Attachment

UTILITY COMMITTEE AGENDA May 29, 2007 - 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-m ail at Tm cdowell@dover.de.us) should you wish to be recognized. AGENDA ADDITIONS/DELETIONS 1. Dedication of Rights-of-Way and Public Infrastructure - Fox Hall West 2. Update - Options to Address Regulation 1146 Emission Control Requirements 3. PACE/NAES A. Update on Calculation Issue B. Monthly Report (April) 4. Adjournment by 6:00 P.M. /tm S:\ClerksOffice\Agendas&Minutes\Committee-Agendas\2007\05-29-2007 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: Utility Committee AGENDA ITEM: 05/29/2007 DEPARTMENT OF ORIGIN: Public Services / Public Works DATE SUBMITTED: 5/22/2007 PREPARED BY: Scott D. Koenig, P.E., Public Services Manager SUBJECT: Dedication of Rights-of-Way and Public Infrastructure – Fox Hall West (Phases IV & V) REFERENCE: N/A RELATED PROJECT: N/A APPROVALS: City Manager EXHIBITS: Attachment A – List of Public Improvements to be accepted by the City of Dover Attachment B – Map EXPENDITURE REQUIRED: $ N/A AMOUNT BUDGETED: $ N/A FUNDING SOURCE (Dept./Page in CIP & Budget): N/A TIMETABLE: All infrastructure improvements will become the responsibility of the City of Dover upon action by City Council. RECOMMENDED ACTION: Acceptance of dedication of rights-of-way and public infrastructure in Phases IV & V of the Fox Hall West subdivision. Dedication is to include all of the referenced public improvements. BACKGROUND AND ANALYSIS The developer of the Fox Hall West Subdivision (Phases IV & V), Tony Ashburn, Inc., has requested that all rights-of-ways and public infrastructure improvements related to this subdivision be dedicated to the City of Dover for permanent ownership and maintenance. That attached map (Attachment B) shows the general location and configuration of the subject rights-of-way. Tony Ashburn, Inc. has constructed all of the improvements in accordance with City standards and specifications. After construction was completed, City staff inspected the public improvements and provided the developer with a list of repairs to be made to meet the City of Dover Standards and Specifications for Public Works Construction. As of this date, all work has been completed by the developer. A one (1) year Maintenance Agreement, Maintenance Bond and a Release of Liabilities have been submitted by the developer. In addition, as-built drawings have been submitted to the Department of Public Works for their permanent records.

DEDICATION OF RIGHTS-OF-WAY AND PUBLIC INFRASTURCTURE FOX HALL WEST (PHASES IV & V) ATTACHMENT A The following is a list of all public improvements which are to be accepted by the City of Dover: Sewer Utility Infrastructure (estimated construction value = $ 81,600.00): 8" PVC Sanitary Sewer Main - 2,946 l.f. 4” PVC Sanitary Sewer Laterals - 1,526 l.f. (48 laterals) 4' Diameter Sanitary Sewer Manholes - 13 ea. (78.23 v.f.) Water Utility Infrastructure (estimated construction value = $ 100,500.00): 4” Ductile Iron Water Main - 165 l.f. 6” Ductile Iron Water Main - 337 l.f. 8” Ductile Iron Water Main - 3,383 l.f. 3/4” Type “K” Copper Water Service Line - 1,440 l.f. (48 services) 8” Gate Valves - 12 ea. 6” Gate Valves - 1 ea. 4” Gate Valves - 1 ea. 6” Hydrant Valves - 4 ea. Fire Hydrants - 4 ea. 2” Blow Off Assembly - 1 ea. Storm Water Infrastructure (estimated construction value = $ 104,500.00): Yard Basins - 3 ea. Single Catch Basins - 19 ea. Double Catch Basins - 1 ea. 4’ Diameter Storm Water Manholes - 1 ea. 15” Type III Reinforced Concrete Pipe - 1,775 l.f. 18” Type III Reinforced Concrete Pipe - 125 l.f. 24” Type III Reinforced Concrete Pipe - 610 l.f. 30” Corrugated Metal Pipe - 150 l.f. 36” Corrugated Metal Pipe - 480 l.f. Street Infrastructure: (0.69 miles) (estimated construction value = $ 406,700.00) Carnoustie Road Station 00+00 to Station 15+08 l.f. Shinnecock Road Station 00+00 to Station 17+05 l.f. Hazeltine Road Station 00+00 to Station 02+40 l.f. Burning Tree Road Station 17+00 to Station 18+90 l.f. Total = 3,643 l.f.

City of Dover April Monthly Report Asset, Energy and Risk Management May 15, 2007 This Report was produced by Pace Global Asset Management, LLC (“Pace Global”) and is meant to be read as a whole and in conjunction with this disclaimer. Any use of this Report other than as a whole and in conjunction with this disclaimer is forbidden. Any use of this Report outside of its stated purpose without the prior written consent of Pace Global is forbidden. Except for its stated purpose, this Report may not be copied or distributed in whole or in part without Pace Global’s prior written consent. This Report and the information and statements herein are based in whole or in part on information obtained from various sources as of April, 2007. While Pace Global believes such information to be accurate, it makes no assurances, endorsements or warranties express or implied, as to the validity, accuracy or completeness of any such information, any conclusions based thereon, or any methods disclosed in this Report. Pace Global assumes no responsibility for the results of any actions and inactions taken on the basis of this Report. By a party using, acting or relying on this Report, such party consents and agrees that Pace Global, its employees, directors, officers, contractors, advisors, members, affiliates, successors and agents shall have no liability with respect to such use, actions, inactions, or reliance. This Report does contain some forward-looking opinions. Certain unanticipated factors could cause actual results to differ from the opinions contained herein. Forward-looking opinions are based on historical and/or current information that relate to future operations, strategies, financial results or other developments. Some of the unanticipated factors, among others, that could cause the actual results to differ include regulatory developments, technological changes, competitive conditions, new products, general economic conditions, changes in tax laws, adequacy of reserves, credit and other risks associated with City of Dover and/or other third parties, significant changes in interest rates and fluctuations in foreign currency exchange rates. Further, certain statements, findings and conclusions in this Report are based on Pace Global’s interpretations of various contracts. Interpretations of these contracts by legal counsel or a jurisdictional body could differ. over 25 Website: www.paceglobal.com Washington New York Houston Columbia San Diego London Moscow Mexico City

TABLE OF CONTENTS Executive Summary ........................................................................................................ 2 Purchased Power and Energy Management................................................................... 5 Generation Management ................................................................................................ 8 Operations Management............................................................................................... 10 Risk Management ......................................................................................................... 16 Appendix 1 .................................................................................................................... 26 Power Purchases – Hedge Transaction Details ........................................................ 26 Appendix 2 .................................................................................................................... 28 PJM Invoice Breakdown ............................................................................................ 28 Appendix 3 .................................................................................................................... 29 North American Energy Services - April 2007 Monthly Report .................................. 29 Proprietary & Confidential 1 Dover Monthly PGAM Report April 2007 - Final

EXECUTIVE SUMMARY Generation, Operations and Asset Management Net generation for the month of April credited by PJM was 85 MWh, as compared to a budget of 1,800 MWh. VanSant Unit 11 experienced a real time run for 2.7 hours on April 28th on dispatch by PJM. A compressor off-line water wash was also performed on the Van Sant 11 just prior to its’ annual maintenance outage. Unit 11 internal borescope inspections during the outage provided preliminary feedback that appears positive. A final assessment and report on Unit 11 is due in May. Generation v Budget 15000 12000 MWh 9000 6000 3000 0 06 07 07 20 20 20 ly n ly Ju Ja Ju Actual Gen Budget Gen During the month of April, North American Energy Services (“NAES”) reported that there were no lost time accidents, OSHA reportable incidents or environmental Notice of Violations. The Employee-Plant Safety Committee held a lunch time cook-out in April to commemorate two years of accident free operation. The plant was notified by DNREC that they had approved an alternate procedure for monitoring the McKee Run Fuel Oil Tank #1 and Oil Inventory until an out of service inspection can be completed. This inspection must be completed no later than June 1, 2008. NAES and PACE are studying scenarios to optimize the remaining #6 fuel oil inventory prior to the June 2008 deadline. Costs attributable to the operations of the McKee Run and VanSant stations for April were $130,991 below a budget of $443,106 due to favorable variances in personnel, administrative, EH&S, maintenance and operating costs. For power year 2006-07, operations are $916,293 below a budget of $4,687,228. Energy Management Wholesale load for the month of April was 56,152 MWhs versus a three year historic load of 56,000 MWhs. Purchased power (or hedges) accounted for 60,720 MWhs of this volume at a cost of $4.47 million. Purchases and sales as well as other PJM related charges accounted for an additional credit of $77,370, inclusive of all load related fees. Total purchased power cost for the month of April was $4.61 Proprietary & Confidential 2 Dover Monthly PGAM Report April 2007 - Final

million resulting in an all in monthly cost of power (including fees) of $82.19/MWh, or $1.81/MWh below the targeted annual average of $84.00/MWh. Dover Load v 3 Year Average Load 100,000 75,000 MWh 50,000 25,000 0 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Actual Average Proprietary & Confidential 3 Dover Monthly PGAM Report April 2007 - Final

Risk Management PJM wholesale power prices continued to experience upward movement throughout the forward price periods since the last reporting period (ending 4/19/07). For example, the average forward on-peak price for the upcoming Power Year 2008/2009 increased by $2.00 per MWh, or 2.2 percent, while the average forward Off peak price for the Power Year 2008/2009 increased by $1.48 per MWh, or 1.7 percent. This upward movement is indicative of the persistent market volatility that the City’s risk management program is designed to manage. The City’s expected wholesale cost-of-service for 2007- 08 and 2008-09, and to a lesser extent for 2009-10, is significantly insulated from such adverse price movements. Pace Global and the City have implemented several major components of a comprehensive hedging strategy for power year 2008-09 and beyond. At the April 19 ERMC meeting, the structure and objectives of the program were ratified; these consist thus far of integrated programmatic and discretionary hedging decision protocols designed to work together to ensure stable, predictable power prices for the City’s ratepayers for the next several power years. Pace Global anticipates that the program structure will be enhanced at the next ERMC meeting to include defensive hedging protocols. The first element of the programmatic hedging strategy targeting peak usage was implemented in two sets of purchases on April 24 and May 8. Load Cost v Budget Cost 87.00 EOY Projection = $82.90/MWh 85.00 $/MWh 83.00 81.00 79.00 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Actual Weighted Average Budget Proprietary & Confidential 4 Dover Monthly PGAM Report April 2007 - Final

PURCHASED POWER AND ENERGY MANAGEMENT Monthly Market Management Highlights • Aggregate Day Ahead demand was up slightly from last month. Favorable real time purchases resulted in load following costs well-below budget despite a volatile Real Time PJM market. The City of Dover should expect invoices from the suppliers with whom they have entered into electric supply deals. The table below provides a list of counterparties, price, and the total cost per deal. The City of Dover was over hedged for the month of April, resulting in an overall PJM invoice credit for the credit of $77,370. April Hedges or Purchased Power Counterparty Volume (MWh) Average Cost Cost to Dover ($/MWh) ($ millions) BP 18,000 72.89 $1.312 Constellation 26,400 77.32 $2.041 Integrys 16,320 68.20 $1.113 Connective (Capacity Only) 354 MW $5.00/MW.d $.00177 Total Energy Purchases 60,720 73.59 $4.468 Dover Load 56,152 Load Cost v Budget Cost 87.00 EOY Projection = $82.90/MWh 85.00 $/MWh 83.00 81.00 79.00 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Actual Weighted Average Budget Proprietary & Confidential 5 Dover Monthly PGAM Report April 2007 - Final

PJM Power Balancing and Load Related Fees Purchased Power (Hedges): 60,720 MWh’s @ $73.59/MWh: $4,468,081 Power Balancing and Additional PJM Related Credit: ( $77,370) Total Cost to Serve Load (60,720 MWh’s) $4,390,711 All in $/MWh load cost inclusive of all fees: $82.19/MWh Actual Dover load of 56,152 MWh was 0.27% above the 3 year historic load of 56,000 MWh. The April Cost of Service of $82.19 yields and end of year projection cost of $82.90 based on ten months of actuals and two months of projections. This is below the 2006-2007 target of $84.00. Purchased Fuel and Transportation Natural gas commodity spot purchases were necessary to supply gas to Van Sant Unit 11 to support the April 28th real time run, as well as to provide gas to VanSant Unit 11 during the pre-outage water-wash. The weighted average incurred gas price for 1,375 Dth was $8.80 per Dth. Spot Gas Purchases Date Volume (Dth) Price ($/Dth) Total Commodity Cost ($) 27-Apr 375 $7.48 $2,805.00 28-Apr 1,000 $9.30 $9,300.00 Totals 1,375 $8.80 $12,105.00 Gas was also separately purchased on a firm basis to maintain the No.6 fuel oil inventories at McKee Run at approximately 140 degrees. This firm delivery base load gas supply has been purchased from Sempra Energy. The Details of this deal are as follows: Firm Gas Supply Price Per dth Total Cost 50 dth/day $7.73 $11,592 Gas Transportation Purchased Eastern Shore Natural Gas Pipeline and TransCo agreements provide for deliveries to the McKee Run and VanSant stations. These charges include a firm demand charge and prior period adjustments as follows: ESNG FT Demand Charge $4,038 TransCo FT Demand Charge $4,302 Total Purchases $8,340 Proprietary & Confidential 6 Dover Monthly PGAM Report April 2007 - Final

Other Gas Purchases For the month of April 2007, Eastern Shore’s cash out is as estimated below. PGAM made every effort to minimize the cash out. Commodity and transportation imbalances and demand charges on Eastern Shore Pipeline for the month resulted in a cost of $2,473.36 to the City, and are summarized as follows. Imbalance (dth) Estimated $/dth Estimated Total Cost 265 $8.55 $2265.75 Transport Volume Estimated $/dth Estimated Total Cost Firm 2,791 $0.0168 $46.89 IT 274 $0.5866 $160.72 Purchased Commodity Fuel Oil Summary No oil was burned in the month of April. The volumes provided below are estimated to reflect the end on month inventories. Number 2 fuel oil has been purchased due to the significant rise in the price from the level of $1.87/gallon as quoted to the Management Committee on April 20th. The current market price sits at $2.00/gallon. PGAM continues to monitor the market daily in order to procure supply at more attractive pricing levels. Tank Inventory Estimates as of April 30 Days of Full Load Tank Tank Capacity (gal) Inventory (gal) Burn (24 Hours) #6 Oil 2,554,105 1,207,208 9 #2 Oil 258,000 116,848 4 April 2007 Burns Date #6 Oil Burns Inventory Market Price Inventory Market Cost (gal) Price ($/gal) ($/gal) Cost NA NA NA NA NA NA Proprietary & Confidential 7 Dover Monthly PGAM Report April 2007 - Final

GENERATION MANAGEMENT Monthly Generation Management Highlights: • Van Sant Unit 11 was dispatched for 2.7 hours on April 28th realizing a generation production margin of $882, on a unit production margin of $10.39/MWh sold. • One thousand tons of 2006/2007 vintage SO2 allowances were sold on April 19th. This sale included 673 tons of 2006 vintage SO2 allowances and 327 of 2007 vintage SO2 allowances. The transaction netted $466.50 per ton or $466,500 for the City. Dover generation has 2385 tons of SO2 allowances remaining in 2007. Generation Financial Performance Per the table below, the VanSant station experienced a generation production margin of $456 on power sales of 85 MWh for the month of April. The average realized unit generation production margin was $5.37 per MWh. Generation Production Margin Transaction Volumes Revenue/(Cost) PJM Invoice for Power Sold 85 MWh’s $11,822.92 Gas 1225dth ($10,780.00) #6 Oil 0 gal $0 #2 Oil 0 gal $0 IT Transport 0 dth ($160.72) Generation Production Margin 85 MWh’s $882.20 1. Historical actual results have been amended to reflect oil usage to reflect corrected oil use data. 2. Chart includes out of merit dispatch from October 06 to January 07. Ge ne ration Production Margin v s Budge t 500 450 400 350 300 250 200 150 100 $ 100 0 50 0 J u A S O N D J a F M A M J ly ug e c o e n eb a p a u n u p to v c u ru rc ril y e -50 s te b e m e m a h t m er b b ry a b e e ry -100 er r r -150 -200 -250 -300 -350 -400 Budget Actual Chart includes out of merit dispatch from October 06 to January 07. Proprietary & Confidential 8 Dover Monthly PGAM Report April 2007 - Final

Non-Production Energy Revenues and Costs The following non-production energy revenues and costs are generally fixed and not directly related to generation dispatch and power production. Generation Fixed Cost Transaction Volumes Revenue/(Cost) PJM Invoice (Black Start) NA $4,977.77 Eastern Shore FT 1875 dth ($4,037.78) Transco 3100 dth ($4,302.60) Gas 1875 dth ($15,231.64) Total Fixed Cost ($18,594.24) 1. Gas use was for #6 FO heating a pre-outage water wash Emissions and Allowance Management One thousand tons of 2006/2007 vintage SO2 allowances were sold on April 19th, resulting in the current emissions allowance balances shown in the table below. This sale included 673 tons of 2006 vintage SO2 allowances and 327 of 2007 vintage SO2 allowances. Dover generation has 2385 tons of SO2 allowances remaining in 2007. EMISSIONS & ALLOWANCE SUMMARY Allowance Allowance Emissions Emissions Allowances Allowances Allowance Vintage Allocation Month YTD Sold Month Sold YTD Balance SO2 – 2006 2725 n/a 521 673 2673 0 SO2 – 2007 2723 0 11 327 327 2385 NOx – 20072 198 0 0 0 0 198 Notes: (1) An adjustment to the fuel oil sulfur content resulted in a lowering of SO2 emissions estimates for 2006. (2) NOx emissions pertain only to Seasonal emissions (May 1 – Sep 30) On April 19th, a sale of 1,000 tons of 2006/2007 vintage SO2 allowances was made to Louis Dreyfus Energy Service, LP. The transaction netted $466.50 per ton or $466,500 for the City. Combined with the 170 tons NOx credits sold in 2006 for $950 net per ton (yielding $161,500) and the prior 2000 ton SO2 sale (yielding $853,500), net emissions allowance sales revenue for the 2006-07 power year is $1,481,500 After the transactions referenced above, the City of Dover has 2,385 vintage 2007 SO2 allowances remaining. If McKee Run and Van Sant units experience operating conditions similar to 2006, the City of Dover will have approximately 2,350 excess 2007 vintage SO2 allowances this year. No activity occurred with respect to City of Dover NOx allowances. Note that NOx allowance retirement is only applicable to generation during the Ozone Season or generation between May 1 and September 30 of each calendar year. For 2007, the City of Dover has 198 tons of NOx allowances. Based on previous year operating statistics, approximately 173 tons of NOx allowances will be available for trade. SO2 price have been steadily rising over the last two weeks and are currently approximately $585 per ton. Current NOx allowance market prices are stable between $950 and $1000 per ton. PGAM and the City will discuss timing for additional allowance sales. Proprietary & Confidential 9 Dover Monthly PGAM Report April 2007 - Final

OPERATIONS MANAGEMENT Monthly Operations Management Highlights: • Van Sant Unit 11 operated for 2.7 hrs, producing 85 MWh for sale into the PJM real time market. • There were no lost time accidents, OSHA reportable incidents or environmental Notice of Violations associated with the generation stations in April. • We completed the annual outage on Unit 11 on time and ahead of the anticipated scheduled. Prior to the outage, an off line water wash was performed on the compressor at VanSant. During the outage, we received our annual borescope inspection from Advanced Turbine Support, Inc., with no red flags showing up. • NAES and Pace conducted PJM Operator training during the month of April, and operators continue with monthly online PJM training in order to meet PJM training requirements and for further exam preparation. • The Employee-Plant Safety Committee conducted a lunch time cook out to commemorate two years of accident-free operation. Dover Mayor Steven Speed, Dover City Manager Tony DePrima and representatives of Pace Global, Fred James and Keith Mills were among the honored guests in attendance to acknowledge the two-year milestone. • The plant was notified by the DNREC Tank Management Branch that they had approved an alternate procedure for monitoring the McKee Run Fuel Oil Tank #1 and Oil Inventory until an Out-of-Service Tank inspection can be completed. The inspection must be completed no later than June 1, 2008. Proprietary & Confidential 10 Dover Monthly PGAM Report April 2007 - Final

Operations Summary Generation Unit performance for the month of April is provided below: Monthly Operations Summary – April 2007 McKee McKee McKee MRS VanSant Total Unit 1 Unit 2 Unit 3 Facility Unit 11 All Units Capacity MW 17 17 102 136 39 175 On Line Hours Hrs 0 0 0 0 2.7 2.7 Starts # 0 0 0 0 2 2 Gross Generation MWh 0 0 0 0 85.477 85.477 Net Generation MWh 0 0 0 0 85.048 85.048 Total Auxiliaries MWh 31.528 31.528 148.186 211.242 30.896 242.138 Auxiliaries purchased MWh 31.528 31.528 148.186 211.242 30.467 241.709 Fuel Gas Used MMBTU 0 0 0 0 1258.04 1258.04 Fuel Oil Used MMBTU 0 0 0 0 0 0 Fuel Oil Used Gallons 0 0 0 0 0 0 Total Fuel MMBTU 0 0 0 0 1258.04 1258.04 Net Heat Rate BTU/KWh NA NA NA NA 14792 14792 Unit Trips # 0 0 0 0 0 0 Capacity Factor % 0.0% 0.0% 0.0% 0.0% 0.30% 0.07% Availability Factor % 100% 100% 100% 100% 85.79% 96.45% eFOR % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% HW Boiler Gas Usage MMBTU 1,738.00 1,738.00 Pilot Gas Usage MMBTU 0 0 0 0 Unit Trips/Outages/Operations During the month, Unit 11 was operated for 2.7 hours on April 28 on dispatch by PJM. In addition, a compressor off-line water-wash was performed on the unit early in the month and just prior to its’ annual maintenance outage. In April, the Unit 11 Annual Outage was completed during which a borescope inspection was performed on the compressor. Preliminary feedback from the inspector as to the condition of the unit was very positive. Final results and an assessment of the unit is expected in early May. Other outage work included the calibration of instrument transmitters and gauges, inspection of the stack, inspection of electrical bus work, GE TIL work and preventative maintenance on all rotating electrical and mechanical equipment. Other Events We had several members of our staff attend a two day training session at the General Physics facility to gain the knowledge to set up the plant on the GPILearn on-line training system. Since their return to the plant, a course schedule has been set up and staff members will begin begun taking the on-line instruction courses in early May, 2007. The General Physics website based training will be utilized in several plant programs including the Operational Readiness Plan and the Employee Development and Qualification Program (EDQP) as well as meeting annual OSHA training requirements. Proprietary & Confidential 11 Dover Monthly PGAM Report April 2007 - Final

After months of discussion and providing information to the DNREC Tank Management Branch, they have approved an alternate procedure to be followed until an Out-of-Service Inspection can be completed on the McKee Run Fuel Oil Tank #1. Under the alternate procedure, the plant will need to supply DNREC with visual inspection documentation and oil tank inventory information on a monthly basis until the Out-of-Service Inspection is completed. We have been mandated by DNREC to have this inspection completed no later than June 1, 2008. A meeting with the DNREC Air Quality Management Branch was held to discuss the Delaware Regulation 1146 Compliance Plan presented by the City of Dover for Unit 3 in March. DNREC had evaluated the options and this meeting was an opportunity to discuss their evaluation with the City of Dover representatives. Based on these discussions, a compliance plan continues to be developed further by the City of Dover with input from NAES and Pace Global personnel. In our efforts to continuously improve, we continue to investigate installation of Automatic Generation Control (AGC) on Unit 3 and on Unit 11. This improvement, if achievable, would provide an even greater value to these units during periods of operation. Also included in the improvement effort, we have been actively been working with Pace Global to develop competitive bidding strategies in the PJM market that could provide more operating opportunities for all our units, thereby increasing electric generation revenue. Some of these strategies have been implemented since our initial discussions and we expect to see positive results from these in the near future. The final version of the XL Insurance Report was provided to the plant in April with several recommendations. Some of these findings have already been addressed and other findings are being researched to determine best methodology of completing the tasks. The insurance inspectors were very impressed with the condition of the plant and have provided additional information and recommendations in the timing of major inspections on the McKee Run steam turbines. The Employee-led Plant Safety Committee and the Maintenance Staff were recipients of a fantastic breakfast prepared by Phil Marvel, Plant Electrician and Dean Blaha, Plant Manager. The breakfast was offered up in the Plant’s 2006 United Way Silent Auction by Phil (2006 Plant United Way Chairman) and Dean as a way to raise funds for the Plant’s United Way Campaign. The breakfasts were purchased by Paul Greenage, Maintenance Supervisor and Ken Beard, O & M Manager who then invited the teams to be their guests for the feast. Plant staff continues to support the United Way and its’ mission and is currently planning for the coming campaign year. Leading Edge Turbine Technologies (LETT) has received the fuel nozzles for inspection, flow testing and repairs. The repairs should take four to eight weeks and once the nozzles are returned, they will be placed into the plant inventory as a spare set. We have asked for an analysis from LETT to help us determine the exact cause of the damage to the fuel nozzles. We have yet to receive this analysis. Proprietary & Confidential 12 Dover Monthly PGAM Report April 2007 - Final

Generation Unit performance for the fiscal year 2006-07 to date is provided below: Fiscal Year to Date 7/1/06-6/30/07 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 184.134 190.018 441.026 815.178 115.054 930.232 Starts # 6 5 23 34 37 71 Gross Generation MWh 1,499.154 1,580.808 22,198.381 25,278,343 3,643.055 28,921.398 Net Generation MWh 1,406.823 1,482.405 20,259.787 23,149.015 3,621.138 26,770.153 Total Auxiliaries MWh 420.312 426.384 3,992.299 4,838.995 318.787 5,202.369 Auxiliaries purchased MWh 327.981 327.981 2,053.705 2,709.667 296.870 3,051.124 Fuel Gas Used MMBTU 13,478.64 17,386.555 153,605.208 184,470.403# 43,362.033 227,832.437# Fuel Oil Used MMBTU 8,547.961 3,177.772 88,658.168 100,383.902 5,246.186 105,630.089 Fuel Oil Used Gallons 57,177 21,256 590,982 669,415 37,933 707,348 Total Fuel MMBTU 22,026.601 20,564.327 242,263.377 284,854.306# 48,608.22 333,462.526# Net Heat Rate BTU/KWh 15,657 13,872 11,958 12,305 13,423 12,457 Unit Trips # 4 1 1 6 9 15 Capacity Factor % 1.13% 1.20% 2.72% 2.33% 1.27% 2.10% Availability Factor % 97.96% 98.60% 98.12% 98.23% 97.85% 98.13% eFOR % 0.96% 3.00% 0.47% 0.85% 0.0% 0.66% HW Boiler Gas Usage MMBTU 18,058.224 18,058.224 Pilot Gas Usage MMBTU 526,200 822,562 1,348.762 1,348.762 # Note: Does not include HWB or Pilot Gas. Fuel usage numbers are taken from fuel flow instruments Environmental, Health and Safety During the month of April, there were no employee or contractor related injuries or illnesses. As a follow up to the emergency evacuation drill held at the McKee Run facility during the month of March, we have purchased status boards for employees and visitors to help us identify all individuals on site at all times. The boards have magnetic buttons to indicate whether or not employees are IN or OUT of the building. All employees should be trained in the use of the new attendance system and the boards should be in full use by May 12, 2007. The Employee-Plant Safety Committee conducted a lunch time cook out to commemorate two years of accident-free operation. Dover Mayor Steven Speed, Dover City Manager Tony DePrima and representatives of Pace Global, Fred James and Keith Mills were among the honored guests in attendance to acknowledge the two-year milestone. The plant was notified by the DNREC Tank Management Branch that they had approved an alternate procedure for monitoring the McKee Run Fuel Oil Tank #1 and Oil Inventory until an Out-of-Service Tank inspection can be completed. The inspection must be completed no later than June 1, 2008. The DNREC Tank Management Branch has requested monthly data collection and submission of the data to the department until the inspection has been completed. The plant will compile this information and send to DNREC at the end of each month in order to honor their request Quarterly EDR’s (Electronic Data Reports) were filed for McKee Run Unit 3 and VanSant Unit 11. The audit feedback from the EPA and the Clean Air Market Division MDC check (Monitoring Plan Data Checking Software) stated that no errors were found. Proprietary & Confidential 13 Dover Monthly PGAM Report April 2007 - Final

There were no Notice of Violations, Environmental excursions or Near Miss reports during the month of April. Operations Financial Summaries Operating Costs for the month of April were $312,115 against a budget of $443,106. A favorable variance in personnel, administrative, EH&S, maintenance and operations contributed to this variance. Power Year to Date variances are favorable by $916,293, based on actual costs of $3,770,935 against a budget of $4,687,228. Summaries for the month and year to date are as follows. Financial – Current Month Month – April 2007 Actual Budget Variance Personnel 223,573 245,115 21,542 Administrative 32,190 98,019 65,829 EH & S 894 2,500 1,606 Maintenance Expense 41,988 60,550 18,562 Operations Expense 13,470 36,922 23,452 Total $312,115 $443,106 $130,991 Financial – Fiscal Year to Date Number of Months - 10 Actual Budget Variance Personnel 2,408,334 2,683,269 274,935 Administrative 760,845 864,674 103,829 EH & S 69,702 68,000 (1,702) Maintenance Expense 388,768 556,000 167,232 Operations Expense 143,286 515,285 371,999 Total $3,770,935 $4,687,228 $916,293 Analysis of Budget Variance For the month of April, NAES had a favorable variance of $130,991. The variance was due to the following: PERSONNEL EXPENSES – Favorable variance of $21,542 due to lower overtime and burdens due to low run time that accounted for the majority of the total variance. ADMINISTRATIVE EXPENSES - Favorable variance of $65,829 which was partially due to insurance premiums budgeted on a monthly basis were paid in a lump sum payment in August. Also, money budgeted in April for the fuel oil tank inspection (50K) was actually spent in January. ENVIRONMENTAL, HEALTH, AND SAFETY EXPENSES - Favorable variance of $1,606 due to a zero non-hazardous waste disposal expense and no water sampling invoices. MAINTENANCE EXPENSES- Favorable variance of $18,562 due to the City of Dover crediting a few of the major accounts for items that were previously charged out to these accounts but were actually inventory purchases. Expenses for some of the other maintenance accounts were lower due to minimal run time. Proprietary & Confidential 14 Dover Monthly PGAM Report April 2007 - Final

OPERATING EXPENSES – Favorable variance of $23,452 due primarily to not being billed for McKee Run auxiliary electric usage and for low water usage (limited operational run time). This has been corrected with the City Electric Department and we should expect to receive McKee Run electric bills in future months. Proprietary & Confidential 15 Dover Monthly PGAM Report April 2007 - Final

RISK MANAGEMENT PJM wholesale power prices continued to experience upward movement throughout the forward price periods since the last reporting period (ending 4/19/07). For example, the average forward on-peak price for the upcoming Power Year 2008/2009 increased by $2.00 per MWh, or 2.2 percent, while the average cost of service for the Power Year 2008/2009 increased by only $1.48 per MWh, or 1.7 percent, due to the mitigating effect of the City’s hedges. This upward movement is indicative of the persistent market volatility that the City’s risk management program is designed to manage. The City’s expected wholesale cost-of-service for 2007-08 and 2008-09, and to a lesser extent for 2009-10, is significantly insulated from such adverse price movements. Pace Global and the City have implemented several major components of a comprehensive hedging strategy for power year 2008-09 and beyond. At the April 19 ERMC meeting, the structure and objectives of the program were ratified; these consist thus far of integrated programmatic and discretionary hedging decision protocols designed to work together to ensure stable, predictable power prices for the City’s ratepayers for the next several power years. Pace Global anticipates that the program structure will be enhanced at the next ERMC meeting to include defensive hedging protocols. The first element of the programmatic hedging strategy targeting peak usage was implemented in two sets of purchases on April 24 and May 8. Proprietary & Confidential 16 Dover Monthly PGAM Report April 2007 - Final

2006 - 2007 Power Year Hedge Position As of May 10th, estimated power consumption for Power Year 2006-07 was hedged at 100 percent on peak and 101 percent off peak. Hedge volumes are based on the three year historical load profile of Dover at the Dover bus prior to any distribution losses to the retail meter. As shown in the table below, these hedge positions produce an estimated all-in wholesale price to Dover of $82.90 per MWh for the 2006-07 power year, inclusive of all Pace budgeted fees. Despite the acute PJM market price increase, Dover’s power cost is down $0.11 per MWh relative to last month as the hedge positions shielded the City and its customers, and due to a reduction in ancillary costs. The “Current Expected” price outcome remains below the budgeted figure of $85.24 per MWh (including Incentive Fees). The ten day value at risk (VaR) indicates that this value could increase to $83.87 per MWh, given a “worst case” possible adverse market movement in commodity and load following costs. That “At Market + Risk” result would still be $1.37 per MWh below budget. Forward Hedge % Power Year 2006-07 Date: 05/09/2007 Peak 100% Off Peak 101% At Market At Market + Risk* Energy Cost(including Load Following) $75.62 $76.59 Incentive Non-Energy Items LSE Capacity $0.01 $0.01 Load Following FRC Margin $0.00 $0.00 $0.01 $0.01 Pass-Through Items Transmission $2.25 $2.25 Ancillary $1.02 $1.02 Losses $0.00 $0.00 $3.27 $3.27 Add Pace Fees $2.76 $2.76 Total Cost $81.66 $82.63 Add Incentive $1.24 $1.24 Current Expected $82.90 $83.87 * Includes estimate of 10-Day VaR & Load Following Risk. Includes actuals through April and projections through June. * Includes Paceestimate of 10-Day Incentive VaR & LFbudgeted Fee represents Risk amount. Includes actual through March 2007 Proprietary & Confidential 17 Dover Monthly PGAM Report April 2007 - Final

2006 – 2007 Month-by-Month Hedge Transactions Off-Peak Power, Dover Zone 5/9/2007 On-Peak Power, Dover Zone 5/9/2007 Hedge Hedge Total Fixed Total Fixed Period Ratio Period Ratio 06-07 Volume Volume 06-07 Volume Volume (MWh) (MWh) (MWh) (MWh) Jul-06 39,472 42,400 107% Jul-06 39,074 41,600 106% Aug-06 34,547 37,600 109% Aug-06 45,943 47,840 104% Sep-06 33,474 30,000 90% Sep-06 35,575 32,000 90% Oct-06 27,712 29,400 106% Oct-06 32,603 33,440 103% Nov-06 26,939 28,800 107% Nov-06 30,030 31,920 106% Dec-06 32,041 31,800 99% Dec-06 28,816 30,400 105% Jan-07 31,518 29,400 93% Jan-07 34,476 33,440 97% Feb-07 27,267 26,400 97% Feb-07 30,279 30,400 100% Mar-07 28,399 29,400 104% Mar-07 31,984 33,440 105% Apr-07 26,122 28,800 110% Apr-07 29,624 31,920 108% May-07 29,005 29,400 101% May-07 34,663 33,440 96% Jun-07 32,038 28,800 90% Jun-07 38,389 31,920 83% Total 368,534 372,200 101% Total 411,456 411,760 100% Proprietary & Confidential 18 Dover Monthly PGAM Report April 2007 - Final

2007 - 2008 Power Year Hedge Position For power year 2007-2008, the estimated power consumption is hedged 91 percent on peak and 80 percent off peak. Hedge volumes are based on the three year historical load profile at the Dover bus prior to any distribution losses to the retail meter. As shown in the table immediately following, the all in price to Dover at these hedge levels is estimated at $85.36/MWh, inclusive of all incentive fees. The $84.12 cost of service has changed by $0.10 per MWh versus the last report, as the 91 percent on peak hedge position lowered the volatility and protected the City from the recent $1.18/MWh movement in PJM forward market prices for this period. The 10 day value at risk (inclusive of potential adverse market movements in commodity and load following) could increase this target number to $86.26/MWh. Forward Hedge % Power Year 2007-08 Date: 05/09/2007 Peak 91% Off Peak 80% At Market At Market + Risk* Energy Cost(including Load Following) $77.03 $79.17 Incentive Non-Energy Items LSE Capacity $0.01 $0.01 Load Following FRC Margin $0.00 $0.00 $0.01 $0.01 Pass-Through Items Transmission $2.24 $2.24 Ancillary $2.00 $2.00 Losses $0.00 $0.00 $4.24 $4.24 Add Pace Fees $2.84 $2.84 Total Cost $84.12 $86.26 Add Incentive $1.24 $1.24 Current Expected $85.36 $87.50 * Includes estimate of 10-Day VaR & LF Risk Proprietary & Confidential 19 Dover Monthly PGAM Report April 2007 - Final

2007 – 2008 Month-by-Month Hedge Transactions Off-Peak Power, Dover Zone 5/9/2007 On-Peak Power, Dover Zone 5/9/2007 Hedge Hedge Total Fixed Total Fixed Period Ratio Period Ratio 07-08 Volume Volume 07-08 Volume Volume (MWh) (MWh) (MWh) (MWh) Jul-07 39,867 30,600 77% Jul-07 39,464 40,320 102% Aug-07 34,892 28,200 81% Aug-07 46,402 44,160 95% Sep-07 33,809 29,120 86% Sep-07 35,930 33,440 93% Oct-07 27,989 22,560 81% Oct-07 32,929 31,280 95% Nov-07 27,208 23,040 85% Nov-07 30,330 28,560 94% Dec-07 32,362 25,440 79% Dec-07 29,105 27,200 93% Jan-08 31,834 25,480 80% Jan-08 34,821 29,920 86% Feb-08 27,539 23,400 85% Feb-08 30,582 28,560 93% Mar-08 28,683 22,440 78% Mar-08 32,303 23,520 73% Apr-08 26,383 20,240 77% Apr-08 29,920 24,640 82% May-08 29,295 24,480 84% May-08 35,010 28,560 82% Jun-08 32,358 23,040 71% Jun-08 38,773 36,960 95% Total 372,219 298,040 80% Total 415,569 377,120 91% Proprietary & Confidential 20 Dover Monthly PGAM Report April 2007 - Final

2008 - 2009 Power Year Hedge Position For power year 2008-2009, the estimated power consumption is hedged 38 percent on peak and 19 percent off peak. Hedge volumes are based on the three-year historical load profile at the Dover bus prior to any distribution losses to the retail meter. As shown below, these hedge levels combined with current market projections produce a cost of service to Dover estimated at $85.53 per MWh before any incentive fee. The $85.53 is $1.48 per MWh above the 2008-09 projected cost of $84.05 in our last report. This increase results from significant upward PJM price movements since the last report period (ending April 19). The 10 day value-at-risk (inclusive of potential adverse market movements in commodity and load following cost) could increase this target number to $89.72 per MWh. Forward Hedge % Power Year 2008-09 Date: 05/09/2007 Peak 38% Off Peak 19% At Market At Market + Risk* Energy Cost(including Load Following) $78.39 $82.58 Incentive Non-Energy Items LSE Capacity $0.01 $0.01 Load Following FRC Margin $0.00 $0.00 $0.01 $0.01 Pass-Through Items Transmission $2.24 $2.24 Ancillary $2.00 $2.00 Losses $0.00 $0.00 $4.24 $4.24 Add Pace Fees $2.89 $2.89 Total Cost $85.53 $89.72 Add Incentive $0.00 $0.00 Current Expected $85.53 $89.72 * Includes estimate of 10-Day VaR & LF Risk Proprietary & Confidential 21 Dover Monthly PGAM Report April 2007 - Final

2008 – 2009 Month-by-Month Hedge Transactions Off-Peak Power, Dover Zone 5/9/2007 On-Peak Power, Dover Zone 5/9/2007 Hedge Hedge Total Fixed Total Fixed Period Ratio Period Ratio 08-09 Volume Volume 08-09 Volume Volume (MWh) (MWh) (MWh) (MWh) Jul-08 41,040 5,880 14% Jul-08 44,682 14,080 32% Aug-08 38,008 6,120 16% Aug-08 45,769 13,440 29% Sep-08 32,600 5,760 18% Sep-08 38,039 13,440 35% Oct-08 29,103 5,640 19% Oct-08 32,956 14,720 45% Nov-08 28,405 6,240 22% Nov-08 29,784 12,160 41% Dec-08 29,366 5,880 20% Dec-08 32,911 14,080 43% Jan-09 32,116 6,120 19% Jan-09 33,286 13,440 40% Feb-09 28,262 5,280 19% Feb-09 30,349 12,800 42% Mar-09 27,490 5,880 21% Mar-09 33,493 14,080 42% Apr-09 26,124 5,520 21% Apr-09 29,350 14,080 48% May-09 30,003 6,360 21% May-09 32,505 12,800 39% Jun-09 31,735 5,520 17% Jun-09 41,945 14,080 34% Total 374,252 70,200 19% Total 425,069 163,200 38% Proprietary & Confidential 22 Dover Monthly PGAM Report April 2007 - Final

2009 - 2010 Power Year Hedge Position For power year 2009-2010, the estimated power consumption was hedged 14 percent on peak and 19 percent off peak. Hedge volumes are based on the three year historical load profile at the Dover bus prior to any distribution losses to the retail meter. As shown below, these hedge levels combined with current market projections produce a cost of service to Dover estimated at $83.96 per MWh before any incentive fee. The $83.96 is $2.37 per MWh above the 2009-2010 projected cost of $81.59 in our last report. This increase results from significant upward PJM price movement since the last report period (ending April 19). The 10 day value-at-risk (inclusive of potential adverse market movements in commodity and load following cost) could increase this target number to $88.01 per MWh. Forward Hedge % Power Year 2009-10 Date: 05/09/2007 Peak 14% Off Peak 19% At Market At Market + Risk* Energy Cost(including Load Following) $76.74 $80.79 Incentive Non-Energy Items LSE Capacity $0.01 $0.01 Load Following FRC Margin $0.00 $0.00 $0.01 $0.01 Pass-Through Items Transmission $2.24 $2.24 Ancillary $2.00 $2.00 Losses $0.00 $0.00 $4.24 $4.24 Add Pace Fees $2.97 $2.97 Total Cost $83.96 $88.01 Add Incentive $0.00 $0.00 Current Expected $83.96 $88.01 * Includes estimate of 10-Day VaR & LF Risk Proprietary & Confidential 23 Dover Monthly PGAM Report April 2007 - Final

2009 – 2010 Month-by-Month Hedge Transactions Off-Peak Power, Dover Zone 5/9/2007 On-Peak Power, Dover Zone 5/9/2007 Hedge Hedge Total Fixed Total Fixed Period Ratio Period Ratio 09-10 Volume Volume 09-10 Volume Volume (MWh) (MWh) (MWh) (MWh) Jul-09 41,040 5,640 14% Jul-09 44,682 5,520 12% Aug-09 38,008 6,120 16% Aug-09 45,769 5,040 11% Sep-09 32,600 5,760 18% Sep-09 38,039 5,040 13% Oct-09 29,103 5,880 20% Oct-09 32,956 5,280 16% Nov-09 28,405 6,000 21% Nov-09 29,784 4,800 16% Dec-09 29,366 5,880 20% Dec-09 32,911 5,280 16% Jan-10 32,116 6,360 20% Jan-10 33,286 4,800 14% Feb-10 28,262 5,280 19% Feb-10 30,349 4,800 16% Mar-10 27,490 5,640 21% Mar-10 33,493 5,520 16% Apr-10 26,124 5,520 21% Apr-10 29,350 5,280 18% May-10 30,003 6,360 21% May-10 32,505 4,800 15% Jun-10 31,735 5,520 17% Jun-10 41,945 5,280 13% Total 374,252 69,960 19% Total 425,069 61,440 14% Proprietary & Confidential 24 Dover Monthly PGAM Report April 2007 - Final

Credit and Counterparty Position In order to manage its risk profile, Pace Global continues to monitor the ‘in the money’ or ‘out of the money’ positions with each of the counterparties with which Dover has conducted transactions. Below are summaries of the counterparties trading with Dover, their corresponding credit position, term, volumes and pricing. Proprietary & Confidential 25 Dover Monthly PGAM Report April 2007 - Final

APPENDIX 1 POWER PURCHASES – HEDGE TRANSACTION DETAILS Power Year 2006/07 Hedged ID Counterparty Timeblock Quality Trade Date Buy/Sell Start Date End Date Volume Allocation Price 2 BP Energy On Peak 5x16 Firm 6/22/2006 Buy 7/1/2006 6/30/2007 25 MW per hour $90.25 7 BP Energy Off Peak 5x8+2x24 Firm 6/22/2006 Buy 7/1/2006 6/30/2007 25 MW per hour $57.70 1 Connectiv On Peak 5x16 Firm 6/22/2006 Buy 7/1/2006 9/30/2006 25 MW per hour $95.00 6 Connectiv Off Peak 5x8+2x24 Firm 6/22/2006 Buy 7/1/2006 9/30/2006 25 MW per hour $56.00 3 Constellation On Peak 5x16 Firm 6/27/2006 Buy 7/1/2006 6/30/2007 50 MW per hour $88.50 4 Constellation On Peak 5x16 Firm 6/27/2006 Buy 7/1/2006 8/31/2006 30 MW per hour $90.50 8 Constellation Off Peak 5x8+2x24 Firm 6/27/2006 Buy 7/1/2006 6/30/2007 25 MW per hour $57.75 9 Constellation Off Peak 5x8+2x24 Firm 6/27/2006 Buy 7/1/2006 8/31/2006 25 MW per hour $56.65 5 WPS On Peak 5x16 Firm 7/12/2006 Buy 10/1/2006 6/30/2007 20 MW per hour $84.71 10 WPS Off Peak 5x8+2x24 Firm 7/12/2006 Buy 10/1/2006 6/30/2007 25 MW per hour $56.65 Power Year 2007/08 Hedged ID Counterparty Timeblock Quality Trade Date Buy/Sell Start Date End Date Volume Allocation Price 16 Conectiv On Peak 5x16 Firm 10/18/2006 Buy 7/1/2007 8/31/2007 20 MW per hour $112.75 17 Conectiv Off Peak 5x8+2x24 Firm 10/18/2006 Buy 7/1/2007 8/31/2007 15 MW per hour $63.25 18 Conectiv On Peak 5x16 Firm 10/19/2006 Buy 1/1/2008 2/29/2008 40 MW per hour $100.50 19 Conectiv Off Peak 5x8+2x24 Firm 10/19/2006 Buy 1/1/2008 2/29/2008 30 MW per hour $65.25 11 Sempra Energy Trading On Peak 5x16 Firm 10/13/2006 Buy 7/1/2007 9/30/2007 35 MW per hour $72.65 12 Sempra Energy Trading On Peak 5x16 Firm 10/13/2006 Buy 10/1/2007 11/30/2007 20 MW per hour $72.65 13 Sempra Energy Trading Off Peak 5x8+2x24 Firm 10/13/2006 Buy 7/1/2007 11/30/2007 25 MW per hour $72.65 14 Sempra Energy Trading On Peak 5x16 Firm 10/16/2006 Buy 7/1/2007 6/30/2008 30 MW per hour $75.65 15 Sempra Energy Trading Off Peak 5x8+2x24 Firm 10/16/2006 Buy 7/1/2007 6/30/2008 20 MW per hour $75.65 20 Sempra Energy Trading Off Peak 5x8+2x24 Firm 10/20/2006 Buy 9/1/2007 9/30/2007 10 MW per hour $46.15 21 Sempra Energy Trading On Peak 5x16 Firm 10/20/2006 Buy 12/1/2007 12/31/2007 20 MW per hour $69.95 22 Sempra Energy Trading Off Peak 5x8+2x24 Firm 10/20/2006 Buy 12/1/2007 12/31/2007 25 MW per hour $69.95 23 Sempra Energy Trading On Peak 5x16 Firm 10/20/2006 Buy 3/1/2008 3/31/2008 10 MW per hour $70.10 24 Sempra Energy Trading Off Peak 5x8+2x24 Firm 10/20/2006 Buy 3/1/2008 3/31/2008 20 MW per hour $70.10 25 Sempra Energy Trading On Peak 5x16 Firm 10/20/2006 Buy 4/1/2008 4/30/2008 10 MW per hour $58.35 26 Sempra Energy Trading Off Peak 5x8+2x24 Firm 10/20/2006 Buy 4/1/2008 4/30/2008 20 MW per hour $58.35 Proprietary & Confidential 26 Dover Monthly PGAM Report April 2007 - Final

Power Year 2007/08 Hedged ID Counterparty Timeblock Quality Trade Date Buy/Sell Start Date End Date Volume Allocation Price 34 Sempra Energy Trading On Peak 5x16 Firm 10/31/2006 Buy 7/1/2007 12/31/2007 10 MW per hour $85.40 47 Sempra Energy Trading On Peak 5x16 Firm 12/27/2007 Buy 3/1/2008 4/30/2008 25 MW per hour $76.35 48 Sempra Energy Trading On Peak 5x16 Firm 12/27/2007 Buy 5/1/2008 5/31/2008 50 MW per hour $71.35 49 Sempra Energy Trading On Peak 5x16 Firm 12/27/2006 Buy 6/1/2008 6/30/2008 75 MW per hour $85.75 50 Sempra Energy Trading Off Peak 5x8+2x24 Firm 12/27/2006 Buy 5/1/2008 6/30/2008 25 MW per hour $44.50 51 Sempra Energy Trading Off Peak 5x8+2x24 Firm 12/27/2006 Buy 7/1/2007 6/30/2008 5 MW per hour $66.30 52 Sempra Energy Trading On Peak 5x16 Firm 12/27/2006 Buy 7/1/2007 6/30/2008 5 MW per hour $66.30 27 WPS On Peak 5x16 Firm 10/25/2006 Buy 12/1/2007 12/31/2007 20 MW per hour $85.50 28 WPS On Peak 5x16 Firm 10/25/2006 Buy 1/1/2008 2/29/2008 10 MW per hour $101.00 29 WPS On Peak 5x16 Firm 10/26/2006 Buy 7/1/2007 8/31/2007 20 MW per hour $112.00 30 WPS On Peak 5x16 Firm 10/26/2006 Buy 9/1/2007 9/30/2007 30 MW per hour $77.00 32 WPS On Peak 5x16 Firm 10/27/2006 Buy 10/1/2007 11/30/2007 20 MW per hour $75.00 33 WPS Off Peak 5x8+2x24 Firm 10/27/2006 Buy 7/1/2007 6/30/2008 10 MW per hour $53.30 Power Year 2008/09 Hedged ID Counterparty Timeblock Quality Trade Date Buy/Sell Start Date End Date Volume Allocation Price 53 Sempra Energy Trading On Peak 5x16 Firm 1/4/2007 Buy 7/1/2008 6/30/2009 15 MW per hour $69.05 54 Sempra Energy Trading Off Peak 5x8+2x24 Firm 1/4/2007 Buy 7/1/2008 6/30/2009 15 MW per hour $69.05 57 WPS On Peak 5x16 Firm 4/24/2007 Buy 7/1/2008 12/31/2008 25 MW per hour $94.32 Power Year 2009/10 Hedged ID Counterparty Timeblock Quality Trade Date Buy/Sell Start Date End Date Volume Allocation Price 55 Sempra Energy Trading On Peak 5x16 Firm 1/4/2007 Buy 7/1/2009 6/30/2010 15 MW per hour $68.35 56 Sempra Energy Trading Off Peak 5x8+2x24 Firm 1/4/2007 Buy 7/1/2009 6/30/2010 15 MW per hour $68.35 Proprietary & Confidential 27 Dover Monthly PGAM Report April 2007 - Final

APPENDIX 2 PJM INVOICE BREAKDOWN The PJM bill is a record of all Electricity Transactions, Transmission Services, Ancillary Services and Miscellaneous fees that allow the PJM to operate. Below is a list of the line items on the PJM bill including all generator activity. PJM Line Item Load Gen Net Balancing Energy (86,824.77) 5,300.85 (81,523.92) Day Ahead Energy 348,221.73 0.00 348,221.73 Regulation Charges (33,155.17) 0.00 (33,155.17) Synchronized Reserve Charges (18,281.55) 0.00 (18,281.55) Balancing Operating Reserves Charges (3,591.63) 0.00 (3,591.63) Day Ahead Operating Reserves Charges (4,949.16) 0.00 (4,949.16) Balancing Operating Reserves Credits 0.00 6,522.07 6,522.07 Synchronous Condensing Charges (1,237.69) 0.00 (1,237.69) Real-time Economic Load Response Program Charges (4,200.75) 0.00 (4,200.75) Black Start Service Credits 0.00 4,977.77 4,977.77 North American Electric Reliability Corporation (NERC) Charge (258.30) 0.00 (258.30) Reliability First Corporation (RFC) Charges (561.52) 0.00 (561.52) Reactive Supply and Voltage Control from Generation Sources Service Charges (22,299.07) 0.00 (22,299.07) PJM Scheduling System Control and Dispatch Service Charges (15,860.25) 0.00 (15,860.25) Transmission Owner Scheduling System Control and Dispatch Service Charges (4,172.09) 0.00 (4,172.09) Black Start Service Charges (1,119.61) 0.00 (1,119.61) Network Integration Transmission Service Charges (140,943.30) 0.00 (140,943.30) Expansion Cost Recovery Charges (415.29) 0.00 (415.29) Non-Firm Point-to-Point Transmission Service Credits 1,066.61 0.00 1,066.61 Auction Revenue Rights Credits 67,662.90 0.00 67,662.90 Transmission Losses (Point-to-Point) Credits 3,674.61 0.00 3,674.61 PPA's (5,385.72) 0.00 (5,385.72) 77,369.98 16,800.69 94,170.67 Due to the Settlement of Transmission Rate Case ER05-515: Pepco/ Dpl the City is entitled to an estimated refund of $512,640 to be spread over 12 months beginning in June -06. The credit comes through on the PJM bill as a reduction in the rate charged by DPL for Network transmission service. DPL Total Refund ($12,021,624) DPL System Peak Load 4,174 mw Per Mw Refund ($2880.12) Dover Peak Load 174.25 mw Dover Estimated Refund ($501,860.91) Proprietary & Confidential 28 Dover Monthly PGAM Report April 2007 - Final

APPENDIX 3 NORTH AMERICAN ENERGY SERVICES - APRIL 2007 MONTHLY REPORT Proprietary & Confidential 29 Dover Monthly PGAM Report April 2007 - Final

North American Energy Services Dover, DE April 2007 Monthly Report Two Years Accident Free April 5, 2007 1 of 16

Table of Contents 1.0 Executive Summary 2.0 Environmental Health and Safety 3.0 Financial 4.0 Operations 5.0 Maintenance 6.0 Engineering 7.0 Summary of NAES Performance 2 of 16

1.0 Executive Summary Calendar of Events Date Two Year Accident Free Target April 5, 2007 RCRA & DOT Training April 10, 2007 GPiLearn Training April 11 – 12, 2007 Unit 11 Annual Outage April 16 – 29, 2007 Toxic Release Inventory (TRI) Due June 1, 2007 McKee Run – Delaware Regulation 1146 July 1, 2007 Compliance Plan Due to DNREC Unit 1 Annual Outage October 8 - 15, 2007 Unit 2 Annual Outage October 15 - 22, 2007 McKee Run Fuel Oil Tank #1 Out-of-Service June 1, 2008 Inspection Due Date Three Year Accident Free Target April 5, 2008 Environmental, Health, and Safety Month Fiscal Year to Date (April 2007) 7/1/06-6/30/07 NOVs 0 0 Opacity Deviations 0 36 Environmental Deviations 0 0 OSHA Recordable 0 0 OSHA LTA's 0 0 Operations Month Fiscal Year to Date (April 2007) 7/1/06-6/30/07 Net Station Output (MWH) – Note 1 85.048 26,770.153 Period Hours 2880 29,184 On line Hours 2.7 930.232 Planned Outage Hours 102.334 382.068 Maintenance Outage Hours 0 54.667 Forced Outage Hours 0 108.575 Reserve Shutdown Hours 2,774.966 27,708.238 Equivalent Forced Outage Hours 0 214.57 Station Availability - Note 2 96.45% 98.13% Note 1 – Net Station Output does not include station auxiliaries when units are off line. Note 2 – Availability is calculated using service hours + reserve shutdown hrs divided by hours in period. 3 of 16

Gross Generation vs. Forecast (Revised 12/1/2006) 16000 Total Gross Generation (MWh) 14000 12000 10000 8000 6000 4000 2000 0 July Aug Sep Oct Nov Dec Jan Feb Mar Apr May June Month Actual Gross Generation (MWh) Gross Generation Forecast (MWh) 4 of 16

2.0 Environmental, Health and Safety During the month of April, there were no employee or contractor related injuries or illnesses. As a follow up to the emergency evacuation drill held at the McKee Run facility during the month of March, we have purchased status boards for employees and visitors to help us identify all individuals on site at all times. The boards have magnetic buttons to indicate whether or not employees are IN or OUT of the building. All employees should be trained in the use of the new attendance system and the boards should be in full use by May 12, 2007. The Employee-Plant Safety Committee conducted a lunch time cook out to commemorate two years of accident-free operation. Dover Mayor Steven Speed, Dover City Manager Tony DePrima and representatives of Pace Global, Fred James and Keith Mills were among the honored guests in attendance to acknowledge the two-year milestone. The plant was notified by the DNREC Tank Management Branch that they had approved an alternate procedure for monitoring the McKee Run Fuel Oil Tank #1 and Oil Inventory until an Out-of-Service Tank inspection can be completed. The inspection must be completed no later than June 1, 2008. The DNREC Tank Management Branch has requested monthly data collection and submission of the data to the department until the inspection has been completed. The plant will compile this information and send to DNREC at the end of each month in order to honor their request Quarterly EDR’s (Electronic Data Reports) were filed for McKee Run Unit 3 and VanSant Unit 11. The audit feedback from the EPA and the Clean Air Market Division MDC check (Monitoring Plan Data Checking Software) stated that no errors were found. There were no Notice of Violations, Environmental excursions or Near Miss reports during the month of April. Safety Statistics Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun FYTD Hours 5,389.5 5,697.75 5129.5 5,454 5,101.5 5,089.5 5,506 4,705 5,605 5,100 52,777.75 Worked First Aid 0 0 0 0 0 0 0 0 0 0 0 cases OSHA 0 0 0 0 0 0 0 0 0 0 0 Recordable Lost Time 0 0 0 0 0 0 0 0 0 0 0 Accidents Restricted Workday 0 0 0 0 0 0 0 0 0 0 0 Accident Near Miss 0 1 0 0 0 0 0 0 2 0 3 Date last OSHA Recordable 4/05/05 Date last Lost Time Accident 4/05/05 Days since last OSHA recordable 755 Days since last Lost Time Accident 755 5 of 16

Emissions (NOx & SO2) All data thru 4/30/07 NOx Summary - Year (May-Sept.)Tons Year Unit #1 Unit #2 Unit #3 Unit #11 TOTAL 2002 17.34 14.38 175.76 6.01 213.49 2003 9.34 7.84 127.36 2.45 146.99 2004 3.38 2.74 98.76 7.55 112.43 2005 20.16 20.64 103.3 2.19 146.29 2006 1.82 1.78 19.25 1.72 24.57 2007 0 0 0 0 0 NOx Allowances Summary NOx NOx NOx Allowances Available Total NOx NOx Allowance Allowances (Per Facility, Prior to Sale) Tons Emitted Allowance Vintage Sold YTD McKee Run VanSant (NOx Season) Balance 2007 0 191 7 0 198 2008 0 191 7 0 198 2009 0 191 7 0 198 Note: NOx Season is May 1 to September 30. SO2 Summary - Year (Jan.-Dec.)Tons Year Unit #1 Unit #2 Unit #3 Unit #11 TOTAL 2002 23.43 24.93 696.91 6.38 751.65 2003 22.77 18.89 490.14 2.35 534.15 2004 10.96 9.64 489.44 1.45 490.89 2005 49.91 52.08 530.24 2.30 634.69 2006 3.69 1.51 50.7 0.40 56.30 2007 0 0 10.48 0.16 10.64 SO2 Allowances Summary SO2 Allowances SO2 Available Total SO2 SO2 Allowances (Per Unit, Prior to Tons Allowances SO2 Allowance Sold - YTD Sale & Emitted – Balance Vintage Reconciliation) U3 and U11 Unit #3 Unit #11 YTD 2006 2673 2586 139 52 0 2007 327 2585 138 11 2385 2008 0 2585 138 0 2723 2009 0 2585 138 0 2723 6 of 16

2.1 Training Final arrangements have been made with General Physics, to utilize their web-based training programs for the Dover facility. The training courses would include topics that satisfy OSHA compliance and provide general knowledge to site personnel related to power plant operations, mechanical, electrical, instrumentation & control maintenance, water treatment, heat rate and plant performance. Three Dover employees, Philip Kosek, EHS and Admin Manager, Ray Lavender, Operations Supervisor and Paul Greenage, Maintenance Supervisor, attended orientation training at the General Physics training Center on April 11 & 12, 2007. Program implementation will begin during the month of May for all NAES employees. 7 of 16

3.0 Financial Financial – Current Month Month – April 2007 Actual Budget Variance Personnel 223,573 245,115 21,542 Administrative 32,190 98,019 65,829 EH & S 894 2,500 1,606 Maintenance Expense 41,988 60,550 18,562 Operations Expense 13,470 36,922 23,452 Total $312,115 $443,106 $130,991 Financial – Fiscal Year to Date Number of Months - 10 Actual Budget Variance Personnel 2,408,334 2,683,269 274,935 Administrative 760,845 864,674 103,829 EH & S 69,702 68,000 (1,702) Maintenance Expense 388,768 556,000 167,232 Operations Expense 143,286 515,285 371,999 Total $3,770,935 $4,687,228 $916,293 3.1 Variance analysis For the month of April, we had a favorable variance of $130,991. The variance was due to the following: PERSONNEL EXPENSES – Favorable variance of $21,542 due to lower overtime and burdens due to low run time that accounted for the majority of the total variance. ADMINISTRATIVE EXPENSES - Favorable variance of $65,829 which was partially due to insurance premiums budgeted on a monthly basis were paid in a lump sum payment in August. Also, money budgeted in April for the fuel oil tank inspection (50K) was actually spent in January. ENVIRONMENTAL, HEALTH, AND SAFETY EXPENSES - Favorable variance of $1,606 due to a zero non-hazardous waste disposal expense and no water sampling invoices. MAINTENANCE EXPENSES- Favorable variance of $18,562 due to the City of Dover crediting a few of the major accounts for items that were previously charged out to these accounts but were actually inventory purchases. Our expenses for some of the other maintenance accounts was a lot lower due to minimal run time. OPERATING EXPENSES – Favorable variance of $23,452 due primarily to not being billed for McKee Run auxiliary electric usage and for low water usage (limited operational run time). This has been corrected with the City Electric Department and we should expect to McKee Run electric bills in future months. 8 of 16

4.0 Operations Month – April 2007 McKee McKee McKee MRS VanSant Total Unit 1 Unit 2 Unit 3 Facility Unit 11 All Units Capacity MW 17 17 102 136 39 175 On Line Hours Hrs 0 0 0 0 2.7 2.7 Starts # 0 0 0 0 2 2 Gross Generation MWh 0 0 0 0 85.477 85.477 Net Generation MWh 0 0 0 0 85.048 85.048 Total Auxiliaries MWh 31.528 31.528 148.186 211.242 30.896 242.138 Auxiliaries purchased MWh 31.528 31.528 148.186 211.242 30.467 241.709 Fuel Gas Used MMBTU 0 0 0 0 1258.04 1258.04 Fuel Oil Used MMBTU 0 0 0 0 0 0 Fuel Oil Used Gallons 0 0 0 0 0 0 Total Fuel MMBTU 0 0 0 0 1258.04 1258.04 Net Heat Rate BTU/KWh NA NA NA NA 14792 14792 Unit Trips # 0 0 0 0 0 0 Capacity Factor % 0.0% 0.0% 0.0% 0.0% 0.30% 0.07% Availability Factor % 100% 100% 100% 100% 85.79% 96.45% eFOR % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% HW Boiler Gas Usage MMBTU 1,738.00 1,738.00 Pilot Gas Usage MMBTU 0 0 0 0 # Note: Does not include HWB or Pilot Gas Fiscal Year to Date 7/1/06-6/30/07 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 184.134 190.018 441.026 815.178 115.054 930.232 Starts # 6 5 23 34 37 71 Gross Generation MWh 1,499.154 1,580.808 22,198.381 25,278,343 3,643.055 28,921.398 Net Generation MWh 1,406.823 1,482.405 20,259.787 23,149.015 3,621.138 26,770.153 Total Auxiliaries MWh 420.312 426.384 3,992.299 4,838.995 318.787 5,202.369 Auxiliaries purchased MWh 327.981 327.981 2,053.705 2,709.667 296.870 3,051.124 Fuel Gas Used MMBTU 13,478.64 17,386.555 153,605.208 184,470.403# 43,362.033 227,832.437# Fuel Oil Used MMBTU 8,547.961 3,177.772 88,658.168 100,383.902 5,246.186 105,630.089 Fuel Oil Used Gallons 57,177 21,256 590,982 669,415 37,933 707,348 Total Fuel MMBTU 22,026.601 20,564.327 242,263.377 284,854.306# 48,608.22 333,462.526# Net Heat Rate BTU/KWh 15,657 13,872 11,958 12,305 13,423 12,457 Unit Trips # 4 1 1 6 9 15 Capacity Factor % 1.13% 1.20% 2.72% 2.33% 1.27% 2.10% Availability Factor % 97.96% 98.60% 98.12% 98.23% 97.85% 98.13% eFOR % 0.96% 3.00% 0.47% 0.85% 0.0% 0.66% HW Boiler Gas Usage MMBTU 18,058.224 18,058.224 Pilot Gas Usage MMBTU 526,200 822,562 1,348.762 1,348.762 # Note: Does not include HWB or Pilot Gas. Fuel usage numbers are taken from fuel flow instruments 9 of 16

VanSant Lifetime through 4/30/07 Actual Starts Factored Starts Fired Hours VanSant 1153 1888.25 3,743.902 Since HGP - Dec 2004 105 220.55 348.999 Fuel Oil Inventory Monthly Monthly Fuel Monthly FY 06-07 Fuel FY 06-07 Inventory Inventory Purchases Inventory Inventory Purchases Inventory (Start) (End) (Month) (Change) (Start) (YTD) (Change) McKee Run 1,207,208 1,205,783 0 (1,425) 1,870,932 0 (665,149) (#6 Fuel Oil) VanSant 116,848 117,311 0 463 155,782 0 (38,471) (#2 Fuel Oil) Note: As measured by tank level instruments. Tank levels may change due to oil temperature. CapacityTesting Summer 2006-2007 (June 1- Aug 31) Winter 2006-2007 (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 1 17 17.3 2 17 17.4 2 17 17.45 3 102 102.68 3 102 105.18 VanSant 39 40.3 11 40 40.23 Total 175 177.38 Total 176 180.16 Unit 11 completed capacity test during the month of February 2007. Units 1, 2 & 3 completed capacity testing in December 2006. Historical Performance Month Generation* Gas* Oil* Availability Capacity Factor Starts (MWh) (MMBTU) (gal) 2006 2005 2006 2005 2006 2005 Jul 6,102.198 74,878.054 11,238 97.12 100 4.69 18.2 27 21 Aug 8,144.843 88,586.392 73,580 99.23 100 6.26 18.6 19 27 Sep 0 0 0 93.86 99.93 0 2.29 0 4 Oct 720.739 7,869.890 8,549 100 96.34 .55 0.33 3 2 Nov 4,068.753 44,645.125 44,671 98.10 100 3.21 0.19 9 2 Dec 5,917.68 5,649.197 453,077 100 100 4.52 17.69 4 9 2007 2006 2007 2006 2007 2006 Jan 285.314 4,156.404 0 100 100 0.22 0 1 1 Feb 569.496 584.278 58,515 100 98.87 0.63 0 3 6 Mar 697.498 205.052 57,718 96.54 90.99 0.53 .21 3 2 Apr 85.048 1,258.04 0 96.45 96.53 0.07 .01 2 6 May 100 .09 1 Jun 100 1.07 2 FYTD 24,954.323 227,832.437 707,348 98.13 98.55 2.10 4.99 71 83 * Note: Total Net Generation for all four units combined 10 of 16

4.1 Training During the month of April, Ray Lavender, Jeff Luff and Larry Sheranko, Operations Supervisors, attended an Ashland RCRA/DOT training course to provide additional knowledge in helping to keep our hazardous waste program up-to-date on current regulations and best practices. Operations Personnel continue with monthly online PJM training in order to meet PJM training requirements and for further exam preparation. Work is in the final stages of development of an Operational Readiness Plan which will provide a more structured training and skill set refresher regimen to all Operations and Maintenance Personnel. GPiLearning courses which we have recently brought on board will be utilized as part of this training program. 4.2 Personnel We continue to have an opening in the operations department due to an employee leaving the company in October 2006 to pursue other career opportunities. At the present time, plant management has decided to leave the position open and continues to actively adjust the operations teams’ work schedules to meet plant needs. 11 of 16

5.0 Maintenance During the month of April, the plant maintenance staff continued addressing our backlog of work orders, completed the annual outage inspections on Unit 11 and focused on keeping all units available to our client and PJM. Fifty-nine work orders were issued during the month, and fifty-eight work orders were completed during the month. The table below summarizes the monthly work order activities. Work Order Report April - 07 Outstanding From Outstanding Previous Issued This Completed at the end of Priority # Months Month This Month the month P1 0 2 2 0 P2 0 5 5 0 P3 1 9 9 1 P4 6 32 26 12 P5 7 2 5 0 P6 0 0 0 0 P7 5 2 2 5 P8 7 4 4 7 P9 2 2 0 4 P6 - 1 0 0 0 0 P6 - 2 0 0 0 0 P6 - 3 0 0 0 0 P6 – 4 3 1 4 0 P6 – 5 0 0 0 0 P6 – 6 0 0 0 0 P6 – 7 1 0 0 1 P6 - 8 0 0 0 0 PM 13 30 31 12 Totals 29 59 58 30 Note: PM's are included in the priority totals Notable activities during the month include: 1) We completed the annual outage on Unit 11 on time and ahead of the anticipated scheduled. Prior to the outage, an off line water wash was performed on the compressor at VanSant. During the outage, we received our annual borescope inspection from Advanced Turbine Support, Inc., with no red flags showing up. 2) During the outage at VanSant, we received our annual oil flow meter and transmitter calibration / certification and also removed, inspected and documented the condition of the main gas line orifice plate to comply with our Title V Operating Permit. 3) During the month, maintenance team members completed taking oil samples for our oil analysis program. 12 of 16

The following work orders remained open at the end of the month: Work Due Date Brief Description of Work Order Reason for Past Due Order # 5711 6/20/05 New control room CEMS view Computer has been dedicated as a replacement. OEM node and computer vendor cannot assist with configuration. Plant looking into alternative method of interface with main CEMS computer. 6614 3/15/07 Revise plant safety video Video is 90% complete. 6655 11/17/06 Steps for 001 Outfall Plan has been developed and are awaiting vendor visits and quotes 6731 12/14/06 Leaking regulator on B acid pump Waiting on parts, on order at VanSant 6999 4/20/07 Plant electric utility vehicle will Waiting on parts, on order not hold a charge 5.1 Training 1) During the month, Eric Carrow received training on the monthly PM of our sulfur determinator from Ray Wheatley. 2) Members of the flex team continued to receive training on gauge and instrument calibrations from the Plant Instrument Technicians, Rich Newman and Dave Pletsch. 3) By working with our maintenance staff during the month, flex team members continue to become more familiar with their duties and responsibilities. This cross training will be a benefit to the entire team, as it adds more flexibility to our skill sets. 13 of 16

6.0 Engineering Unit Trips/Outages/Operations During the month, Unit 11 was operated for 2.7 hours on April 28 on dispatch by PJM. In addition, a compressor off-line water-wash was performed on the unit early in the month and just prior to its’ annual maintenance outage. In April, the Unit 11 Annual Outage was completed during which a borescope inspection was performed on the compressor. Preliminary feedback from the inspector as to the condition of the unit was very positive. Final results and an assessment of the unit is expected in early May. Other outage work included the calibration of instrument transmitters and gauges, inspection of the stack, inspection of electrical bus work, GE TIL work and preventative maintenance on all rotating electrical and mechanical equipment. Other Events We had several members of our staff attend a two day training session at the General Physics facility to gain the knowledge to set up the plant on the GPILearn on-line training system. Since their return to the plant, a course schedule has been set up and staff members will begin begun taking the on-line instruction courses in early May, 2007. The General Physics website based training will be utilized in several plant programs including the Operational Readiness Plan and the Employee Development and Qualification Program (EDQP) as well as meeting annual OSHA training requirements. After months of discussion and providing information to the DNREC Tank Management Branch, they have approved an alternate procedure to be followed until an Out-of-Service Inspection can be completed on the McKee Run Fuel Oil Tank #1. Under the alternate procedure, the plant will need to supply DNREC with visual inspection documentation and oil tank inventory information on a monthly basis until the Out-of-Service Inspection is completed. We have been mandated by DNREC to have this inspection completed no later than June 1, 2008. A meeting with the DNREC Air Quality Management Branch was held to discuss the Delaware Regulation 1146 Compliance Plan presented by the City of Dover for Unit 3 in March. DNREC had evaluated the options and this meeting was an opportunity to discuss their evaluation with the City of Dover representatives. Based on these discussions, a compliance plan continues to be developed further by the City of Dover with input from NAES and Pace Global personnel. In our efforts to continuously improve, we continue to investigate installation of Automatic Generation Control (AGC) on Unit 3 and on Unit 11. This improvement, if achievable, would provide an even greater value to these units during periods of operation. Also included in the improvement effort, we have been actively been working with Pace Global to develop competitive bidding strategies in the PJM market that could provide more operating opportunities for all our units, thereby increasing electric generation revenue. Some of these strategies have been implemented since our initial discussions and we expect to see positive results from these in the near future. 14 of 16

The final version of the XL Insurance Report was provided to the plant in April with several recommendations. Some of these findings have already been addressed and other findings are being researched to determine best methodology of completing the tasks. The insurance inspectors were very impressed with the condition of the plant and have provided additional information and recommendations in the timing of major inspections on the McKee Run steam turbines. The Employee-led Plant Safety Committee and the Maintenance Staff were recipients of a fantastic breakfast prepared by Phil Marvel, Plant Electrician and Dean Blaha, Plant Manager. The breakfast was offered up in the Plant’s 2006 United Way Silent Auction by Phil (2006 Plant United Way Chairman) and Dean as a way to raise funds for the Plant’s United Way Campaign. The breakfasts were purchased by Paul Greenage, Maintenance Supervisor and Ken Beard, O & M Manager who then invited the teams to be their guests for the feast. Plant staff continues to support the United Way and its’ mission and is currently planning for the coming campaign year. Leading Edge Turbine Technologies (LETT) has received the fuel nozzles for inspection, flow testing and repairs. The repairs should take four to eight weeks and once the nozzles are returned, they will be placed into the plant inventory as a spare set. We have asked for an analysis from LETT to help us determine the exact cause of the damage to the fuel nozzles. We have yet to receive this analysis. 15 of 16

7.0 Summary of NAES Performance to Date Measure Month Year to Date YTD Incentive eFOR 0.0% 0.66% $66,800 Budget (Actual vs. Budget) 70.44% 80.45% $20,000 Safety 0 0 $15,000 Environmental 0 0 $15,000 Capacity Tests Completed Summer Winter Summer Winter Unit 1 No No Yes Yes $1,000 Unit 2 No No Yes Yes $1,000 Unit 3 No No Yes Yes $6,000 Unit 11 No No Yes Yes $2,000 Total YTD Incentive $126,800 16 of 16