1. Counterbalancing Rising Rates: Managing the Customer Impact – Ohio and Pennsylvania
Tom Clark
Vice President, Customer Service & Service Area Development
2008 Marketing Executives Conference
October 11-14, 2008
Meeting Ohio’s New Energy Efficiency Mandates
2008

2. Meeting Ohio’s New Energy Efficiency Mandates
FirstEnergy Corp.
Headquartered in Akron, Ohio
Seven electric utility operating companies
5th largest investor-owned electric system in the U.S.based on 4.5 million customers served
18 generating plants; approx. 14,200 MW
ATSI: FirstEnergy subsidiary that owns transmission assets within utilities’ service area
14,500 employees
Ranked 209 among Fortune 500 companies in 2008
2008 Marketing Executives Conference
October 11-14, 2008
Meeting Ohio’s New Energy Efficiency Mandates
2008

3. FirstEnergy Summary Profile
Toledo Edison 313,000 2,300
Ohio Edison 1,040,000 7,000
The Illuminating Co 755,000 1,600
Penelec 589,000 17,600
Penn Power 159,000 1,100
Met-Ed 546,000 3,300
JCP&L 1,087,000 3,200
Total 4,490,000 36,100
Customers*
Sq. Miles
* As of Dec. 31, 2007
FirstEnergy Service Areas
2008 Marketing Executives Conference
October 11-14, 2008
Meeting Ohio’s New Energy Efficiency Mandates
2008

4. Stable Rates for Illuminating Company, Toledo Edison & Ohio Edison Customers
Since 1996
Toledo Edison
Since 1996
Ohio Edison
Since 1990
2008 Marketing Executives Conference
October 11-14, 2008

5. Electricity Use Increasing for CEI, TE & OE Customers
21%
41%
2008 Marketing Executives Conference
October 11-14, 2008

6. Cost Increases – Last Five Years
107%
109%
176%
The cost of the materials utilities must use to deliver the electricity provided customers has skyrocketed during the past five years.
* Sources: Handy-Whitman Index of Electric Utility Equipment; Bureau of Labor Statistics Producer Price Index for select components.
2008 Marketing Executives Conference
October 11-14, 2008

7. Ohio Legislation Background
Under Ohio’s restructuring law (SB 3), generation rates fixed from
Fixed rates were scheduled to end December 31, 2005, but extended through 2008 under Rate Stabilization Plan
SB 221 was a legislative response to:
Concerns about sharp increases in electric generation prices seen in states with expiring price caps
Desire to encourage alternative energy and energy efficiency
Includes mandates for:
Renewable Energy:
At least 12.5% of total portfolio by 2025, with at least half generated by facilities in Ohio
0.5% from solar by 2025
Energy Efficiency: 0.3% of utility’s average annual kWh sales, increasing to 22.2% by end of 2025
Demand Reduction: 7.75% by 2018
2008 Marketing Executives Conference
October 11-14, 2008

8. Electric Security Plan Customer Benefits
Overall averages – differs by rate schedule and customer usage
All-electric customers
Industrials
High / low use residential customers
Managed price increases
5.32% in 2009
4.01% in 2010
5.99% in 2011
Modest, managed price increases for most residential customers
For OH customers using 750 kWh per month:
$0.51 in – Decrease
$3.17 in – Increase
$2.77 in – Increase
2008 Marketing Executives Conference
October 11-14, 2008

9. Ohio’s New Energy Efficiency Mandate
Total Reduction in Electricity Use:
From 0.3% in 2009 to 22.2% in 2025
22.2% reduction in current demand is equivalent to Beaver Valley units
1 and 2
2008 Marketing Executives Conference
October 11-14, 2008
Meeting Ohio’s New Energy Efficiency Mandates
2008

10. Energy Efficiency and FirstEnergy: An Overview
Objective
Adopt cost-effective strategies that enable customers to better manage their energy use while providing the company opportunities to further improve the efficiency of its operations
Key Strategies
Provide solutions to customers – from controlling energy costs to helping customers better understand billing and payment issues
Change customer usage behavior to help achieve sustained energy savings and peak load reduction
Design programs so results can be accurately and reliably tracked
2008 Marketing Executives Conference
October 11-14, 2008
Meeting Ohio’s New Energy Efficiency Mandates
2008

11. Win-Win for Customers and Company
Benefit through the more efficient use of electricity
Company
Encourage more efficient use of system by shifting customer demand to off-peak periods and improving operating efficiencies on energy delivery systems
2008 Marketing Executives Conference
October 11-14, 2008
Meeting Ohio’s New Energy Efficiency Mandates
2008

12. Overview of Energy Efficiency Potential
Significant efficiency opportunities – from generation to end-use
Generation
Transmission
Distribution
End-Use Utilization
~70% loss National Average
~3% loss
~5% loss
~88% loss (incandescent light example)
Renewables
Fuel
Electricity
Electricity
Electricity
100
~30
~29
~28
Nuclear
Coal
Source: EPRI
2008 Marketing Executives Conference
October 11-14, 2008
Meeting Ohio’s New Energy Efficiency Mandates
2008

13. Meeting Ohio’s New Energy Efficiency Mandates
Load Control Programs
Programmable thermostats
Installed free to residential customers in Ohio; 10,000 customers by end of 2008
Remote temperature adjustment during periods of high demand
2008 Marketing Executives Conference
October 11-14, 2008
Meeting Ohio’s New Energy Efficiency Mandates
2008

14. Meeting Ohio’s New Energy Efficiency Mandates
Customer Education
Sustainable energy savings start with customer education
Change behaviors through:
Energy-saving tips: online and print
Energy efficiency seminars
Customer energy inventory audits
Weatherization for low-income households
Online Energy Calculator and other Web-based tools
Feedback through customer research
2008 Marketing Executives Conference
October 11-14, 2008
Meeting Ohio’s New Energy Efficiency Mandates
2008

15. Pennsylvania: Met-Ed/Penelec Voluntary Pre-Payment Plan
Up to 9.6% of bill
Pre-payments would earn 7.5% interest
Set to begin in 2009, would reduce bills
2008 Marketing Executives Conference
October 11-14, 2008

16. It All Comes Back to the Customer
Offering moderate price increases
Promoting the wise use of our product
Serving as a trusted source of information
2008 Marketing Executives Conference
October 11-14, 2008