1. GreenUp and the Competitive Opportunities Plan February 8, 2005 Albany Collaborative Session

2. Objectives  Maintain and Enhance GreenUp Program Offerings in Competitive Market  Maintain Consistency with New York Reporting and Conversion Regulations  Minimize Overhead and Information System Costs Associated with Program Implementation

3. GreenUp Today  Provided to Niagara Mohawk Commodity Customers only  GreenUp Supplier Procures Renewable Energy and Markets to Retail Customers  Niagara Mohawk Reports Energy on the GreenUp Supplier’s Behalf in Lieu of Spot Market Purchases—the Conversion Transaction  Niagara Mohawk Reports GreenUp Sales and Purchases to the Commission; Streams Sales to the GreenUp Supplier  GreenUp Supplier Issues Disclosure Label

4. GreenUp Today  Four Suppliers and Five Products—  Community Energy – 60% Wind / 40% Hydro$0.01 per kwh – 100% Wind$0.02 per kwh  Green Mountain Energy – 50% Wind / 50%Hydro$0.013 per kwh  Sterling Planet – 40% Wind / 30% Hydro / 30% Bio – $0.015 per kwh @ 50% / 75% / 100% of Use  Enviro-Gen – 25% Hydro / 75% Bio$0.01 per kwh

5. Issues Associated with GreenUp and Competitive Supply  Compliance with Commission regulations requiring Conversion Transactions  Costs of Billing and Implementation for Niagara Mohawk, GreenUp Suppliers, and ESCos

6. Compliance Issue  Conversion Transaction Requires Commodity Supplier to Provide Green Energy  GreenUp Designed when Niagara Mohawk Is the Supplier  After the Customer Moves to ESCo, the ESCo Performs the Conversion Transaction

7. Several Options  Option 1—The ESCo Provides the Green Energy Directly  Option 2—The ESCo Contracts with a GreenUp Supplier to Enhance Standard Offering  Option 3—Niagara Mohawk Extends GreenUp Program and Menu to Participating ESCos  Option 4—GreenUp Is Unbundled from Commodity Supply and Unaffected by Customer Transfer to ESCo

8. Option 1 – Direct ESCo Supply  Always Available  ESCo Purchases Green Energy Directly  Reports Sales and Generation to Commission  Issues Compliant Disclosure Label

9. Option 2—ESCo/GreenUp Supplier Partnership  Always Available  ESCo and GreenUp Supplier Partner to Provide Enhanced Service  Reporting and Compliance as in Niagara Mohawk/GreenUp Supplier Arrangement  ESCo performs the Conversion Transaction  Reports to the Commission

10. Option 3—ESCo Authorized to Provide GreenUp Menu  New Option  Niagara Mohawk Would Allow All ESCos to Use GreenUp Name and Marketing  ESCos Would Provide GreenUp on the Same Terms as Niagara Mohawk  Requires Contracts Between ESCos and GreenUp Suppliers  GreenUp Suppliers Charges Would Be Bundled with ESCo Charges  Niagara Mohawk Buys Entire Receivable Without Recourse  Can Remit to Bank that Would Allocate Payments  Not Available for Two-Bills and Partial Usage

11. Option 4—GreenUp as an Unbundled Product  New Option Favored by GreenUp Suppliers  GreenUp Would Be Shown as a Separate Product in the Commodity Section of the Bill  Menu Would Be Available to All Customers, Whether Served by Niagara Mohawk or ESCo  Niagara Mohawk Reports GreenUp by LSE to GreenUp Supplier  ESCo Performs GreenUp Conversion Transaction for Its Customers  Niagara Mohawk Pays GreenUp Supplier Directly, as Today  Niagara Mohawk Is Prepared to Implement this Approach

12. Issues Identified at GreenUp Meeting  Willingness of ESCos to Participate in Option 4  Potential for a Green Switch Program Supported by ESCos  Including GreenUp Options in Power Switch Program  Including GreenUp Options in SC-3 Aggregation  Joint Marketing Issues for Power Switch and Green Options  Consistent messages  Sharing of Marketing Resources – Bill Inserts – Other Marketing