1. PJM©2012 1 www.pjm.com PJM as Part of the Eastern Interconnection KEY STATISTICS PJM member companies 750+ millions of people served 60 peak load in megawatts 163,848 MWs of generating capacity185,600 miles of transmission lines 65,441 GWh of annual energy 832,331 generation sources 1,365 square miles of territory214,000 area served 13 states + DC Internal/external tie lines 142 26% of generation in Eastern Interconnection 28% of load in Eastern Interconnection 19% of transmission assets in Eastern Interconnection 21% of U.S. GDP produced in PJM As of 1/4/2012

2. PJM©2012 2 www.pjm.com Reliability Resource Adequacy: –System capacity Transmission Security: –Energy & services where needed –Managing retrofit outages Location, Location, Location: –Transmission related issues –Encourage resources where needed –Regulation, black start, congestion management

3. PJM©2012 3 www.pjm.com Capacity Revenue NeededPJM RTOMAACRest of PJM < ½ Net CONE 38,33412,63425,700 ½ Net CONE – Net CONE 14,1472,90811,239 > Net CONE 11,0513,1947,857 Source: PJM Report, Coal Capacity At-Risk for Retirement in PJM: Potential Impacts of the Finalized EPA Cross State Air Pollution Rule and Proposed National Emissions Standards for Hazardous Air Pollutants, August 2011 At-Risk Generation Nearly 25 GW coal generation at risk based on economic analysis Note: CONE is the Cost of New Entry (Simple Cycle Combustion Turbine)

4. PJM©2012 4 www.pjm.com Generation Resource Retirements Over 16,400 MW of Pending Deactivations (~13,800 MW since 11/2011)

5. PJM©2012 5 www.pjm.com Generation Retirement Timeline

6. PJM©2012 6 www.pjm.com Capacity Resources: In Transition

7. PJM©2012 7 www.pjm.com Shift in Demand Response Capacity

8. PJM©2012 8 www.pjm.com Capacity Auction Clearing Prices, $/MW-Day

9. PJM©2012 9 www.pjm.com Generation: In Transition

10. PJM©2012 10 www.pjm.com Environmental Retrofit Outages and Typical Maintenance Outages Retrofit Outages (MW) Typical Maint Outages (MW) 2012 Winter Period (WP)018000 Spring Maintenance (SM)190042500 PPM0500 Fall Maintenance (FM)240035000 Winter Period (WP)018000 2013 Winter Period (WP)470018000 Spring Maintenance (SM)430042500 PPM700500 Fall Maintenance (FM)180035000 Winter Period (WP)60018000 2014 Winter Period (WP)180018000 Spring Maintenance (SM)440042500 PPM0500 Fall Maintenance (FM)640035000 Winter Period (WP)330018000 2015 Winter Period (WP)80018000 Spring Maintenance (SM)640042500 PPM500 Fall Maintenance (FM)230035000 Winter Period (WP)190018000 2016 Winter Period (WP)210018000 Spring Maintenance (SM)510042500 PPM500 Fall Maintenance (FM)290035000 Winter Period (WP)90018000 2017 Winter Period (WP)80018000 Spring Maintenance (SM)290042500 PPM0500 Fall Maintenance (FM)40035000 Winter Period (WP)018000 2018 Winter Period (WP)100018000 Spring Maintenance (SM)260042500 PPM0500 Fall Maintenance (FM)40035000 Winter Period (WP)018000 *Some retrofit outages may be included in typical maintenance outages.

11. PJM©2012 11 www.pjm.com FERC Order 1000: Public Policy Considerations