1 Potomac Electric Power Company Case 9155 & Delmarva Power & Light Case 9156 EmPOWER MARYLAND DRAFT NON-RESIDENTIAL ENERGY EFFICIENCY AND CONSERVATION PORTFOLIO Maryland Stakeholder Meeting April 15, 2011

2 Draft Non-Residential Portfolio Overview Design Philosophy: Support EmPOWER goal achievement Create a suite of programs that provides all non-residential customers opportunities to increase efficiency and lower their energy bill. Build on 2009 – 2011 experience – Keep what worked – Fix what didn’t. Target Market: All non-residential customers. Portfolio Programs: Existing Buildings (formerly Prescriptive) Custom Commissioning and O&M New Construction Small Business Master-Metered Multi-Family Peer Group Comparison New Program Highlights LED Lighting HVAC now in Existing Buildings Program Prescriptive chillers to 1,000 ton single chiller installations in Existing Buildings Program New Construction Program Direct-install Small Business Program Master-Metered Multifamily Program

3 Non-Residential Portfolio Overview Factors Supporting Portfolio Achievements: Increased Incentives – Provide additional market adoption Increased Program Level Marketing/Outreach – Enhanced customer awareness of the programs AMI Deployment/Customer Education – Small customers will have a better understanding of their energy usage and savings opportunities Increased Staffing – Additional utility staff for benchmarking, auditing and customer technical assistance. Additional implementation staff for new programs Improving Economy – More available capital

4 Non-Residential Portfolio Overview – Summary Data

5 Portfolio Overview - Assumptions Incentive Philosophy: Incentives must be sufficient to move the market Aligned with other Maryland programs where logical to do so Flexible over time to adapt to implementation results and codes and standards, technology, market and economic changes Impacts Estimates: SAVINGS ESTIMATES – Based on Mid-Atlantic TRM, PHI and Maryland implementation and evaluation experience PENETRATION/ADOPTION RATES - Combination of PHI and Maryland implementation experience and pay-back adoption rate modeling Avoided Costs and Economic Factors: AVOIDED ENERGY COST – Based on PHI SOS rates AVOIDED CAPACITY COSTS – PJM auction values tapering to Net CONE

6 Existing Buildings Program General Design Philosophy Expedited, simple solution encourage existing non-residential customers to purchase efficient technologies that can produce verifiable savings. Eligible Market: All non-residential customers Proposed Measures: CFLs, High Performance T8 (HP-T8) and T5, high intensity fluorescent and pulse start metal halide for one-for-one lighting fixture upgrades. - $10 - $35/fixture Lighting occupancy sensor and day lighting control - $25 – $75/control LED exit signs - $15/sign LED replacement lamps and lighting fixtures $25 - $35/lamp, $60 - $250/fixture Outdoor lighting on private poles or mounted on the building - TBD LED traffic signals - $25/lamp High efficiency unitary HVAC equipment - $50 - $100/ton Geothermal Heat Pump systems $100 - $250/ton High efficiency, single chiller applications up to 1,000 tons - $10 - $25/ton base & $2 - $8/ton performance incentive VFDs in HVAC applications - $600 – $7,000 depending on HP Refrigeration measures – Reach-in & Ice-makers - $75 - $500, other $3 - $75/unit Vending machine occupancy controls - $30 - $75/control Incentive bonus (10%) for multiple measure installation projects

7 Custom Incentive Program General Design Philosophy: Motivate customers to select high efficiency options when making purchasing decisions by providing incentives for cost-effective energy efficiency measures which are customized to the specific needs of the customer. Target Market: All non-residential customers Proposed Measures: Electrical energy savings equipment and system improvements not eligible in the Existing Buildings Program including; Large air conditioning equipment and chillers, Industrial process improvements, Compressed air system improvements Energy management systems, Improvements which improve the efficiency of an energy consuming system rather than a single piece of equipment, Audits and targeted efficiency opportunity studies. Incentives: Up to $0.16/annual kWh saved up to 50% of installed cost for energy efficiency measures Co-funding of pre-approved studies – 75% of study cost up to $15,000

8 Building Commissioning and O & M Program General Design Philosophy: Motivate and assist non-residential customers to reduce energy use through operation and maintenance improvements in their facilities. Target Market: All non-residential customers Program Elements: Retrocommissioning studies to assist customers in developing retro-commissioning projects in large facilities (>75,000 sq. ft.) Targeted O&M improvements such as HVAC performance tune-ups in smaller facilities Facility operations staff O&M training and occupant energy awareness initiatives Benchmarking Initiative using ENERGY STAR Portfolio Manager to assist customers to identify energy savings and program participation opportunities. Incentives: Retro-commissioning studies – Up to $30,000 per building Targeted O&M – TBD Operator Training – 80% of course tuition up to $1,000 Occupant Awareness – 50% of cost up to $5,000 per building Benchmarking – No additional cost for benchmarking and audit, additional 10% incentive bonus for multiple measure installation

9 New Construction Program General Design Philosophy: Motivate non-residential customers to achieve significantly better than code required energy performance in new building, facility addition and major renovation projects. Target Market: All non-residential customers build, adding to or renovating a building Program Elements: Comprehensive Building Design – Providing design assistance and incentives for implementing and commissioning whole-building energy efficient designs Prescriptive Measures – allows customers to choose equipment from a pre-qualified list of measures and receive an incentive. Custom Measures - allows customers to qualify unique measures that are not on the prescriptive list, and receive an incentive for their installation. Incentives: Comprehensive Design incentive – Design team incentive based on building size Enhanced Commissioning – 50/50 cost sharing up to $20,000 per building Prescriptive Measures – Similar to Existing Buildings incentives with appropriate code related adjustments Custom Measures/Comprehensive Design installation incentives – up to $0.16/kWh 10% incentive bonus for multiple measure installation.

10 Small Customer Program General Design Philosophy: Provide an expedited, simple solution to motivate and encourage small, non-residential customers to install energy efficient technologies that produce energy savings. Target Market: All non-residential with peak demands in the range of 75 kW Program Elements: No additional cost audit Direct installation of selected lighting measures by program contractors Enhanced incentives for other prescriptive measures such as refrigeration and VFDs. Financing is being investigated for the customer’s portion of the project cost Incentives: Direct install lighting measures – 90% of agreed installation cost Enhanced Incentives – up to 30% above Existing Buildings incentive levels.

11 Multi-Family/Master Meter Buildings Program General Design Philosophy: Motivate the owners of master metered multi-family residential properties to select high efficiency options when making purchasing decisions by providing incentives for cost-effective energy efficiency measures. Target Market: All master-metered residential accounts Program Elements: Qualified appliances and HVAC equipment Refrigerator/Freezer recycling Incentives: ENERGY STAR® qualified Refrigerators -- $50 ENERGY STAR® qualified Room Air Conditioners -- $25 Hot Water Heaters with an energy factor (EF) of.93 or greater -- $20 ENERGY STAR® qualified Clothes Washers -- $50 ENERGY STAR® qualified Heat Pump Water Heaters -- $250 Qualified Central Air Conditioners and Heat Pumps -- Same as Non-Residential Existing Buildings Program

12 Small Non-Residential Peer Group Comparison Program Program Description: The primary objective is to increase customer awareness: of their energy consumption, provide comparative data relative to similar businesses, and drive awareness of other savings opportunities in the EmPOWER portfolio. Target Market: Small non-residential customers equipped with smart meters. Consumer Participation: Customers with AMI meters installed will receive several mailings per year, while web presentment of data will be from the start of enrollment. Participants can opt out at any time of either the program or the mailings if they choose. Implementation: The primary message conveyed to customers is their monthly consumption relative to their peer group. Using behavioral messaging, the customer is incented to reduce consumption through increased awareness of their energy usage. Savings: Expected to be 1-3% of total consumption, depending on program specifics.

13 Thank You