1. XENERGY Executive Forum May 18, 2001 Irene Prezelj
Ohio Market Update
XENERGY Executive Forum
May 18, 2001
Irene Prezelj

2. Presentation Overview
Ohio Restructuring Highlights
Utility-Specific Information
MSG From FirstEnergy
The First Four Months -- What’s Happened?
Marketing Activity
Competitive Suppliers/Offers
Government Aggregation
Switching Activity

3. Ohio Restructuring Highlights
SB3 mandated 5% reduction in generation rates for residential customers
All OH utilities required to induce at least 20% switching by customer class (mWh) by 2003
Municipals utilities and electric co-ops are not subject to deregulation laws
Allows for aggregation (opt in OR opt out)
Competition began January 1, 2001

4. Utility-Specific Information
FirstEnergy
Market Support Generation (1,120 MW)
Incentives by class ranging from 15% to 45%
Another 1,120 MW treated as native load if transported from more than one wheel away
Cincinnati Gas & Electric
Incentives added to shopping credits for FIRST 20% of switchers only
AEP
Shopping incentives for CSP residential customers

5. Utility Specific Information
Dayton Power & Light
Short market development period, lasting only through 2003
Monongahela
Variable market development period, depending on rate schedule

6. MSG From FirstEnergy
Unique incentive for competitive suppliers in FirstEnergy service territories (CEI, TE, OE)
FE made 1,120 MW available on a first-come, first-served basis
TREMENDOUS!!! interest by supplier community
Process ongoing

7. The First Four Months
“A slowly emerging marketplace that will in all likelihood take three to five years or more to deliver the full benefits of retail competition.”
Robert S. Tongren
Ohio Consumers’ Counsel
April 3, 2001
Certified Suppliers
76 electric suppliers
Of these, 36 market to residential customers
30 government aggregators

8. Marketing Activity Mostly concentrated in FE service territories
Contingent upon MSG supply
Heightened activity during Fall time frame
Suppliers in FE areas: Enron, Strategic Energy (SEL), Advantage Energy, Exelon, Allegheny Energy, Shell Energy, NewEnergy, AES Power Direct, Dominion East Ohio Energy, FirstEnergy Services
No suppliers marketing to Dayton Power & Light, Monongahela customers

9. Marketing Activity Current offers: Very limited C&I activity statewide
The New Power Company -- residential offer in AEP, Cinergy areas
FirstEnergy Services -- residential offer in FE service territories

10. Government Aggregation
Allows local government bodies to shop for suppliers; requires a majority vote in a general election
November ballot issues (only 5 failed)
May ballot issues (1 failed)
136 communities = 1+ million households
Most in NE OH and Toledo area
Northwest Ohio Aggregation Council (NOAC) in Toledo -- No competitive bids

11. Government Aggregation
Largest Aggregation in Nation -- February, 2001
Northeast Ohio Public Energy Council (NOPEC)/Green Mountain deal
94 Northeast Ohio communities/400,000 customers
5-year contract for cleaner energy (98 percent from natural gas/2 percent from renewable energy sources)
Savings claim of $10 to $12 million over five years ($1-$2 per month, per customer)

12. Government Aggregation
Other communities “going it alone”
Shell Energy Services: Medina, Defiance, LaGrange, Sandusky, Stryker, Alliance
Allegheny Energy Supply: Aurora, Stow, Silver Lake, Munroe Falls, Parma
FirstEnergy Services: Cleveland Heights, Barberton
Several others working with consultants

13. Switching Activity -- April 2001

14. Wrap-Up Competition Developing Slowly Fewer Choices (post-MSG)
Limited Savings