1. Smart Grid Tariff Changes
Jason Manuel
Director – Pricing & Tariffs
August 12, 2009

2. Agenda Smart Energy Pricing Why SEP? Peak Time Rebates
R-SEP rate schedule components
Electric and Gas trackers
Smart Grid Charge components
Allocations

3. Why SEP?
Note: The first block contains 110 hours with an average LMP of $200 and a range of $84 to $1,046

4. Peak Time Rebates
The primary benefits of Smart Energy Pricing relate to wholesale capacity and energy revenues
BGE is able to monetize peak load reductions in the PJM Capacity and Load Markets and pass these direct revenues to customers in the form of Peak Time Rebates (PTRs)
All customers benefit from lower overall capacity and energy prices going forward, along with avoided transmission and distribution capital expenditures
Participants can earn PTRs during company-declared “critical days” and PJM- declared emergencies
For non-emergency events customers will be notified by 6pm the prior day through various media forms
PTRs estimated at $1.25/kWh, based on the value of capacity as represented by Net CONE in the PJM RPM applicable to SWMAAC

5. Peak Time Rebates Calculation

6. R-SEP Residential Electric Rate Schedule
Effective in 2012, once underlying communications and billing systems in place
Will combine existing residential rate schedules (R, ES, RL-1, and RL-2) into one rate schedule (R-SEP)
Existing rate schedules will phase out once AMI is implemented in customer’s geographical area
Consists of the following rates:
Peak Time Rebate during summer “critical days” and PJM emergencies
Time-of-Use generation rates for 2 time periods
On-peak: Non-holiday weekdays, June – September, 2 – 7 p.m.
Off-peak: All other times
Customer Charge
Delivery Service Charge
Transmission Charge (incorporated in generation rate)

7. Smart Grid Charge
Separate riders for both electric and gas lines of business
Prospective rate with annual true-up, effective January 1, 2010
Rider includes the following components:
Program costs
Depreciation and amortization of assets over 6 – 22 years
Pilot program costs amortized over 5 years
Return on net investment
Ongoing costs (O&M, PTRs, property taxes, etc.)
Program benefits - serve to reduce the charge
Wholesale capacity revenues
Wholesale energy revenues
Meter reading savings
Program incentives
Based on existing Rider 15 structure

8. Allocations within Smart Grid Charge
Allocations between electric and gas
Direct assignment of meter costs to electric and gas trackers
Direct assignment of PTRs, wholesale capacity and energy revenues to electric tracker
All common costs allocated using BGE’s long-standing Modified Massachusetts Methodology
Allocations between customer classes
All electric costs allocated based on the relative proportions of capacity Peak Load Contribution (PLC), excluding PTRs and the capacity and energy revenues monetized in the PJM markets (100% to residential)
All gas costs allocated based on number of meters

9. Questions?