance CAIR NOx NOx Allowances (Per Facility, Prior to Tons Emitted Allowances Allowance Sold YTD Sale) (Yr/ Season) Purchased Vintage McKee Run VanSant YTD McKee Run VanSant (Yr/Season) McKee Run - (Yr/Season) (Yr/Season) (Yr/Season) VanSant 2009 45/25 75/50 5/3 12/5 - 1/1 0/0 – 0/0 18/0 4/2 119**/119** - 22##/53# – 2010 0 73/47* 5/3 -46/0 2/0 3/3 0/0 2011 0 75###/48### 5/3 30 /29– 3/1 0/0 - 0/0 45###/19### 2/2 Note ** - Higher NOx emissions are attributed to data substitution rules that use significantly higher emission rates than actually were emitted. The implementation of the data substitution rules were caused by performing a linearity test outside the grace period. NAES ESS was able to provide assistance in reducing the NOx emissions from 137 tons to 119 tons since the October report. A petition to the EPA was sent out in February that would result in a reduction in reported emissions. The EPA has given preliminary approval to the petition request although it is not official until the plant receives a signed EPA approval. Until the issue is resolved, the EPA has locked the annual account and no allowances will be deducted until that time. Note# - 53 tons were purchased to help compensate for the shortage in seasonal NOx allowances. Note## - 22 tons were purchased to help compensate for the shortage in annual NOx allowances. Note###- 2 tons (Seasonal and 4 tons (Annual) were reallocated by the EPA to the McKee Run 2011 account. SO2 Summary - Year (Jan.-Dec.)Tons Year Unit #1 Unit #2 Unit #3 Unit #11 TOTAL 2009 0.05 0.05 0.1 0.2 0.4 2010 0.0 0.0 0.3 0.0 0.3 2011 0.0 0.0 0.2 0.5 0.7 Note: Data is as of 7/31/2011 20

SO2 Allowances Summary SO2 Allowances Available Total SO2 SO2 (Per Unit, Prior to Sale & Tons Emitted SO2 SO2 Allowance Allowances Reconciliation) – Allowances Vintage Sold - YTD U3 and U11 Balance Unit #3 Unit #11 YTD 2003-2006 139 138 1 0 0 2007 2455 2585 138 98 170 2008 2392 2585 138 32 299 2009 0 2585 138 0 2723 2010 0 1850 138 0 1988 2011 0 1850 138 1 1987 Note: Data is as of 7/31/2011 CO2 Allowances Summary* CO2 CO2 CO2 Allowances Available Total CO2 CO2 Allowance Allowances (Per Facility, Prior to Tons Emitted Allowance Vintage Sold YTD Sale) Balance McKee Run VanSant 2009 0 59,805 1,699 5,796 55,708 2010 0 47,844 1,636 32,971 16,509 2011 0 35,883 1,227 16,222 20,888 2012 0 23,922 818 0 24,740 2013 0 11,961 409 0 12,370 Note: All CO2 allowance values are provided by the RGGI CO2 Allowance Tracking System 2.0 Financial Financial – Current Month (Estimated) Month –July 2011 Actual Budget Variance Personnel 215,521 278,125 62,604 Materials & Supplies 939 17,232 16,293 21

Administrative Expenses 386,455 421,478 35,123 Total $602,915 $716,935 $114,020 Financial – Fiscal Year to Date (Estimated) Number of Months – 1 Actual Budget Variance Personnel 215,521 278,125 62,604 Materials & Supplies 939 17,232 16,293 Administrative Expenses 386,455 421,478 35,123 Total $602,915 $716,935 $114,020 2.1 Variance analysis: The City of Dover Finance Department has closed the books for the month of July. The actual expenses for July are $602,915 against a budgeted amount of $716,935 for a favorable variance of $114,020 or ≈ 15.90%. The variance was due to the following: PERSONNEL EXPENSES – Lower straight labor, overtime, and labor burdens due to several open staff position accounted for a favorable variance of $62,604. Note: Included in this variance is a positive variance of $31,912 for the Employee Incentive Accumulator and Employee Incentive Burden Accumulator that will occur every month. These expenses were broken down into every month over the entire year instead of having them budgeted for June of 2012 which is when they would actually be expensed. MATERIALS AND SUPPLIES EXPENSES- Lower than budgeted expenses in Water/Sewer, Janitorial Services and Supplies, and City Building Maintenance contributed to realizing a favorable variance of $16,293. ADMINISTRATIVE EXPENSES – Lower than budgeted expenses in the areas of Electric, Environmental Expenses, Home Office Labor, Other Equipment / Maintenance and Combustion Turbine Maintenance contributed to a favorable variance of $35,123. The current budget forecast for the current fiscal year is $5,911,909 expensed versus an approved budget of $5,964,818 thereby realizing a 99.11%.expense rate. 3.0 Operations Unit Operations / Outages / Trips 22

In the month of July, Units 1, 2, 3 and 11 were dispatched one, one, twelve and five times respectively by PJM. During the month, Unit 1 also successfully completed the PJM Capacity Test for the Summer Demonstration Period. Month – July 2011 McKee McKee McKee MRS VanSant Total Unit 1 Unit 2 Unit 3 Facility Unit 11 All Units Capacity MW 17 17 102 136 39 175 On Line Hours Hrs 59.234 57.267 201.169 301.883 34.951 336.784 Starts # 1 1 13 15 5 20 Gross Generation MWh 561.129 564.344 16,075.871 17,201.344 1,134.612 18,335.956 Net Generation MWh 532.006 521.173 14,899.560 15,952.739 1,133.848 17,086.587 Total Auxiliaries MWh 65.841 79.889 1,509.480 1,655.210 2.120 1,657.330 Auxiliaries purchased MWh 36.718 36.718 333.169 406.605 1.356 407.961 Fuel Gas Used MMBTU 8,544.659 7,612.458 165,062.586 181,219.703 15,111.359 196,331.062 Fuel Oil Used MMBTU 0.0 0.0 0.0 0.0 0.0 0.0 Fuel Oil Used Gallons 0.0 0.0 0.0 0.0 0.0 0.0 Total Fuel MMBTU 8,544.659 7,612.458 165,062.586 181,219.703 15,111.359 196,331.062 Net Heat Rate BTU/KWh 15,947 15,503 11,003 11,282 13,224 11,411 Unit Trips # 0 0 0 0 0 0 Capacity Factor % 4.21 4.12 19.63 15.77 3.91 13.12 Availability Factor % 100.00 100.00 100.00 100.00 100.00 100.00 Commercial % 0 0 0 0 0 0 Unavailability (CU) Planned Outage Hours Hours 0.0 0.0 0.0 0.0 0.0 0.0 Maintenance Outage Hours 0.0 0.0 0.0 0.0 0.0 0.0 Hours Forced Outage Hours Hours 0.0 0.0 0.0 0.0 0.0 0.0 Reserve Shutdown Hours 684.766 686.733 542.818 1,914.317 709.049 2,623.366 Hours HW Boiler Gas Usage MMBTU 0 0 Pilot Gas Usage MMBTU 138,333 138,333 276,667 276,667 # Note: Does not include HWB or Pilot Gas. Fuel usage numbers are taken from fuel flow instruments. 2011-2012 Fiscal Year-to-Date ( 1 Month ) McKee McKee McKee MRS VanSant Total Unit 1 Unit 2 Unit 3 Facility Unit 11 All Units 23

Capacity MW 17 17 102 136 39 175 On Line Hours Hrs 59.234 57.267 201.169 301.883 34.951 336.784 Starts # 1 1 13 15 5 20 Gross Generation MWh 561.129 564.344 16,075.871 17,201.344 1,134.612 18,335.956 Net Generation MWh 532.006 521.173 14,899.560 15,952.739 1,133.848 17,086.587 Total Auxiliaries MWh 65.841 79.889 1,509.480 1,655.210 2.120 1,657.330 Auxiliaries purchased MWh 36.718 36.718 333.169 406.605 1.356 407.961 Fuel Gas Used MMBTU 8,544.659 7,612.458 165,062.586 181,219.703 15,111.359 196,331.062 Fuel Oil Used MMBTU 0.0 0.0 0.0 0.0 0.0 0.0 Fuel Oil Used Gallons 0.0 0.0 0.0 0.0 0.0 0.0 Total Fuel MMBTU 8,544.659 7,612.458 165,062.586 181,219.703 15,111.359 196,331.062 Net Heat Rate BTU/KWh 15,947 15,503 11,003 11,282 13,224 11,411 Unit Trips # 0 0 0 0 0 0 Capacity Factor % 4.21 4.12 19.63 15.77 3.91 13.12 Availability Factor % 100.00 100.00 100.00 100.00 100.00 100.00 Commercial % 0 0 0 0 0 0 Unavailability (CU) Planned Outage Hours Hours 0.0 0.0 0.0 0.0 0.0 0.0 Maintenance Outage Hours 0.0 0.0 0.0 0.0 0.0 0.0 Hours Forced Outage Hours Hours 0.0 0.0 0.0 0.0 0.0 0.0 Reserve Shutdown Hours 684.766 686.733 542.818 1,914.317 709.049 2,623.366 Hours HW Boiler Gas Usage MMBTU 0 0 Pilot Gas Usage MMBTU 138,333 138,333 276,667 276,667 Fuel Oil Inventory Monthly Monthly Fuel Monthly FY 10-11 Fuel FY 10-11 Inventory Inventory Purchases Inventory Inventory Purchases Inventory (Start) (End) (Month) (Change) (Start) (YTD) (Change) McKee Run (#2 Fuel Oil) 454,725 455,606 0 881 448,556 118,549 7,050 VanSant 153,212 153,549 0 337 143,099 38,079 10,450 (#2 Fuel Oil) Note: As measured by tank level instruments. Tank levels may change due to oil temperature. VanSant Lifetime through 7/31/11 Actual Starts Factored Starts Fired Hours VanSant 1268 2187.15 4164.66 Since HGP - Dec 2004 209 519.45 781.08 Team Report: 24

Operations personnel continue to support maintenance by working on Preventative Maintenance (PM) work orders and other work orders that they have the necessary skills to successfully complete the task. The Operations Department continues to utilize the Flex Team in both Operations and Maintenance areas to help in maintaining the plant. During the month of July, Operations staff successfully completed the PJM Capacity Test on Unit 1 for the Summer Demonstration Period. Operations personnel also completed pre-work on and the painting of the diesel fuel tank for the plant’s mobile equipment. The teams continue to get Hands-On training on plant equipment that is part of their EDQP program. The program is used to train an employee for a desired sequential position and also as a review of programs that will reinforce their current knowledge. The General Physics courses and the PJM on line courses are used in the training program as well. Capacity Testing – FY 2010-2011 Summer 2011 (June 1- Aug 31) Winter 2011-2012 (Dec 1- Mar 1) Unit Rated Net Reported Net Unit Rated Net Reported Net Capability (MW) Capability (MW) Capability (MW) Capability (MW) 1 17 17.06 1 17 * 2 17 17.67 2 17 * 3 102 102.31 3 102 0.0 VanSant 39 0 11 39 0.0 Total 175 137.04 Total 175 0.0 25

4.0 Maintenance During the month of July, plant maintenance staff continued addressing the backlog of work orders. There were sixty-two work orders issued with ninety-one work orders being completed during the month. The table below summarizes the monthly work order activities. Work Order Report July - 1 Outstanding From Outstanding Previous Issued This Completed at the end of Priority # Month Month This Month the month 1 21 9 18 12 2 37 20 29 28 3 38 9 18 29 4 34 0 2 32 5 2 3 1 4 SW1 0 0 0 0 SW2 0 0 0 0 SW3 0 0 0 0 SW4 0 0 0 0 SW5 0 0 0 0 PM 37 21 23 35 Totals 169 62 91 140 Note: PMs are included in the priority totals Notable activities during the month include: 1) Maintenance completed cleaning of each eyewash station spray nozzles. During the Operations Staff inspection of the stations, it was found that several stations had irregular spray patterns. Each nozzle was removed, properly cleaned, field tested and then placed back into service. 2) Maintenance staff completed the emergency repairs to fire protection system. During weekly fire pump testing, the system piping failed on an inline tee and union. Asbestos abatement was necessary so that the repairs could be completed. Installation of new piping and fittings was then completed and the Fire Protection System was then placed back into service. 3) Maintenance staff completed the replacement of the Unit Two air heater auxiliary air drive motor. Staff purchased and installed a new OEM replacement air drive. Air drive unit is the primary back up for the air heater electric drive which had failed during our last operations event. 26

4) IC& E staff and Diamond Electric technicians completed a thermographic survey of Unit three 4160V/480V switch gear and equipment breakers. During the evaluation process, it was discovered four breakers were found to have hot spots requiring immediate attention. Each hot spot identified in the final report was addressed. Follow up testing will be completed at a later date when the unit operates again to verify the hot spot was remedied. 5) IC&E staff investigated problems with VanSant starting diesel. Turbine speed signals two and three were giving the control system inconsistent inputs causing the diesel to abort its ramp up causing the unit to shut down on startup. To resolve the problem the PLC program was modified to address the speed signal momentary spike. The unit was tested during the next unit start up and no further problems were experienced. 5.0 Capital Improvement Projects (CIP) Project Description Update Number 27

Progress: ATS replaced outside panels on the tower during the Unit 3 Cooling month of June. No other work is planned for this project during the EG1101 Tower Life remainder of the fiscal year. Extension Schedule: Work scope development for work to be completed in 2013 will commence in February 2012. Units 1 & 2 Cooling Progress: The scope of work planned for 2011 was completed in EG1102 Tower Life June. Extension Schedule: Work planned for this fiscal year is in development Progress: Development of the work scope is in the process of Unit 3 Turbine commencing. NAES Turbine Services has been contacted to aid in EG1103 Inspection this endeavor. Schedule: Planning for 2011-2012 fiscal year has started. Progress: Development of the work scope is in the process of Unit 3 Aux System EG1104 commencing. Components Schedule: Planning for 2011-2012 fiscal year has started. Progress: This project is to assess and determine the actions necessary to prolong the life of Units 1 and 2. Repair costs based on turbine inspection results will have to be developed and supplied to Units 1 & 2 Life the City of Dover in order to make a decision on how and when to EG1107 Extension proceed. The plant is still waiting on estimated costs from Siemens. Training of plant staff on the equipment during plant operations and when the units were not operating occurred during the month. Schedule: Planning for 2011-2012 fiscal year has started. Progress: The 2011 work was completed on the expansion joint. Unit 3 Air Heater Insulation and lagging reinstallation commenced in June 2011. EG1112 Expansion Joint Schedule: The 2012 scheduled work will be completed by the end of January 2012 Progress: Started on the development of the project work scope Unit #3 Boiler Air EG1201 documents. Heater Schedule: Planning for 2011-2012 fiscal year has started. Progress: Started on the development of the project work scope Unit #3 Boiler EG1202 documents. Systems Schedule: Planning for 2011-2012 fiscal year has started. Progress: Started on the development of the project work scope Unit 3 FD & ID Fan EG1203 documents. Damper Upgrade Schedule: Planning for 2011-2012 fiscal year has started. Unit 3 DCS Progress: Started on the development of the project work scope EG1204 Computers & documents. Software Upgrades Schedule: Planning for 2011-2012 fiscal year has started. Progress: This project is for the unexpected needs that may occur Miscellaneous during a budget year that were unexpected due to equipment failure EG1205 Capital Equipment for example. Replacements Schedule: The funding is in place and there are no capital items identified at this time to go into this project fund. 28

McKee Run DI Progress: Started on the development of the project work scope EG1206 Controls documents. Replacement Schedule: Planning for 2011-2012 fiscal year has started. Progress: Started on the development of the project work scope VanSant Component EG1207 documents. Replacements Schedule: Planning for 2011-2012 fiscal year has started. McKee Run Progress: Started on the development of the project work scope EG1208 Switchyard Blast documents. Walls Schedule: Planning for 2011-2012 fiscal year has started. McKee Run Progress: Started on the development of the project work scope EG1209 Structural documents. Preservation Schedule: Planning for 2011-2012 fiscal year has started. Unit #3 Cooling Progress: Started on the development of the project work scope EG1210 Tower Line documents. Inspection Schedule: Planning for 2011-2012 fiscal year has started. Progress: Development of the work scope is in the process of EG1211 Unit 3 Stack Repairs commencing. Schedule: Planning for 2011-2012 fiscal year has started. 5.1 CIP Budget Approved Latest Project Budget Description Estimate Number ($ X ($ X 1000) 1000) EG1101 Unit 3 Cooling Tower Life Extension 0 0 EG1102 Units 1 & 2 Cooling Tower Life Extension 25 25 EG1103 Unit 3 Turbine Inspection 348 348 EG1104 Unit 3 Aux System Components 113 113 EG1107 Units 1 & 2 Life Extension 184 184 EG1112 Unit 3 Air Heater Expansion Joint 80 80 EG1201 Unit #3 Boiler Air Heater 440 440 EG1202 Unit #3 Boiler Systems 130 130 29

EG1203 Unit 3 FD & ID Fan Damper Upgrade 92 92 Unit 3 DCS Computers & Software EG1204 85 85 Upgrades Miscellaneous Capital Equipment EG1205 70 70 Replacements EG1206 McKee Run DI Controls Replacement 65 65 EG1207 VanSant Component Replacements 50 50 EG1208 McKee Run Switchyard Blast Walls 50 50 EG1209 McKee Run Structural Preservation 38 38 EG1210 Unit #3 Cooling Tower Line Inspection 25 25 EG1211 Unit 3 Stack Repairs 25 25 6.0 General Plant Information Training: CEMS training on the QA/QC Manual for the ICE Technicians was conducted and many process improvements were identified which are being incorporated into the CEMS program. 30

The final class was held for CPR and First Aid Training at the plant site and led by instructors from the Delaware Fire School. The class had to be rescheduled due to the dispatch of the generation units. Plant employees continue General Physics safety training and environmental courses to enhance their overall knowledge of permit and safety requirements. As the GPI courses are being completed the employee reviews the standard operating procedure (SMP) for the same topic they are training on to review NAES policy as well. Ray Lavender attended a three day seminar on Job Planning and Scheduling in Philadelphia. Calendar of Events Date PJM Summer Capacity Test Period June 1, 2011- August 31, 2011 Toxic Release Inventory (TRI) Annual Report July 1, 2011 Unit 3 RATA Testing July 12, 2011 McKee Run and VanSant Title V Semi-Annual Certification Due August 1, 2011 NOx Ozone Season Ends September 30, 2011 One Year Accident Free October 14, 2011 Units 1, 2, 3 and 11 Fall Outage October 3 to December 2, 2011 Winter Capacity Period December 1, 2011 to February 28, 2012 McKee Run and VanSant Title V Annual Certification Due February 1, 2012 NOx Emissions Reconciliation Due March 1, 2012 SO2 Emissions Reconciliation Due March 1, 2012 SARA III Report March 1, 2012 Annual VanSant Black Start Test March , 2012 Units 1, 2, 3 and 11 Spring Outage TBD Air Emission Inventory April 1, 2012 McKee Run Title V Permit Renewal April 20, 2012 EIA-860 Report April 29, 2011 Units 1, 2, and 3 Spring Outage TBD NOx Ozone Season Starts May 1, 2012 EIA-923 Report May 6, 2012 Fiscal Year 2011-2012 Ends June 30, 2012 7.0 Summary of NAES Performance to Date Plant Performance FY 2011-2012 Measure Month Year to Date YTD FY Maximum Incentive Incentive 31

Commercial 0% 0 $91,198 $91,198 Unavailability (CU) Safety 0 0 $17,099 $17,099 Environmental 0 0 $17,099 $17,099 Capacity Tests Summer Winter Summer Winter Completed Unit 1 Yes No Yes No $3,420 $3,420 Unit 2 No No Yes No $3,420 $3,420 Unit 3 No No Yes No $20,520 $20,520 Unit 11 No No No No $0 $6,840 Total YTD 95.71% Total YTD Incentive $152,757 $159,597 Incentive % Note: Units 1, 2 and 3 PJM Summer Capacity Tests have been successfully completed and would be entered into the PJM Winter Capacity Test Exemption Program. Once the Unit 11 PJM Summer Capacity Test is completed, it would also be entered into the PJM Winter Capacity Test Exemption Program. The YTD Incentive calculation reflects this information. 32

V. Appendix PJM Invoice Breakdown PJM Bill Summary July 2011 Gen Load Grand Total Auction Revenue Rights (68699.41) (68699.41) Balancing Operating Reserve (317288.30) 50384.25 (266904.05) Balancing Spot Market Energy (301638.31) 21048.59 (280589.72) Balancing Transmission Congestion (36391.31) 262416.48 226025.17 Balancing Transmission Losses (16069.10) (3035.57) (19104.67) Black Start Service (6111.93) 1657.10 (4454.83) Day-ahead Operating Reserve (10060.50) 4852.70 (5207.80) Day-ahead Scheduling Reserve (39270.02) 24592.95 (14677.07) Day-ahead Spot Market Energy (1603974.08) 1285257.06 (318717.02) Day-ahead Transmission Congestion (418030.91) 410064.92 (7965.99) Day-ahead Transmission Losses (51271.14) 284258.16 232987.02 Expansion Cost Recovery 408.58 408.58 FERC Annual Recovery 4736.93 4736.93 Generation Deactivation Refund (741.04) (741.04) Inadvertent Interchange 7092.99 7092.99 Load Reconciliation for Balancing Operating Reserve (2.39) (2.39) Load Reconciliation for FERC Annual Recovery (1.24) (1.24) Load Reconciliation for Inadvertent Interchange (3.83) (3.83) Load Reconciliation for Market Monitoring Unit (MMU) Funding (0.12) (0.12) Load Reconciliation for North American Electric Reliability Corporation (NERC) (0.19) (0.19) Load Reconciliation for PJM Scheduling, System Control and Dispatch Service (4.71) (4.71) Load Reconciliation for PJM Scheduling, System Control and Dispatch Service Refund 0.09 0.09 Load Reconciliation for Reactive Services 1.28 1.28 Load Reconciliation for Regulation and Frequency Response Service (36.43) (36.43) Load Reconciliation for Reliability First Corporation (RFC) (0.29) (0.29) Load Reconciliation for Schedule 9-6 - Advanced Second Control Center (0.47) (0.47) Load Reconciliation for Spot Market Energy (2864.92) (2864.92) Load Reconciliation for Synchronized Reserve (0.11) (0.11) Load Reconciliation for Transmission Congestion (129.62) (129.62) Load Reconciliation for Transmission Losses (39.06) (39.06) Load Reconciliation for Transmission Owner Scheduling, System Control and Dispatch Service (1.64) (1.64) Locational Reliability 716604.55 716604.55 33

Market Monitoring Unit (MMU) Funding 509.68 509.68 Meter Error Correction 173.43 173.43 Network Integration Transmission Service 270969.76 270969.76 Non-Firm Point-to-Point Transmission Service (862.30) (862.30) North American Electric Reliability Corporation (NERC) 731.98 731.98 Organization of PJM States, Inc. (OPSI) Funding 52.17 52.17 PJM Scheduling, System Control and Dispatch Service - Advanced Second Control Center 854.73 854.73 PJM Scheduling, System Control and Dispatch Service - Capacity Resource/Obligation Mgmt. 1036.02 1036.02 PJM Scheduling, System Control and Dispatch Service - Control Area Administration 14723.95 14723.95 PJM Scheduling, System Control and Dispatch Service - Market Support 3965.43 3965.43 PJM Scheduling, System Control and Dispatch Service - Market Support Offset (577.04) (577.04) PJM Scheduling, System Control and Dispatch Service - Regulation Market Administration 201.75 201.75 PJM Scheduling, System Control and Dispatch Service Refund - Capacity Resource/Obligation Mgmt. (76.57) (76.57) PJM Scheduling, System Control and Dispatch Service Refund - Control Area Administration (1262.05) (1262.05) PJM Scheduling, System Control and Dispatch Service Refund - Market Support (346.98) (346.98) PJM Scheduling, System Control and Dispatch Service Refund - Regulation Market Administration (16.57) (16.57) PJM Settlement, Inc. 577.04 577.04 Reactive Services 38251.07 38251.07 Reactive Supply and Voltage Control from Generation and Other Sources Service (29467.58) 31868.49 2400.91 Regulation and Frequency Response Service 39604.38 39604.38 Reliability First Corporation (RFC) 1110.61 1110.61 RPM Auction (592549.50) (592549.50) Synchronized Reserve 15109.97 15109.97 Synchronous Condensing 254.33 254.33 Transmission Enhancement 14547.77 14547.77 Transmission Losses (98550.84) (98550.84) Transmission Owner Scheduling, System Control and Dispatch Service 6251.38 6251.38 Day-ahead Operating Reserve for Load Response 0.74 0.74 Balancing Operating Reserve for Load Response 0.72 0.72 Load Reconciliation for Organization of PJM States, Inc. (OPSI) Funding (0.01) (0.01) 34

Load Reconciliation for Day-ahead Scheduling Reserve (2.49) (2.49) Load Reconciliation for Synchronous Condensing (0.37) (0.37) Grand Total $(3,422,122.68) $3,336,915.77 $(85,206.91) 35