Attachment

UTILITY COMMITTEE AGENDA April 23, 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. Annexation Requests A. 1086 South State Street, Owned by Investments Together, LLC B. South Side of Forrest Avenue, West of Mifflin Road, Owned by Edwin B. Baker, III, Donald Carey, and Ruth Carey 2. Update - Franchise Agreement Comprehensive Strategy - Video Services - Parameters for the Negotiations with Verizon for the Franchise Agreement 3. PACE/NAES Monthly Report (March) 4. Adjournment by 6:00 P.M. /tm S:\ClerksOffice\Agendas&Minutes\Committee-Agendas\2007\04-23-2007 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.

PETITION TO ANNEX AND ZONE PROPERTY Before The City Council Utility Committee April 23, 2007 Applicant/Owner: Investments Together, LLC 1052 East Lebanon Road Dover, DE 19901 Location: 1086 South State Street Size: +/-0.25 acres Tax Parcel #: ED-00-086.05-01-45.00-000 Application Date: March 28, 2007 County Zoning: BG (General Business) Proposed Zoning: C-2A (Limited Central Commercial) Present Use: Vacant Proposed Use: Unknown Comprehensive Plan Designation: Category 1 – Lands Identified for Annexation Utility Availability: There is a sewer manhole at the edge of the CN-MRI property to the west; however the Public Utilities Department does not believe that the depth is sufficient to extend gravity sewer to the site. The property could be serviced with a grinder pump; however, an easement would have to be obtained from the adjacent property between the subject parcel and the manhole to dump into the manhole. Water is available on State Street. The property is located within the City’s electric service territory. Cost-Rev Analysis: The Cost-Revenue analysis showed a positive cash flow to the City of approximately $4,870 over ten years. File Number: AX-07-03

A B C D E F G H I J K L M 1 Model Development Plan 2 City of Dover Cost/Revenue Analysis Module 0 Budget Year: 2006 3 Location: 1086 S. State Street 4 NON-RESIDENTIAL COSTS 5 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Development Development Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. 6 Service Type Year 1 Year 2 Year 1 Year 2 Year 3 Year4 Year5 Year 6 Year 7 Year 8 Formula 7 8 Sewer & Water Capital 9 Operating $478 $478 $478 $478 $478 $478 $478 $478 $478 $478 10 Sanitation Capital 11 Operating $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 12 Police Capital 13 Operating $402 $399 $399 $399 $399 $399 $399 $399 $399 $399 14 Fire Capital 15 Operating 16 Planning & Inspections Capital 17 Operating $40 $40 $40 $40 $40 $40 $40 $40 $40 $40 18 Streets Capital 19 Operating $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 20 Library Capital 21 Operating 22 Parks & Recreation Capital 23 Operating 24 Electric Capital $1,800 25 Operating $2,648 $2,648 $2,648 $2,648 $2,648 $2,648 $2,648 $2,648 $2,648 $2,648 26 General Administrative Capital 27 Operating $235 $235 $235 $235 $235 $235 $235 $235 $235 $235 28 TOTAL COSTS $5,603 $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 29 30 NON-RESIDENTIAL REVENUE 31 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Development Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. 32 Revenue Source Year 1 Year 1 Year 2 Year 3 Year4 Year5 Year 6 Year 7 Year 8 Year 9 Formula 33 34 Property Tax $594 $594 $594 $594 $594 $594 $594 $594 $594 $594 35 Transfer Tax $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 36 Municipal Street Aid Fund $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 37 Electric $2,669 $2,669 $2,669 $2,669 $2,669 $2,669 $2,669 $2,669 $2,669 $2,669 38 Sewer/Water $628 $628 $628 $628 $628 $628 $628 $628 $628 $628 39 Sanitation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 40 Permits & Licenses $0 $182 $182 $182 $182 $182 $182 $182 $182 $182 41 Wastewater Impact Fee $1,912 $1,912 $0 $0 $0 $0 $0 $0 $0 $0 42 Comcast Franchise 43 Library 44 Miscellaneous $19 $27 $31 $31 $31 $31 $31 $31 $31 $31 45 TOTAL REVENUE $5,823 $6,012 $4,104 $4,104 $4,104 $4,104 $4,104 $4,104 $4,104 $4,104 46 47 TOTAL NON-RESIDENTIAL IMPACT 48 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Development Development Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. 49 Year 1 Year 2 Year 1 Year 2 Year 3 Year4 Year5 Year 6 Year 7 Year 8 TOTAL 50 51 Total Costs $5,603 $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 $3,800 $39,800 52 Total Revenue $5,823 $6,012 $4,104 $4,104 $4,104 $4,104 $4,104 $4,104 $4,104 $4,104 $44,670 City of Dover, DE AX-06-02 4/18/2007 Page 1

A B C D E F G H I J K L M 53 Net Cost/Revenue Impact $220 $2,213 $305 $305 $305 $305 $305 $305 $305 $305 $4,870 City of Dover, DE AX-06-02 4/18/2007 Page 2

Synopsis of Cost/Revenue Analysis Model for Annexation AX-07-03: Lands of Investments together: 1086 S. State Street (0.25 acres) The following are notes regarding Cost/Revenue Analysis Model and the data inputs for the calculations. Residential Costs • None Residential Revenue • None. Non-Residential Costs • The General Administrative costs are suspected to be too high. The problem arises because the calculated cost is based on the index of taxes. • The model was based on information gathered from staff. No information was provided by the applicant regarding proposed time lines or building size. • Proposed Costs for Electric and the cost for circuit extension were included because the property does not have City of Dover Electric Service. Non-Residential Revenue • The General Administrative revenue are suspected to be too high. The problem arises because the calculated cost is based on the index of taxes. • The model was based on information gathered from staff. No information was provided by the applicant regarding proposed time lines or building size. • Proposed Costs for Electric and the revenue for circuit extension were included because the property does not have City of Dover Electric Service. Proposed • No Non-Residential development proposed. • No Residential Development proposed.

City of Dover Application No.: AX-07-03 Department of Planning & Inspections C-PO BRADFORD ST C-3 ROOSEVELT AVEN C-1 UE REET JEFFERSO N STREE T GOVERNORS AV STATE STREET ENUE RGO R-8 C-1A C-2A SC-2 CPO Site AY W AY GH W HI G H N T HI T PO N D U PO DU R-10 C-4 IO 0 155 310 620 Feet Legend Plan Title: AX-07-03 Lands of Investments Together Plan Type: Annexation Dover Parcels Tax Parcel: ED-00-086.05-01-45.00-000 Site Area: 0.25 ac Dover Boundary Owner: Investments Together, LLC County Zoning: BG (General Business) Zoning Proposed Zoning: C-2A (Limited Central Commercial) Date: 4-12-07 «

City of Dover Application No.: AX-07-03 Department of Planning & Inspections C-2A RGO SC-2 STATE STREET Site C-4 AY H W G HI T ON D UP AY W GH HI N T U PO D 0 65 130 260 Feet Legend Plan Title: AX-07-03 Lands of Investments Together Plan Type: Annexation Dover Parcels Tax Parcel: ED-00-086.05-01-45.00-000 Site Area: 0.25 ac Dover Boundary Owner: Investments Together, LLC County Zoning: BG (General Business) Zoning Proposed Zoning: C-2A (Limited Central Commercial) Date: 4-12-07 «

UTILITY -04-23-2007-1A Staff recommends the adoption of the following Resolution setting the date of the annexation Referendum to be held on JUNE 14, 2007, for property located at 1086 SOUTH STATE STREET. A RESOLUTION PROPOSING THE INCLUSION OF AN AREA WITHIN THE LIMITS OF THE CITY OF DOVER AND CALLING FOR A SPECIAL ELECTION TO BE HELD IN THE SAID AREA. WHEREAS, the Charter of the City of Dover authorizes Council to extend the boundaries of the said City after a special election of the qualified voters and real estate owners of the territory proposed to be annexed, and WHEREAS, the Mayor and Council of the City of Dover deem it in the best interest of the City of Dover to include an area located at 1086 South State Street, which is contiguous to the present City limits, into the limits of the City of Dover and within a zoning classification as recommended by the City of Dover Planning Commission. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 1. That a special election be held for an area located at 1086 South State Street situated in East Dover Hundred, Kent County, State of Delaware. 2. That the election be held on the 14th day of June, 2007 commencing at the hours of 11:00 a.m. in the City Hall Annex, 15 E. Loockerman Street, Dover, Delaware, for the purpose of submitting the question of annexation of the above area to those persons entitled to vote thereon. 3. That the election be held and conducted pursuant to the provisions of the Charter of the City of Dover as amended. 4. That this resolution be published in accordance with the City of Dover Charter. ADOPTED: * S:\ClerksOffice\Annexations\Annex-2007\1086 S State Street\CAF - Referendum Resolution 04-23-2007-1A.wpd

PETITION TO ANNEX AND ZONE PROPERTY Before The City Council Utility Committee April 23, 2007 Applicant: Edwin B Baker, III Donald Carey 1526 Forrest Avenue 826 East Loockerman Street Dover, DE 19904 Dover, DE 19901 Owner: Same Location: South side of Forrest Avenue, west of Mifflin Road Size: +/- 5 acres Tax Parcel #: ED-00-076.00-01-08.10-000 Application Date: March 30, 2007 County Zoning: RS-1 (Single Family Residential) Proposed Zoning: R-10 (One Family Residence) Present Use: Residential Proposed Use: Institutional/School Comprehensive Plan Designation: Category 2 – Lands Desirable for Annexation Utility Availability: All utilities are available to the referenced properties. The owner/developer is responsible for all costs and impact fees associated with connecting and extending sanitary sewer and water service to serve the properties. The City of Dover Public Utilities Department also reserves the right, at the time the properties are redeveloped, to require payment for or for improvements to be performed by the owner/developer of the property for any downstream capacity upgrades deemed necessary by the Department. Cost-Rev Analysis: The Cost-Revenue analysis showed a positive cash flow to the City of

approximately $29,550 over ten years. However, it should be noted that the analysis was performed based on the residential zoning of the subject property. The parcel, as well as the remainder of the Carey farm (annexed in July 2006) is now planned to be used as a public school site. File Number: AX-07-04

A B C D E F G H I J K L M 1 Model Development Plan 2 City of Dover Cost/Revenue Analysis Module 0 Budget Year: 2006 3 Location S Side of Forrest Ave 4 COST IMPACT BY FUND 5 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Development Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. 6 Fund Year 1 Year 1 Year 2 Year 3 Year4 Year5 Year 6 Year 7 Year 8 Year 9 7 8 General $848 $735 $735 $735 $735 $735 $735 $735 $735 $735 9 10 Water/Wastewater $249 $0 $0 $0 $0 $0 $0 $0 $0 $0 11 12 Electric $700 $700 $700 $700 $700 $700 $700 $700 $700 $700 13 14 TOTAL COST $1,798 $1,435 $1,435 $1,435 $1,435 $1,435 $1,435 $1,435 $1,435 $1,435 15 16 REVENUE IMPACT BY FUND 17 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Development Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. 18 Fund Year 1 Year 1 Year 2 Year 3 Year4 Year5 Year 6 Year 7 Year 8 Year 9 19 20 General $7,809 $7,762 $7,762 $7,809 $309 $309 $309 $309 $309 $309 21 22 Water/Wastewater $357 $357 $357 $357 $357 $357 $357 $357 $357 $357 23 24 Electric $769 $769 $769 $769 $769 $769 $769 $769 $769 $769 25 26 TOTAL REVENUE $8,936 $8,889 $8,889 $8,936 $1,436 $1,436 $1,436 $1,436 $1,436 $1,436 27 28 NET IMPACT BY FUND 29 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Development Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. Post Dev. 30 Year 1 Year 1 Year 2 Year 3 Year4 Year5 Year 6 Year 7 Year 8 Year 9 TOTAL 31 32 General $6,961 $7,028 $7,028 $7,074 -$426 -$426 -$426 -$426 -$426 -$426 33 Water/Wastewater $108 $357 $357 $357 $357 $357 $357 $357 $357 $357 34 Electric $69 $69 $69 $69 $69 $69 $69 $69 $69 $69 35 Net Cost/Revenue Impact $7,138 $7,454 $7,454 $7,501 $1 $1 $1 $1 $1 $1 $29,550 City of Dover, DE AX-06-02 4/17/2007 Page 1

Synopsis of Cost/Revenue Analysis Model for Annexation AX-07-04: Lands of Edwin Baker: 0 Forrest Ave (5 acres) The following are notes regarding Cost/Revenue Analysis Model and the data inputs for the calculations. Model Calculations • The existing unit value was taken from the Kent County PRIDE system. The applicant did not provide a more recent number. Residential Costs • Police operation costs are suspected to be high. The problem arises because the calculation of cost is based on the index of taxes and not the proportion of crimes that occur related to this type of residential property. • The General Administrative costs are suspected to be too high. The problem arises because the calculated cost is based on the index of taxes. Residential Revenue • The Electric cost and revenue were revised to reflect the percent usage by residential customers and not the percentage of population. Non-Residential Costs • None Non-Residential Revenue • None Proposed • Existing residential use

City of Dover Application No.: AX-07-04 Department of Planning & Inspections E IV L E V A LL FREED O M D R BB EY PE DR R-8 IV E RG-3 S T ON EY T KEN I VE CO DR E OAD R O LIN L ONY D RIV CA E ON R PL A INDE PEND E AC E SC-2 NCE BOULEVARD RG-2 ROAD FORREST AVENUE HARTLY C-2A SC-1 C-3 T REE CPO Site NS T F AW FARMVIEW DRIVE R-10 IV E DR DR IV E ES AM AR AD H LE RO T AL G TVIL ZL ET AF H A TR CT R IPM IO ELE UE RM-1 VEN IC A R-20 0 650 1,300 2,600 Feet Legend Plan Title: AX-07-04 Lands of Carey Plan Type: Annexation Dover Parcels Tax Parcels: ED-00-076.00-01-08.10-000 Site Area: 4.98 ac Dover Boundary Owner: Donald Carey, Edwin B. Baker III County Zoning: RS-1 (Single Family Residence) Zoning Proposed Zoning: R-10 (One Family Residence) Date: 4-04-07 «

City of Dover Application No.: AX-07-04 Department of Planning & Inspections MA YBERRY L W AY RG-2 R-8 D AN HERF IE L AT E HE R-20 RG-3 ROAD HARTLY Site R-10 RM-1 0 275 550 1,100 Feet Legend Plan Title: AX-07-04 Lands of Carey Plan Type: Annexation Dover Parcels Tax Parcels: ED-00-076.00-01-08.10-000 Site Area: 4.98 ac Dover Boundary Owner: Donald Carey, Edwin B. Baker III County Zoning: RS-1 (Single Family Residence) Zoning Proposed Zoning: R-10 (One Family Residence) Date: 4-04-07 «

UTILITY -04-23-2007-1B Staff recommends the adoption of the following Resolution setting the date of the annexation Referendum to be held on JUNE 14, 2007, for property located on the SOUTH SIDE OF FORREST AVENUE, APPROXIMATELY 1,495.5+/- FEET WEST OF MIFFLIN ROAD. A RESOLUTION PROPOSING THE INCLUSION OF AN AREA WITHIN THE LIMITS OF THE CITY OF DOVER AND CALLING FOR A SPECIAL ELECTION TO BE HELD IN THE SAID AREA. WHEREAS, the Charter of the City of Dover authorizes Council to extend the boundaries of the said City after a special election of the qualified voters and real estate owners of the territory proposed to be annexed, and WHEREAS, the Mayor and Council of the City of Dover deem it in the best interest of the City of Dover to include an area located on the south side of Forrest Avenue, approximately 1,495.5 +/- feet west of Mifflin Road, which is contiguous to the present City limits, into the limits of the City of Dover and within a zoning classification as recommended by the City of Dover Planning Commission. NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE CITY OF DOVER, IN COUNCIL MET: 1. That a special election be held for an area located on the south side of Forrest Avenue, approximately 1,495.5 +/- feet west of Mifflin Road, situated in East Dover Hundred, Kent County, State of Delaware. 2. That the election be held on the 14th day of June, 2007 commencing at the hours of 11:00 a.m. in the City Hall Annex, 15 E. Loockerman Street, Dover, Delaware, for the purpose of submitting the question of annexation of the above area to those persons entitled to vote thereon. 3. That the election be held and conducted pursuant to the provisions of the Charter of the City of Dover as amended. 4. That this resolution be published in accordance with the City of Dover Charter. ADOPTED: * S:\ClerksOffice\Annexations\Annex-2007\S Side of Forrest Ave W of Mifflin Rd\CAF - Referendum Resolution 04-23-2007-1B.wpd

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City of Dover March Monthly Report Asset, Energy and Risk Management April 19, 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 March, 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............................................................................................................ 4 Generation Management ................................................................................................ 5 Operations Management................................................................................................. 8 Energy Management ..................................................................................................... 12 Risk Management ......................................................................................................... 15 Appendix 1 .................................................................................................................... 25 Power Purchases – Hedge Transaction Details ........................................................ 25 Appendix 2 .................................................................................................................... 27 PJM Invoice Breakdown ............................................................................................ 27 Appendix 3 .................................................................................................................... 28 North American Energy Services - March 2007 Monthly Report ............................... 28 Proprietary & Confidential 1 Dover Monthly PGAM Report March 2007

EXECUTIVE SUMMARY Load Cost vs Budget Generation vs Budget Dover Load v 3 Year Average Load 15000 100,000 87.00 12000 75,000 85.00 9000 MWh 6000 MWh 50,000 $/M W h 83.00 3000 25,000 81.00 0 JUL - SEP- NOV- JAN- MAR- MAY- 0 07 07 07 08 08 08 J A S O N D J F M A M J 79.00 J A S O N D J F M A M J Actual Gen Budget Gen Actual Average Actual Weighted Average Budget Generation and Asset Management Net generation for the month of February credited by PJM was 695 MWh, as compared to a budget of 938 MWh. PJM dispatched Unit #3 at the McKee Run Facility in the real time market on March 7th for reliability purposes. Unit 3 ran 18.9 hours, realizing a generation production margin of $10,253, on an average unit margin of $14.75 per MWh sold. VanSant Unit 11 as operated for 0.3 hours as part of an annual blackstart demonstration for PJM. The demonstration was successful. Blackstart capability revenue from PJM is approximately $60,000 annually. The annual outage on McKee Run Unit 3 was also successfully completed during the month. During the month of March, North American Energy Services (“NAES) reported that there were no lost time accidents, OSHA reportable incidents or environmental Notice of Violations. Costs attributable to the operations of the McKee Run and VanSant stations for March were $123,363 below a budget of $393,987 due to favorable variances in personnel, administrative, maintenance and operating costs. For power year 2006-07, operations are $772,778 below a budget of $4,244,122. Energy and Risk Management Wholesale load for the month of March was 60,619 MWhs versus a three year historic load of 61,400 MWhs. Purchased power (or hedges) accounted for 62,765 MWhs of this volume at a cost of $4.63 million. Purchases and sales as well as other PJM related charges accounted for an additional cost of $133,036, inclusive of all load related fees. Total purchased power cost for the month of March was $5.01 million resulting in an all in monthly cost of power (including fees1) of $82.61/MWh, or $1.39/MWh below the targeted annual average of $84.00/MWh. Dover is calculated to be 100 percent hedged on peak and 101 percent hedged off peak for an anticipated all in delivered cost of $83.011 for the 2006-07 power year. Hedging for the 2007-08 power year currently has Dover hedged 91 percent on peak and 80 percent off peak with an “At Market” expected price of $84.22/MWh delivered to the Dover bus before any incentive fee paid to the Asset Manager. Hedging for 2008-09 has begun and Dover is currently hedged 15 percent on peak and 19 percent off peak at a target 1 Based on budgeted PGAM Incentive Fee. Proprietary & Confidential 2 Dover Monthly PGAM Report March 2007

price of $84.05/MWh before incentive fees. For the 2009-10 power year, Dover is 14 percent hedged on peak and 18 percent off peak at a target price of $81.59/MWh. All purchases are with investment grade entities. Credit is not currently required to be posted by the counterparties, but these positions are closely monitored by Pace Global Asset Management. PJM wholesale power prices experienced significant upward movement throughout the forward price periods since the last reported results (period ending 3/16/07). For example, the average forward On-peak price for the upcoming Power Year 2007/2008 increased by $7.08 per MWh, or 8.2 percent, over the last four weeks. This abrupt movement in the March shoulder period demonstrates the market volatility that the City’s risk management program is designed to manage. As a result, the City’s expected cost of service in 2006-07 and 2007-08 continues to be significantly protected from such adverse price movements. Pace Global and the City are now focused on developing a comprehensive hedging strategy for power year 2008- 09 and beyond. Proprietary & Confidential 3 Dover Monthly PGAM Report March 2007

PURCHASED POWER Load Cost vs Budget Dover Load vs 3 Year Average Load 100,000 87.00 75,000 85.00 MWh 50,000 $/MWh 83.00 25,000 81.00 0 J A S O N D J F M A M J 79.00 J A S O N D J F M A M J Actual Average Actual Weighted Average Budget March Hedges or Purchased Power Counterparty Volume (MWh) Average Cost Cost to Dover ($/MWh) ($ millions) BP 18,575 73.12 1.36 Constellation 27,375 77.58 2.12 Integrys 16,815 68.40 1.15 Connective (Capacity 11.8 MW $5.00/MW.d $1.8k Only) Total Energy Purchases 62,765 73.80 4.63 Dover Load 60,619 PJM Power Balancing and Load Related Fees Purchased Power (Hedges): 62,765 MWh’s @ $73.80/MWh: $4,632,265 Power Balancing and Additional PJM Related Costs: $133,035 Total Cost to Serve Load (60,619 MWh’s) $4,765,300 All in $/MWh load cost inclusive of Energy Manager Fees1: $82.61/MWh Monthly Market Management Highlights • PJM market volatility raised forward prices through the 2006-07 and 2007-08 power year forward periods. For example, the 2007-08 forward strip increased by $7.08/MWh. However, existing hedge positions protected the City’s budgets, as intended – limiting projected increases to $0.03 and $0.87 per MWh, respectively. • Aggregate Day Ahead demand bids within 1% of actual daily loads resulted in load following costs well-below budget, despite a volatile Real Time PJM market. Proprietary & Confidential 4 Dover Monthly PGAM Report March 2007

GENERATION MANAGEMENT Generation Production Margin vs Budget Generation vs Budget 500 450 400 350 15000 300 250 200 12000 150 100 9000 M W h 50 $1000 0 Ju Au Oc Nove Ja Fe Ma Ap Ma Ju gu 6000 -50 ly Se pte m st to be r Dece mb mb er nu ar y br ua ry rch ril y ne -100 be er r -150 3000 -200 -250 0 -300 -350 JUL - SEP- NOV- JAN- MAR- MAY- -400 07 07 07 08 08 08 -450 Actual Gen Budget Gen Budget Actual Out -of-merit generation in Oct-Jan required for reliability. Monthly Operations Summary – March 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 18.917 18.917 0.30 19.217 Starts # 0 0 1 1 2 3 Gross Generation MWh 0 0 780.182 780.182 0.3 780.482 Net Generation MWh 0 0 697.498 697.498 0.0 697.498 Total Auxiliaries MWh 34.634 34.634 251.360 389.894 37.345 427.239 Auxiliaries purchased MWh 34.634 34.634 168.676 237.943 37.315 275.258 Fuel Gas Used 1000s BTU 0 0 101,305 101,305 103,747 205,053 Fuel Oil Used 1000s BTU 0 0 13,242,748 13,242,748 0 13,242,748 Fuel Oil Used* Gallons 0 0 88,151 88,151 0 88,151 Total Fuel 1000s BTU 0 0 13,344,053 13,344,053 103,747 13,447,801 Net Heat Rate* BTU/KWh NA NA 19,131 19,131 NA 19,131 Unit Trips # 0 0 0 0 2& 2& Capacity Factor % 0.00% 0.00% 0.92% 0.92% 0.00% 0.53% Availability Factor % 100% 100% 86.17% 95.39% 100% 96.54% eFOR % 0% 0% 0% 0% 0% 0% HW Boiler Gas Usage 1000s BTU 2,141,346 2,141,346 Pilot Gas Usage 1000s BTU 0 0 0 0 * Fuel oil usage numbers and resulting Net Heat Rate are based on questionable flow meter readings. These numbers are believed to be inaccurate at this time. Based on tank level readings, #6 FO use during the McKee 3 dispatch was 56,293 gallons, which yields a more credible net heat rate of 12,269 Btu/kWh. # Note: Does not include HWB or Pilot Gas; * Note: Includes fuel used to heat boiler to prevent freezing. & Note: Unit Trips under controlled conditions to test turbine overspeed trip function Proprietary & Confidential 5 Dover Monthly PGAM Report March 2007

Generation Financial Performance Per the table below, the McKee and VanSant stations experienced a generation production margin of $10,253 on power sales of 695 MWh for the month of March. The average realized unit generation production margin was $14.7 per MWh. Generation Production Margin Transaction Volumes Revenue/(Cost) PJM Invoice for Power Sold 695 MWh’s $85,911 Fuel and Transport 750dth gas/56,293 gal #6 oil ($75,658) Generation Production Margin 695 MWh’s $10,253 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. PJM Invoice (Black Start) $4,978 Fuel Oil Tank Heating & Blackstart Gas Supply ($18,163) Eastern Shore Demand Charge ($4,342) Transco Demand Charge ($4,349) ($21,876) Proprietary & Confidential 6 Dover Monthly PGAM Report March 2007

Emissions and Allowance Management Two thousand tons of 2006 vintage SO2 allowances were sold on April 2nd, resulting in the current emissions allowance balances shown in the table below. This includes 654 tons 2006 vintage SO2 allowances remaining for sale. Timing for sale of these allowances will be discussed with the City. EMISSIONS & ALLOWANCE SUMMARY Allowances Allowances Allowance Allowance Emissions Emissions Sold Sold Allowance Vintage Allocation Month YTD Month YTD Balance SO2 - 2006 2725 n/a 71 2000 2000 654 SO2 - 2007 2723 7 11 0 0 2712 Nox - 2007 198 0 0 0 0 198 NOx emissions pertain only to Seasonal emissions (May 1 – Sep 30) On April 2nd, a sale of 2,000 tons of 2006 vintage SO2 allowances was made to Louis Dreyfus Energy Service, LP. The transaction netted $426.75 per ton or $853,500 for the City. Combined with the 170 tons NOx credits sold in 2006 for $950 net per ton (yielding $161,500), net emissions allowance sales revenue for the 2006-07 power year is $1,015,000 After the transactions referenced above, the City of Dover has 654 vintage 2006 allowances and 2,712 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 3,300 excess 2006 and 2007 vintage SO2 allowances this year. Current SO2 allowance market prices are in the range of $420 per ton. 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. Current NOx allowance market prices are stable near $1000 per ton. Monthly Generation Management Highlights: • Generating units were dispatched only once (Unit 3 ran 18.9 hrs on March 6th) during the month (for PJM reliability purposes), realizing a generation production margin of $10,253, on a unit production margin of $14.75/MWh sold. • As authorized during the month of March, sale of 2,000 excess 2006 vintage SO2 allowances was conducted on April 2nd, netting $426.75 per ton or $853,500 for the City. Proprietary & Confidential 7 Dover Monthly PGAM Report March 2007

OPERATIONS MANAGEMENT Operations Summary Generation Unit performance for the month of March is provided below: Monthly Operations Summary – March 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 18.917 18.917 0.30 19.217 Starts # 0 0 1 1 2 3 Gross Generation MWh 0 0 780.182 780.182 0.3 780.482 Net Generation MWh 0 0 697.498 697.498 0.0 697.498 Total Auxiliaries MWh 34.634 34.634 251.360 389.894 37.345 427.239 Auxiliaries purchased MWh 34.634 34.634 168.676 237.943 37.315 275.258 Fuel Gas Used 1000s BTU 0 0 101,305 101,305 103,747 205,053 Fuel Oil Used 1000s BTU 0 0 13,242,748 13,242,748 0 13,242,748 Fuel Oil Used* Gallons 0 0 88,151 88,151 0 88,151 Total Fuel 1000s BTU 0 0 13,344,053 13,344,053 103,747 13,447,801 Net Heat Rate* BTU/KWh NA NA 19,131 19,131 NA 19,131 Unit Trips # 0 0 0 0 2& 2& Capacity Factor % 0.00% 0.00% 0.92% 0.92% 0.00% 0.53% Availability Factor % 100% 100% 86.17% 95.39% 100% 96.54% eFOR % 0% 0% 0% 0% 0% 0% HW Boiler Gas Usage 1000s BTU 2,141,346 2,141,346 Pilot Gas Usage 1000s BTU 0 0 0 0 * Fuel oil usage numbers and resulting Net Heat Rate are based on questionable flow meter readings. These numbers are believed to be inaccurate at this time. Based on tank level readings, #6 FO use during the McKee 3 dispatch was 56,293 gallons, which yields a more credible net heat rate of 12,269 Btu/kWh. # Note: Does not include HWB or Pilot Gas * Note: Includes fuel used to heat boiler to prevent freezing. & Note: Unit Trips under controlled conditions to test turbine overspeed trip function Unit Trips/Outages During the month, Unit 3 ran a total of 18.917 hours on March 6 due to dispatch by PJM in the real time market for reliability purposes. Unit 11 was operated for 0.3 hours on March 27 as part of an annual blackstart demonstration for PJM. The Unit 11 overspeed trip devices were also tested at the conclusion of the successful black start test and found to be operating properly. Other Events NAES completed the annual outage on Unit 3 during the period March 19- 26, ahead of the anticipated scheduled duration. During the outage, we received our annual boiler inspection and certificate of inspection from Mr. Steve Smith of the ARISE Insurance Company. Proprietary & Confidential 8 Dover Monthly PGAM Report March 2007

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. On this basis, DNREC has extended the tank inspection deadline to no later than June 1, 2008. A meeting with the DNREC Air Quality Management Branch was held to discuss a Delaware Regulation 1146 Compliance Plan for Unit 3. A number of options regarding Unit 3 presented during the meeting by the City of Dover are on the table for the DNREC to consider. A follow up meeting with DNREC is to be scheduled for an April, 2007 date. NAES met with and provided information to several boiler equipment vendors who had been contacted to help us find ways to lower our NOx emissions to comply with DNREC Regulation 1146, which will take effect in 2009. 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. NAES has asked for an analysis from LETT to help determine the exact cause of the damage to the fuel nozzles. NAES continues to work with General Physics to set up the GPILearn on-line training system for the plant. They have provided them with preliminary information on plant personnel so that individual training accounts could be set up for each employee and so that supervision is able to monitor their training plan. Training on the system for selected plant management personnel is scheduled for early April, 2007. As part of efforts to continuously improve, NAES has been conducting research on installation of Automatic Generation Control (AGC) on Unit 3 and on Unit 11. This improvement, if achievable, could provide enhanced operational value to PJM and the City. Pace Global and NAES are working together to review alternative competitive bidding strategies in the PJM market that could provide greater margin from operations. Proprietary & Confidential 9 Dover Monthly PGAM Report March 2007

Generation Unit performance for the fiscal year 2006-07 to date is provided below: Fiscal Year to Date 7/1/06-3/31/07 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 184.134 190.018 441.026 815.178 112.354 927.532 Starts # 6 5 23 34 35 69 Gross Generation MWh 1,499.154 1,580.808 22,198.381 25,278,343 3,557.578 28,835.921 Net Generation MWh 1,406.823 1,482.405 20,259.787 23,149.015 3,536.090 26,685.105 Total Auxiliaries MWh 388.784 394.856 3,844.113 4,769.565 287.891 5,102.043 Auxiliaries purchased MWh 296.453 296.453 1,905.519 2,498.425 266.403 2,809.415 Fuel Gas Used 1000s BTU 13,478,640 17,386,555 153,605,208 184,470,403# 42,103,989 226,574,393# Fuel Oil Used 1000s BTU 8,547,961 3,177,772 105,335,824 117,061,558 5,246,186 122,307,744 Fuel Oil Used Gallons 57,177 21,256 702,281 780,714 37,933 818,647 Total Fuel 1000s BTU 22,026,601 20,564,327 258,941,032 301,531,961# 47,350,176 348,882,138# Net Heat Rate BTU/KWh 15,734 13,900 12,781 13,026 13,391 13,074 Unit Trips # 4 1 1 6 9 15 Capacity Factor % 1.26% 1.33% 3.02% 2.59% 1.38% 2.32% Availability Factor % 97.74% 98.44% 97.91% 98.03% 99.17% 98.54% eFOR % 1.06% 3.33% 0.52% 0.94% 0.0% 0.73% HW Boiler Gas Usage 1000s BTU 16,254,985 16,254,985 Pilot Gas Usage 1000s BTU 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 March, there were no employee or contractor related injuries or illnesses. The site did hold an emergency evacuation drill at the McKee Run facility during the first week in March. The drill went smoothly, however several ways to improve the process were identified and NAES is currently working on those improvements. Plans to implement a better means of accounting for each person on site are currently in progress. The Employee-led Plant Safety Committee has completed plans to commemorate two years of accident- free operation. The plant will complete this milestone on April 5, 2007. A lunch time event is scheduled for April 17, 2007. There were no Notice of Violations or environmental excursions during the month. There were two Near Miss Reports turned in which involved LOTO2. There was no injury nor equipment damage involved in either incident but these incidents should heighten an awareness in returning valves, control switches, and breakers to their original position, unless properly documenting otherwise. 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. 2 Lockout/Tagout procedures. Proprietary & Confidential 10 Dover Monthly PGAM Report March 2007

Operations Financial Summaries Operating Costs for the month of March were $270,624 against a budget of $393,987. Costs attributable to the operations of the McKee Run and VanSant stations for March were $123,363 below budget due to favorable variances in personnel, administrative, maintenance and operating costs. For power year 2006- 07 Year to Date, operations are $772,778 below a budget of $4,244,122. A breakdown of operating costs for March and Fiscal Year to Date are provided below: Financial – Current Month Month – March 2007 Actual Budget Variance Personnel 207,036 250,018 42,982 Administrative 30,624 49,119 18,495 EH & S 1,094 6,000 4,906 Maintenance Expense 22,855 48,050 25,195 Operations Expense 9,015 40,800 31,785 Total $270,624 $393,987 $123,363 Financial – Fiscal Year to Date Number of Months - 9 Actual Budget Variance Personnel 2,184,761 2,438,154 253,393 Administrative 741,179 766,655 25,476 EH & S 68,808 65,500 (3,308) Maintenance Expense 346,780 495,450 148,670 Operations Expense 129,816 478,363 348,547 Total $3,471,344 $4,244,122 $772,778 Monthly Operations Management Highlights: • McKee Run Unit 3 responded to PJM’s dispatch request on March 6th and operated for 18.9 hrs, producing 695 MWh for sale into the PJM real time market. • VanSant Unit 11 as operated for 0.3 hours as part of a successful annual blackstart demonstration for PJM. The demonstration was successful • The annual outage at McKee Run Unit 3 was successfully completed during March 19 - 26. • There were no lost time accidents, OSHA reportable incidents or environmental Notice of Violations associated with the generation stations in March. Proprietary & Confidential 11 Dover Monthly PGAM Report March 2007

ENERGY MANAGEMENT Purchased Power and Volumes and Pricing Purchased power for the month of March is summarized below. This power serves to hedge or protect Dover from the volatility in the PJM wholesale power market. March Hedges or Purchased Power Counterparty Volume (MWh) Average Cost Cost to Dover ($/MWh) ($ millions) BP 18,575 73.12 1.36 Constellation 27,375 77.58 2.12 Integrys 16,815 68.40 1.15 Connective (Capacity 11.8 MW $5.00/MW.d [$1.8k] Only) Total Energy Purchases 62,765 73.80 4.63 Dover Load 60,619 Actual Dover load of 60,619 MWh was 1.3% below the 3 year historic load of 61,400 MWh. Hedge volumes exceeded load as the 100% on peak and 101% off peak hedge levels for 2006-07 vary against monthly load projections. PJM market volatility raised forward prices through the 2006-07 and 2007-08 power year forward periods. For example, the 2007-08 forward strip increased by $7.08/MWh. However, existing hedge positions protected the City’s budgets, as intended, as discussed in the Risk Management section of this report. Aggregate Day Ahead demand bids were within 1% of actual daily loads. This resulted in load following costs well-below budget, despite a volatile Real Time PJM market. PJM Power Balancing and Load Related Fees Purchased Power (Hedges): 62,765 MWh’s @ $73.80/MWh: $4,632,265 Power Balancing and Additional PJM Related Costs: $133,035 Energy Manager Fee and Incentive (Fee @ $2.76/MWh, Incentive @ $1.24/MWh) $242,476 Total Cost to Serve Load (60,619 MWh’s) $5,007,778 All in $/MWh load cost inclusive of Energy Manager Fees: $82.61/MWh Proprietary & Confidential 12 Dover Monthly PGAM Report March 2007

Purchased Fuel and Transportation Natural gas commodity purchases were necessary to supply start gas to McKee Run Unit 3 during 18.9 hours of PJM reliability dispatch on March 6th, as well as to provide gas to VanSant Unit 11 during blackstart testing on March 27th. Pipeline balancing was utilized to manage gas costs as early March prices had spiked. Average incurred gas price for 950 Dth was $7.08 per Dth. Date Volume (Dth) Price ($/Dth) Total Commodity Cost ($) 14-Mar 150 $6.80 $1,020.00 15-Mar 150 $6.95 $1,042.50 16-Mar 150 $7.08 $1,062.00 17-Mar 100 $6.92 $692.00 18-Mar 100 $6.92 $692.00 19-Mar 100 $6.92 $692.00 26-Mar 200 $7.65 $1,530.00 Totals 950 $7.08 $6,730.50 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 70 dth/day $7.72 $16,746 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 $4,342 TransCo FT Demand Charge $4,349 Total Purchases $8,691 Other Gas Purchases Commodity and transportation imbalances on Eastern Shore Pipeline for the month resulted in a credit of $303 to the City, and are summarized as follows. Imbalance (dth) Estimated $/dth Estimated Total Cost (108) $7.30 ($788) Transport Volume Estimated $/dth Estimated Total Cost Firm 2,124 $0.017 $36 IT 765 $0.587 $449 Proprietary & Confidential 13 Dover Monthly PGAM Report March 2007

Purchased Commodity Fuel Oil Summary Approximately 56,000 gallons of No.6 fuel oil was consumed during March 6 operations at McKee Run Unit 3. Inventory of 1.2 million gallons No. 6 oil remains adequate. No No.2 fuel oil was consumed at VanSant during the month March. Inventories of No.2 at VanSant are low and PGAM has been authorized to replenish storage up to 10 days supply, within prudency. However, the current market price of $2.00 per gallon is viewed as too high to merit purchases at this time and the market continues to be monitored. Tank Inventory Actuals as of March 31 Inventory in Days of Burn Tank Tank Capacity (gal) (gal) (Full Load) #6 Oil 2,554,105 1,207,208 9 #2 Oil 258,000 116,848 4 March -07 Burns Market Price Date #6 Oil Burns/gal Inventory Price $/gal $/gal Inventory Cost Market Cost 6-Mar 56,293 $1.26 $1.34 ($70,648) ($75,433) Proprietary & Confidential 14 Dover Monthly PGAM Report March 2007

RISK MANAGEMENT PJM wholesale power prices experienced significant upward movement throughout the forward price periods since the last reporting period (ending 3/16/07). For example, the average forward On-peak price for the upcoming Power Year 2007/2008 increased by $7.08 per MWh, or 8.2 percent, while the average forward On peak price for the Power Year 2008/2009 increased by $5.37 per MWh, or 6.4 percent. This abrupt movement in the March shoulder period demonstrates the market volatility that the City’s risk management program is designed to manage, and the City’s expected cost of service in 2006- 07 and 2007-08 continues to be significantly protected from such adverse price movements. Pace Global and the City are now focused on developing a comprehensive hedging strategy for power year 2008-09 and beyond. A meeting was held on April 11th to further clarify the structure and objectives of the program, which is proposed to consist of integrated programmatic, defensive, 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. We anticipate that the strategy will be ratified in the April 2007 ERMC meeting, and Pace Global will thereafter begin implementation to increase the City’s hedge ratio to 30 percent for power year 2008-09. The first element of the proposed hedging strategy will target peak usage in order to reduce the City’s exposure to the most volatile element of the City’s power costs. Proprietary & Confidential 15 Dover Monthly PGAM Report March 2007

2006 - 2007 Power Year Hedge Position As of April 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 $83.01 per MWh for the 2006-07 power year, inclusive of all Pace budgeted fees. Despite the acute PJM market price increase in March, Dover’s power cost is up only $0.03 per MWh relative to last month as the hedge positions shielded the City and its customers. 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 values could increase to $84.30 per MWh, given a “worst case” possible adverse market movement in commodity and load following costs. That “At Market + Risk” result would still be $0.94 per MWh below budget. Forward Hedge % Power Year 2006-07 Date: 04/10/2007 Peak 100% Off Peak 101% At Market At Market + Risk* Energy Cost(including Load Following) $75.64 $76.93 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 $1.12 $1.12 Losses $0.00 $0.00 $3.36 $3.36 Add Pace Fees $2.76 $2.76 Total Cost $81.77 $83.06 Add Incentive $1.24 $1.24 Current Expected $83.01 $84.30 * * Includes estimate Includes of 10-Day estimate VaR & LF of 10-Day VaRRisk & Load Following Risk. Includes actual through February, 2007 Includes actuals through March and projections through June. Pace Incentive Fee represents budgeted amount. Proprietary & Confidential 16 Dover Monthly PGAM Report March 2007

2006 – 2007 Month-by-Month Hedge Transactions Off-Peak Power, Dover Zone 4/10/2007 On-Peak Power, Dover Zone 4/10/2007 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 17 Dover Monthly PGAM Report March 2007

2007 - 2008 Power Year Hedge Position For power year 2007-2008, the estimated power consumption is hedged 91 percent 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 $84.22/MWh, before any incentive fees. Incentive fees will be estimated once the benchmark cost of supply is established for the 2007-2008 power year. The $84.22 cost of service is up only $0.87 per MWh versus the last report, as the 91 percent on peak hedge position protected the City from the recent $5.37/MWh increase in PJM forward market prices for this period. The 10 day value at risk (with an adverse market movement in commodity and load following) could increase this target number to $86.57/MWh. Forward Hedge % Power Year 2007-08 Date: 04/10/2007 Peak 91% Off Peak 80% At Market At Market + Risk* Energy Cost(including Load Following) $77.13 $79.48 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 $84.22 $86.57 Add Incentive $1.24 $1.24 Current Expected $85.46 $87.81 * Includes estimate of 10-Day VaR & LF Risk Proprietary & Confidential 18 Dover Monthly PGAM Report March 2007

2007 – 2008 Month-by-Month Hedge Transactions Off-Peak Power, Dover Zone 4/10/2007 On-Peak Power, Dover Zone 4/10/2007 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 19 Dover Monthly PGAM Report March 2007

2008 - 2009 Power Year Hedge Position For power year 2008-2009, the estimated power consumption is hedged 15 percent 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 $84.05 per MWh before any incentive fee. The $84.05 is $3.85 per MWh above the 2008-09 projected cost of $80.20 in our last report. This increase results from significant upward PJM price movements since the last report period (ending March 16). The 10 day value at risk (with an adverse market movement in commodity and load following cost) could increase this target number to $89.61 per MWh. Forward Hedge % Power Year 2008-09 Date: 04/10/2007 Peak 15% Off Peak 19% At Market At Market + Risk* Energy Cost(including Load Following) $76.90 $82.46 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 $2.90 $2.90 Total Cost $84.05 $89.61 Add Incentive $0.00 $0.00 Current Expected $84.05 $89.61 * Includes estimate of 10-Day VaR & LF Risk Proprietary & Confidential 20 Dover Monthly PGAM Report March 2007

2008 – 2009 Month-by-Month Hedge Transactions Off-Peak Power, Dover Zone 4/10/2007 On-Peak Power, Dover Zone 4/10/2007 Hedge Hedge Total Fixed Total Fixed Period Ratio Period Ratio 08-09 Volume Volume 08-09 Volume Volume (MWh) (MWh) (MWh) (MWh) Jul-08 40,265 5,880 15% Jul-08 39,859 5,280 13% Aug-08 35,241 6,120 17% Aug-08 46,866 5,040 11% Sep-08 34,147 5,760 17% Sep-08 36,290 5,040 14% Oct-08 28,269 5,640 20% Oct-08 33,258 5,520 17% Nov-08 27,480 6,240 23% Nov-08 30,634 4,560 15% Dec-08 32,685 5,880 18% Dec-08 29,396 5,280 18% Jan-09 32,152 6,120 19% Jan-09 35,169 5,040 14% Feb-09 27,815 5,280 19% Feb-09 30,888 4,800 16% Mar-09 28,970 5,880 20% Mar-09 32,627 5,280 16% Apr-09 26,647 5,520 21% Apr-09 30,219 5,280 17% May-09 29,588 6,360 21% May-09 35,360 4,800 14% Jun-09 32,682 5,520 17% Jun-09 39,161 5,280 13% Total 375,941 70,200 19% Total 419,727 61,200 15% Proprietary & Confidential 21 Dover Monthly PGAM Report March 2007

2009 - 2010 Power Year Hedge Position For power year 2009-2010, the estimated power consumption was hedged 14 percent peak and 18 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 $81.59 per MWh before any incentive fee. The $81.59 is $3.02 per MWh above the 2009-2010 projected cost of $78.57 in our last report. This increase results from significant upward PJM price movement since the last report period (ending March 16). The 10 day value at risk (with an adverse market movement in commodity and load following cost) could increase this target number to $86.67 per MWh. Forward Hedge % Power Year 2009-10 Date: 04/10/2007 Peak 14% Off Peak 18% At Market At Market + Risk* Energy Cost(including Load Following) $74.38 $79.46 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 $2.96 $2.96 Total Cost $81.59 $86.67 Add Incentive $0.00 $0.00 Current Expected $81.59 $86.67 * Includes estimate of 10-Day VaR & LF Risk Proprietary & Confidential 22 Dover Monthly PGAM Report March 2007

2009 – 2010 Month-by-Month Hedge Transactions Off-Peak Power, Dover Zone 4/10/2007 On-Peak Power, Dover Zone 4/10/2007 Hedge Hedge Total Fixed Total Fixed Period Ratio Period Ratio 09-10 Volume Volume 09-10 Volume Volume (MWh) (MWh) (MWh) (MWh) Jul-09 40,668 5,640 14% Jul-09 40,258 5,520 14% Aug-09 35,593 6,120 17% Aug-09 47,335 5,040 11% Sep-09 34,489 5,760 17% Sep-09 36,653 5,040 14% Oct-09 28,552 5,880 21% Oct-09 33,591 5,280 16% Nov-09 27,755 6,000 22% Nov-09 30,940 4,800 16% Dec-09 33,012 5,880 18% Dec-09 29,690 5,280 18% Jan-10 32,474 6,360 20% Jan-10 35,521 4,800 14% Feb-10 28,093 5,280 19% Feb-10 31,197 4,800 15% Mar-10 29,260 5,640 19% Mar-10 32,953 5,520 17% Apr-10 26,914 5,520 21% Apr-10 30,521 5,280 17% May-10 29,884 6,360 21% May-10 35,714 4,800 13% Jun-10 33,009 5,520 17% Jun-10 39,553 5,280 13% Total 379,701 69,960 18% Total 423,924 61,440 14% Proprietary & Confidential 23 Dover Monthly PGAM Report March 2007

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 24 Dover Monthly PGAM Report March 2007

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 25 Dover Monthly PGAM Report March 2007

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 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 26 Dover Monthly PGAM Report March 2007

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 Generation Net Day Ahead Energy $18,527.10 $0.00 $18,527.10 Realtime Energy $32,977.03 $74,562.01 $107,539.04 Regulation ($34,684.47) $0.00 ($34,684.47) Synchronized Reserve Charges ($20,095.41) $0.00 ($20,095.41) Balancing Operating Reserves Charges ($4,404.39) $0.00 ($4,404.39) Day Ahead Operating Reserves Charges ($3,833.31) $0.00 ($3,833.31) Synchronous Condensing Charges ($1,292.66) $0.00 ($1,292.66) Reactive Services Charges ($161.21) $0.00 ($161.21) Real-time Economic Load Response Program Charges ($3,000.08) $0.00 ($3,000.08) Transmission Losses (Point-to-Point) Credits $4,615.88 $0.00 $4,615.88 Balancing Operating Reserves Credits $0.00 $11,348.93 $11,348.93 Auction Revenue Rights Credits $69,918.33 $0.00 $69,918.33 PJM Scheduling System Control and Dispatch Service Charges ($17,647.37) $0.00 ($17,647.37) Transmission Owner Scheduling System Control and Dispatch Service Charges ($4,503.96) $0.00 ($4,503.96) Reactive Supply and Voltage Control from Generation Sources Service Charges ($21,953.98) $0.00 ($21,953.98) Black Start Service Charges ($1,102.58) $0.00 ($1,102.58) North American Electric Reliability Corporation (NERC) Charge ($278.85) $0.00 ($278.85) Reliability First Corporation (RFC) Charges ($606.19) $0.00 ($606.19) Network Integration Transmission Service Charges ($145,641.41) $0.00 ($145,641.41) Expansion Cost Recovery Charges ($415.29) $0.00 ($415.29) Black Start Service Credits $0.00 $4,977.77 $4,977.77 Non-Firm Point-to-Point Transmission Service Credits $1,260.20 $0.00 $1,260.20 PPA ($713.32) $0.00 ($713.32) Total ($133,035.94) $90,888.71 ($42,147.23) 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. Pace will track this credit to ensure the proper refund is received by the city. The savings by month is as follows: June-06: $91,577.42 July-06: $94,630.00 Aug-06: $94,630.00 Sept-06 $91,577.42 Oct-06 $94,630.00 Nov-06 $94,630.00 (being researched, appears to be an over refund) Proprietary & Confidential 27 Dover Monthly PGAM Report March 2007

APPENDIX 3 NORTH AMERICAN ENERGY SERVICES - MARCH 2007 MONTHLY REPORT Proprietary & Confidential 28 Dover Monthly PGAM Report March 2007

North American Energy Services Dover, DE March 2007 Monthly Report VanSant Generating Station Black Start Demonstration 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 Unit 3 Annual Outage March 19 – March 26, 2007 Unit 11 Annual Black Start Test March 27, 2007 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 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 Environmental, Health, and Safety Month Fiscal Year to Date (March 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 (March 2007) 7/1/06-6/30/07 Net Station Output (MWH) – Note 1 697.498 26,685.105 Period Hours 2,972 26,300 On line Hours 19.217 927.532 Planned Outage Hours 102.917 279.734 Maintenance Outage Hours 0.0 54.667 Forced Outage Hours 0.0 108.575 Reserve Shutdown Hours 2,853.866 24,933.272 Equivalent Forced Outage Hours 0.0 214.57 Station Availability - Note 2 96.54% 98.32% 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 14000 Total Gross Generation (M Wh) 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 March, there were no employee or contractor related injuries or illnesses. The site did hold an emergency evacuation drill at the McKee Run facility during the first week in March. The drill went smoothly, however we did identify several ways to improve our process and are currently working on those items. Plans to implement a better means of accounting for each person on site are currently in progress. The Employee-led Plant Safety Committee has completed the plans to commemorate two years of accident-free operation. The plant will complete this milestone on April 5, 2007. A lunch time event is scheduled for April 17, 2007. There were no Notice of Violations or Environmental excursions during the month. There were two Near Miss Reports turned in which involved LOTO. There was no injury nor equipment damage involved in either incident but these incidents should heighten an awareness in returning valves, control switches, breakers to their original position unless properly documenting otherwise. 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. 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 47,677.75 Worked First Aid 0 0 0 0 0 0 0 0 0 0 cases OSHA 0 0 0 0 0 0 0 0 0 0 Recordable Lost Time 0 0 0 0 0 0 0 0 0 0 Accidents Restricted Workday 0 0 0 0 0 0 0 0 0 0 Accident Near Miss 0 1 0 0 0 0 0 0 2 3 Date last OSHA Recordable 4/05/05 Date last Lost Time Accident 4/05/05 Days since last OSHA recordable 725 Days since last Lost Time Accident 725 5 of 16

Emissions (NOx & SO2) All data thru 3/31/07 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 69.92 0.24 75.36 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 2000 2586 139 71 654 2007 0 2585 138 11 2712 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 are scheduled to attend training at the General Physics training Center on April 11 & 12, 2007. Program implementation should begin once the two day training is completed and employees at the Dover site receive instructions on how to use the General Physics’ system. 7 of 16

3.0 Financial Financial – Current Month Month – March 2007 Actual Budget Variance Personnel 207,036 250,018 42,982 Administrative 30,624 49,119 18,495 EH & S 1,094 6,000 4,906 Maintenance Expense 22,855 48,050 25,195 Operations Expense 9,015 40,800 31,785 Total $270,624 $393,987 $123,363 Financial – Fiscal Year to Date Number of Months - 9 Actual Budget Variance Personnel 2,184,761 2,438,154 253,393 Administrative 741,179 766,655 25,476 EH & S 68,808 65,500 (3,308) Maintenance Expense 346,780 495,450 148,670 Operations Expense 129,816 478,363 348,547 Total $3,471,344 $4,244,122 $772,778 3.1 Variance analysis For the month of March, we had a favorable variance of $123,363. The variance was due to the following: PERSONNEL EXPENSES – Favorable variance of $42,982 due to lower overtime and burdens due to low that accounted for the majority of the total variance ADMINISTRATIVE EXPENSES - Favorable variance of $18,495 which was mostly due to insurance premiums budgeted on a monthly basis were paid in a lump sum payment in August. ENVIRONMENTAL, HEALTH, AND SAFETY EXPENSES - Favorable variance of $4,906 due to a zero non-hazardous waste disposal expense and zero safety supply purchases. MAINTENANCE EXPENSES- Favorable variance of $25,195 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. We now have a separate inventory account that we can use in H.T.E. so the number of times this happens in the future should certainly be minimized. OPERATING EXPENSES – Favorable variance of $31,785 due primarily to not being billed for McKee Run auxiliary electric usage and for low water usage (limited operational run time). 8 of 16

4.0 Operations Month – March 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 18.917 18.917 0.30 19.217 Starts # 0 0 1 1 2 3 Gross Generation MWh 0 0 780.182 780.182 0.3 780.482 Net Generation MWh 0 0 697.498 697.498 0.0 697.498 Total Auxiliaries MWh 34.634 34.634 251.360 389.894 37.345 427.239 Auxiliaries purchased MWh 34.634 34.634 168.676 237.943 37.315 275.258 Fuel Gas Used 1000s BTU 0 0 101,305 101,305 103,747 205,053 Fuel Oil Used 1000s BTU 0 0 13,242,748 13,242,748 0 13,242,748 Fuel Oil Used Gallons 0 0 88,151 88,151 0 88,151 Total Fuel 1000s BTU 0 0 13,344,053 13,344,053 103,747 13,447,801 Net Heat Rate BTU/KWh NA NA 19,131 19,131 NA 19,131 Unit Trips # 0 0 0 0 2& 2& Capacity Factor % 0.00% 0.00% 0.92% 0.92% 0.00% 0.53% Availability Factor % 100% 100% 86.17% 95.39% 100% 96.54% eFOR % 0% 0% 0% 0% 0% 0% HW Boiler Gas Usage 1000s BTU 2,141,346 2,141,346 Pilot Gas Usage 1000s BTU 0 0 0 0 # Note: Does not include HWB or Pilot Gas * Note: Includes fuel used to heat boiler to prevent freezing. & Note: Unit Trips under controlled conditions to test turbine overspeed trip function 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 184.134 190.018 441.026 815.178 112.354 927.532 Starts # 6 5 23 34 35 69 Gross Generation MWh 1,499.154 1,580.808 22,198.381 25,278,343 3,557.578 28,835.921 Net Generation MWh 1,406.823 1,482.405 20,259.787 23,149.015 3,536.090 26,685.105 Total Auxiliaries MWh 388.784 394.856 3,844.113 4,769.565 287.891 5,102.043 Auxiliaries purchased MWh 296.453 296.453 1,905.519 2,498.425 266.403 2,809.415 Fuel Gas Used 1000s BTU 13,478,640 17,386,555 153,605,208 184,470,403# 42,103,989 226,574,393# Fuel Oil Used 1000s BTU 8,547,961 3,177,772 105,335,824 117,061,558 5,246,186 122,307,744 Fuel Oil Used Gallons 57,177 21,256 702,281 780,714 37,933 818,647 Total Fuel 1000s BTU 22,026,601 20,564,327 258,941,032 301,531,961# 47,350,176 348,882,138# Net Heat Rate BTU/KWh 15,734 13,900 12,781 13,026 13,391 13,074 Unit Trips # 4 1 1 6 9 15 Capacity Factor % 1.26% 1.33% 3.02% 2.59% 1.38% 2.32% Availability Factor % 97.74% 98.44% 97.91% 98.03% 99.17% 98.54% eFOR % 1.06% 3.33% 0.52% 0.94% 0.0% 0.73% HW Boiler Gas Usage 1000s BTU 16,254,985 16,254,985 Pilot Gas Usage 1000s BTU 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 3/31/07 Actual Starts Factored Starts Fired Hours VanSant 1152 1885.75 3,761.902 Since HGP - Dec 2004 104 218.5 348.699 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 1,263,501 1,207,208 0 (56,293) 1,870,932 0 (663,724) (#6 Fuel Oil) VanSant 115,625 116,848 0 1,223 155,782 0 (38,934) (#2 Fuel Oil) Note: As measured by tank level instruments 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 85,343,345 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 44,648,124 54,148 98.10 100 3.21 0.19 9 2 Dec 5,917.68 56,444,693 517,970 100 100 4.52 17.69 4 9 2007 2006 2007 2006 2007 2006 Jan 285.314 4,156,503 0 100 100 0.22 0 1 1 Feb 569.496 584,278 65,011 100 98.87 0.63 0 3 6 Mar 697.498 205,053 88,151 96.54 90.99 0.53 .21 3 2 Apr 96.53 .01 6 May 100 .09 1 Jun 100 1.07 2 FYTD 24,954.323 179,623,911 665,485 97.68 98.55 2.96 4.99 58 83 * Note: Total Net Generation for all four units combined 10 of 16

4.1 Training During the month of March, all Operations Personnel continue with monthly online PJM training in order to meet PJM training requirements and for further exam preparation. Work continues on finalizing the Operational Readiness Plan which will provide a more structured training and skill set refresher regimen to all Operations and Maintenance Personnel. 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. Lance Berryhill, Operations Supervisor, and Larry Sheranko, Operations Supervisor, took the PJM Generation System Operator Certification Test in March and were told unofficially by the Test Center that they had passed the test. Official notification from PJM is expected in approximately four to eight weeks. The plant now has five members of the plant staff that are PJM Generation System Operator certified. The remaining Plant Supervisors are in the process of scheduling an appropriate time to take the test sometime in the coming months. We continue to train other Operations personnel with the intent of achieving certification too. 11 of 16

5.0 Maintenance During the month of March, the plant maintenance staff continued addressing our backlog of work orders, completed the annual outage inspections on Unit 3 and focused on keeping all units available to our client and PJM. Sixty-six work orders were issued during the month, and seventy work orders were completed during the month. The table below summarizes the monthly work order activities. Work Order Report March- 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 6 6 0 P3 1 17 17 1 P4 8 29 30 7 P5 7 2 5 4 P6 0 0 0 0 P7 5 5 3 7 P8 6 1 3 4 P9 2 1 1 2 P6 - 1 0 0 0 0 P6 - 2 0 0 0 0 P6 - 3 0 0 0 0 P6 – 4 1 3 1 3 P6 – 5 1 0 1 0 P6 – 6 0 0 0 0 P6 – 7 2 0 1 1 P6 - 8 0 0 0 0 PM 18 17 22 13 Totals 33 66 70 29 Note: PM's are included in the priority totals Notable activities during the month include: 1) We completed the annual outage on Unit 3 ahead of the anticipated scheduled duration. During the outage, we received our annual boiler inspection and certificate of inspection from Mr. Steve Smith of the ARISE Insurance Company. 2) During the month, maintenance team members started taking oil samples for our oil analysis program. 3) We met with and provided information to several boiler equipment vendors who had been contacted to help us find ways to lower our NOx emissions to comply with DNREC Regulation 1146 that will take effect in 2009. 4) Members of the maintenance team, operations team and flex team participated in the annual black start test and over-speed trip test on Unit 11 at VanSant Generating Station. 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 6912 3/6/07 Unit 3 cooling tower fan C brings Motor is out for rewind and is expected back by mid April. in substation ground alarm 6946 3/26/07 Semi – Annual calibrations of Test gas and new test regulator on order. Expect to receive confined space monitor early April. 5.1 Training 1) During the month, Phil Marvel received more training on the monthly PM of our sulfur determinator from Ray Wheatley. 2) Members of the flex team received 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 also became 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 3 ran a total of 18.917 hours on March 6 and Unit 11 was operated for 0.3 hours on March 27. Unit 3 was dispatched by PJM and Unit 11 was operated as part of an annual blackstart demonstration for PJM. The Unit 11 overspeed trip devices were also tested at the conclusion of the successful black start test and found to be operating properly. In March, the Unit 3 Annual Outage was completed during which an inspection of the boiler ductwork was conducted. This is an annual event and an increased focus was placed on this particular inspection as a follow up to the Storm Technologies Test Report completed in December 2006 which had identified possible air-in leakage in the air heater section. Several holes were found, one of which was a pretty significant one in the seal separation plate between the air and gas sections of the air heater. The air pre-heater seals and baskets were inspected and found to be in good condition. A large split in the casing of the east side wind box duct to the wind box was found and repaired, which was at approximate Elev. 160’. Also, a hole in the side wall to top wall metal was found and repaired. At the completion of the inspection, work orders to address the found discrepancies, all of which were corrected or repaired prior to the end of the outage. An inspection of the Forced Draft Fans revealed that the 3B Forced Draft Fan Outlet Dampers were out of synchronization, in both the open and closed positions. They were repaired and stroked. The condenser was flooded to check for leaking tubes, expansion joint and piping. One leaking tube on the top west side of the condenser was plugged. In addition to normal preventative maintenance and inspections performed on unit specific equipment during a boiler annual outage, the neutralizing pit was pumped down, the liner was inspected and the pit cleaned. A new servo for the turbine control valve was replaced and tested for operation, due to problems with load swing during unit operation earlier in the month. Other Events 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. A site visit by ISG, the MAXIMO vendor was slated for March 1, 2007 but they cancelled out at the last minute. They have provided us with internet access to view some of abilities of the upgraded CMMS software but access is limited which would help allow us to determine exactly how the software upgrade could help us. We are looking at other options with ISG as we continue to look for ways to improve our plant processes. We continue to work with General Physics to set up the GPILearn on-line training system for the plant. We have provided them with preliminary information on plant personnel so that individual training accounts could be set up for each employee and so that supervision is able to monitor their training plan. Training on the system for selected plant management personnel is scheduled for early April, 2007. 14 of 16

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 a Delaware Regulation 1146 Compliance Plan for Unit 3. A number of options regarding Unit 3 presented during the meeting by the City of Dover are on the table for the DNREC to consider. A follow up meeting with DNREC is to be scheduled for an April, 2007 date. In our efforts to continuously improve, we have been conducting research on 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. 15 of 16

7.0 Summary of NAES Performance to Date Measure Month Year to Date YTD Incentive eFOR 0.0% 0.73% $65,400 Budget (Actual vs. Budget) 68.69% 84.14% $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 $125,400 16 of 16