Energy Company Obligation Workshop CAN Conference 5 th February 2014

Why?  To meet the Governments political need to reduce UK householders energy bills by an average of £50 per household. 2

Proposed CSCO Changes 3 CSCO Pre Changes 6.8Mtn to 03/15 Lowest 15% LSOAs 40k SWI 150k CWI 30k LI CSCO post changes to 03/15 Same 6.8Mtn Lowest 25% LSOAs SWI delivery unexpected / unlikely CSCO 03/15 to 03/17 Same levels at 6.8Mtn As above – predominately CWI and LI Opportunity for DH support

Proposed CSCO Rural Changes 4 Pre Changes 15% of CSCO target = 1Mtn in populations of <10k Recipient must be in the AWG i.e. Qualifying Benefits criteria Post Changes to 03/15 Same target Carbon Saving of 1Mtn Still populations <10k However not linked to AWG but the lowest 25% LSOAs in populations <10K CSCO R 03/15 to 03/17 As above 1Mtn in lowest 25% LSOAs in populations < 10k

Proposed CERO Changes 33% reduction in volume, with “soft” 2015 target, extended until March CERO pre change 21Mtn carbon reduction Primary measure SWI/HTTCs CERO to 03/15 33% reduction i.e. 13.8Mtn No gateway measure inc. CWI / LI / DP / DH CERO 03/15 to 03/17 Same rate of delivery 13.8Mtn + factor of 1.1 to carbon not delivered to 03/15 Measure volume c.107k SWI c.256k HTTCWI c.116k HTTCWI/LI Measure Volume SWI Minima of 100k through soft target 3/15 to 3/17 Leaving c.23Mtn to be deployed through lower cost measures i.e. CWI / LI / DP / support for DH

E.ON’s approach We have to substantially reduce ECO cost in line with Government requirements however our approach will be 1)To fully complete all obligations and sub obligations on time 2)To deliver at as low a cost as is practical and pass this back to E.ON supply customers 3)To renegotiate all existing contracts timeframe, volume and/or measure type to fit into new world 4)To provide as much continuity and security to partners and installers as possible 6

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