1. Allegheny Power’s Energy Efficiency & Conservation Programs Central PA ASHRAE Chapter Harrisburg April 20, 2010

2. Program background Key dates and targets Basic program details Review PA PUC approved programs Presentation Objectives

3. Signed into law on October 15, 2008: −Created state-wide Energy Efficiency and Conservation Program −Applies to all EDC’s with > 100,000 customers Requires EDC’s to reduce electric consumption by: −1% by May 31, 2011 −3% by May 31, 2013 Requires EDC’s to reduce peak demand by: −4.5% by May 31, 2013 −Annual system peak demand in the 100 hours of highest demand PA Act 129: Background Information

4. Smart Meter Implementation Plan filed August 14, 2009: −Smart meter technology is furnished:  Upon request from a customer that agrees to pay cost of smart meter  In new building construction  In accordance w/ depreciation schedule not to exceed 15 years By January 1, 2011 (for AP) … Submit to PAPUC one or more Proposed TOU Rates PA Act 129: Background information (cont)

5. Offset expected electricity price increases forthcoming In PA, generation rates that have been capped since 1997 expire 1/1/2011 Customer Expectations Customers want more control over electric bills Decrease need for additional generation and transmission lines TrAIL/ PATH projects proposed by Allegheny Power Purpose of EE & C programs

6. Key Dates and Targets Jul. 1, 2009 Energy Efficiency & Conservation / Demand Response (EE&C/DR) Plans Filing Aug. 14, 2009 Filing Date for Smart Meter Technology Procurement and Installation Plan (SMIP) Oct. 23, 2009 Filing Approved (In Part) Jan. 1, 2011 Filing Date for TOU Rates and RTP Plans May 31, 2011 1% Reduction in Energy Consumption May 31, 2013 3% Reduction in Energy Consumption May 31, 2013 4.5% Reduction in Demand 209,387 MWH 628,160 MWH 157 MW Completed

7. EE & C Plan must be cost-effective (benefits greater than costs) Programs must reach all customer classes ( residential, commercial, industrial & institutional) !0% of the energy reductions must be from institutions (gov’t, schools, universities, & non-profits) Program costs must be allocated to customer classes who incur the benefit Allegheny Power is subject to a penalty of $1million to $20 million for not meeting targets PA Act 129: Basic Program Details

8. The cost of the overall four year plan is capped at 2% of 2006 utility’s revenues….$94.6 million for Allegheny Power The cost of the Plan will be recovered from customers. Approximate cost is: -$2.22 per 1000 kwhs for residential customers -$1.12 per 1000 kwhs for small-sized commercial business -$0.71 per 1000 kwhs for medium-sized commercial business Full website launch of all programs by April 1 st. Web-site will contain all details and applications for incentives PA Act 129: Basic Program Details (cont)

9. Residential Programs Energy Star Appliances QualificationsRebate AmountLimit per Calendar Year Super Efficient DishwasherEnergy Star$25 1 per Household Super Efficient Clothes WasherEnergy Star - 200 kWh or less /year$75 1 per Household Electric Clothes DryerWith Moisture Sensor$25 1 per Household CFLsAll Qualify $1.50 per single pack or $3 per multi pack Total rebate limit up to $25.00 Room Air ConditionerEnergy Star$25 3 per Household Refrigerator with Recycling*Energy Star - 10 to 30 Cubic Feet$50 1 per Household Freezer With Recycling*Energy Star - 10 to 30 Cubic Feet$35 1 per Household Central Air Conditioner Energy Star - SEER 14.5 and above w/Programable Thermostat, must be installed by Licensed HVAC Contractor $100 with SEER 14.5 $150 with SEER 15 $200 with SEER 16 or above 1 per Household Heat Pump Energy Star - SEER 14.5 and above w/Programable Thermostat, must be installed by Licensed HVAC Contractor $100 with SEER 14.5 $150 with SEER 15 $200 with SEER 16 or above 1 per Household

10. Residential Programs (cont) Recycling Programs Qualifications Rebate amount limit per calendar year Room Air Conditioner Working unit (New purchase not required)$25 3 per Household Refrigerator Working unit (New purchase not required)$35 1 per Household Freezer Working unit (New purchase not required)$35 1 per Household Home Performance Programs On-LineAll Homes QualifyFree 1 per Household Check-upAll Homes Qualify$50 1 per Household ComprehensiveAll Homes Qualify$50 1 per Household Low-Income175% of Poverty LevelN/A 1 per Household

11. C & I Programs Lighting QualificationsRebate AmountLimits T5Retrofit Only $ 25 T8Retrofit Only (2x4 fixtures) $ 14 LED Exit SignsRetrofit Only $ 15 Occupancy SensorsWall Plate $ 25 HVAC Unitary A/C15 SEER or better, Retrofit Only$ 35/ton Unitary Heat Pump 15 SEER or better, Retrofit Only$ 75/ton Motor Drives Variable Frequency Drives - Thru Participating Vendors - 25-200 Horsepower - 6 pulse - In-line reactor - For Pumps, Fans, or other variable loads - Motor operating hours =>2500/year 50% of equipment cost recovery =>50HP or $3,000 must be pre- approved by AP Custom Custom TechnologyPer Allegheny Power Pre-Approval, 1 - 2.5 mWh's per year minimum/maximum customer size or PMs approval Up to 25% of project cost $100,000 Per Project not to exceed 25% of total project cost. Total Annual Program Cap is $1,000,000 Custom ApplicationPer Allegheny Power Pre-Approval, 2.5 mWh's per year minimum customer size or PMs approval Up to $10,000 per Audit, Up to 50% of project cost $500,000 Per Project not to exceed 50% of total project cost. Total Annual Program Cap is $1,500,000

12. Institutional - Nonprofit Lighting QualificationsRebate AmountLimits T5Retrofit Only $ 25 T8Retrofit Only (2x4 fixtures) $ 25 LED Exit SignsRetrofit Only, Equipment Only100 % of cost LED Traffic SignalsRetrofit Only $ 30.67Per bulb replaced Occupancy SensorsWall Plate $ 25 CFLsRetrofit Only, Equipment Only100 % of cost HVAC Unitary A/C15 SEER or better, Retrofit Only$ 35/ton Unitary Heat Pump 15 SEER or better, Retrofit Only$ 75/ton Motor Drives Variable Frequency Drives - Thru Participating Vendors - 25-200 Horsepower - 6 pulse - In-line reactor - For Pumps, Fans, or other variable loads - Motor operating hours =>3600/year 50% of equipment cost recovery =>50HP or $3,000 must be pre- approved by AP Custom Custom TechnologyPer Allegheny Power Pre-Approval, 1 - 2.5 mWh's per year minimum/maximum customer size or PMs approval Up to 25% of project cost $100,000 Per Project not to exceed 25% of total project cost. Total Annual Program Cap is $1,000,000 Custom ApplicationPer Allegheny Power Pre-Approval, 2.5 mWh's per year minimum customer size or PMs approval Up to $10,000 per Audit, Up to 50% of project cost $500,000 Per Project not to exceed 50% of total project cost. Total Annual Program Cap is $1,500,000

13. . Please contact us: AskPAAct129@AlleghenyPower.com See Allegheny’s Act 129 website at: www.alleghenypower.com and click on the Watt Watchers logo. Select PA and Act 129 link. www.alleghenypower.com