Potomac Edison Preliminary Energy Efficiency and Conservation Programs 2012-2014 April 15, 2011

Agenda Background Program Development Preliminary Non-Residential Programs Program Overview

Background: Current Programs and Performance

Program Development Programs and Measures were identified based on existing EmPower and FirstEnergy program experience and Stakeholder proposals The following proposed Non-Residential Programs are initial drafts; development efforts are ongoing: Current projections are falling short of the 2015 EmPower Maryland goals The Company is working hard to leverage program successes of FirstEnergy affiliates as we continue to refine 2012 – 2014 Empower MD Programs Modeling assumptions continue to be refined and validated (participation and growth rates, energy and demand savings, cost inputs, budgetary values, etc.) Potomac Edison looks forward to working collaboratively to improve the 2012 – 2014 Empower MD Programs

Preliminary Non-Residential Programs: Small Commercial & Industrial Equipment Program Description A program that provides incentives to commercial and industrial customers for the installation of cost effective, high efficiency standard and non-standard measures. Eligible Measures Include: HVAC (Air Conditioner, HVAC Maintenance) Lighting (High Efficiency Lighting including CFLs, T8, T5, LED Exit Signs, LED Pedestrian Signals, LED Vehicular Signals, Occupancy Sensors, Street Lighting) Energy Star Products (Solid Door Freezers/Refrigerators, Ice Machines, Steam Cookers) Water Heater (Energy Efficient, Heat Pump) MasterMetered MultiFamily Energy Efficiency Kits (CFLs) Food Service (Direct Install and Individual measures) (Strip Curtains, Pre-Rinse Sprayers, Refrigerator/Freezer Efficiency Measures, Vending Machine Controls, Programmable Thermostat, CFLs, LED Exit Signs) Variable Frequency Drives Custom Incentives Implementation Strategy The Company intends to contract with one or more implementation contractors to market and implement the program, and track program data. The Company envisions that various delivery channels will be employed over the life of the program based on target customers, new opportunities, changing conditions, etc.

Preliminary Non-Residential Programs: Large Commercial & Industrial Equipment Program Description A program that provides incentives to commercial and industrial customers for the installation of cost effective, high efficiency standard and non-standard measures. Eligible Measures Include: Lighting (High Efficiency Lighting including T8 and T5, Occupancy Sensors) Variable Frequency Drives Custom Incentives Implementation Strategy The Company intends to contract with one or more implementation contractors to market and implement the program, and track program data. The Company envisions that various delivery channels will be employed over the life of the program based on target customers, new opportunities, changing conditions, etc. Contingent on timing of regulatory approvals, the Company proposes to begin communications related to the new C&I programs in 4Q 2011 to allow C&I customers time to budget for retrofit projects in the 2012 year (task is dependent on plan approval in 4Q of 2011).

Preliminary Non-Residential Programs: Commercial & Industrial Demand Response Program Description A demand response program with the objective to contract for demand response capability from PJM Curtailment Service Providers (CSPs) or customers acting as a PJM CSP who can reduce demand during peak load periods. The program will support the continuation and/or expansion of the PJM Load Response Programs while supporting attainment of the EmPower demand response objectives. Eligibility/Target Market Existing commercial, industrial, and governmental customers of Potomac Edison in MD with curtailable load of at least 100 kW. Implementation Strategy The Company will enter into agreement(s) with qualified PJM CSPs based on a RFP process for contracted PJM capacity (MW) for annual performance periods. Annual performance periods will be targeted for the 2012/13 and 2013/14 PJM planning years.

Program Overview

Questions

Appendix

Program Summary Information Preliminary Program Impacts (2012-2014)

Program Summary Information Preliminary Program Budgets (2012-2014)

Program Summary Information Preliminary TRC Results

Program Summary Information Preliminary Incentives