1. 1 DE Generators Proposal for Transition to 100% RGGI Allowance Auction Amended Generators Proposal March 10, 2008 SCR28 Workgroup Committee

2. 2 SCR 28 “Resolutions and Progress” DE Generators Proposal for a Transition to a 100% Auction February 6, 2008 Generators Original Proposal for transition to a 100% Allowance Auction 50% Auction with a 50% Allocation 10% annual reduction to zero 10% annual reduction to zero 100% Auction 2014

3. 3 Key Concepts DE Generators Proposal for a Transition to a 100% Auction Transition to a 100% CO 2 RGGI allowance auction in DE is recommended Transition period – five years mitigate new program implementation risk and customer price instability over “two-term” compliance period mitigate the leakage issue in Delaware. Transition includes allocation, auction, and DE-based GHG reduction projects Newly formed GHG Advisory Board to evaluate and implement DE based projects.

4. 4 What’s New DE Generators Proposal for a Transition to a 100% Auction GHG Reduction Projects to be Delaware based Solicit projects through open RFP process Projects can include, but not limited to generator and generator-affiliated facilities as well as other projects Allocation to Generators reduced annually by 5% to fund GHG Reduction Projects (via auction process) GHG Reduction Advisory Board Recommended 3 – State of DE (DNREC, Legislators) 3 – Generators 3 – DE Based Environmental Advocacy Groups All Auctions managed by DNREC, administrative funding TBD in regulation process All Auction funds to SEU or similar energy efficiency management program

5. 5 Distribution of Proceeds as Allowances DE Generators Proposal for a Transition to a 100% Auction Allowance Vintage DNREC Set Aside Program Admin Allowances for Auction % Allowances for Generator Allocation % Allowances for Auction GHG Reduction Project % 2009per DE Reg. 50455 2010 60355 2011 70255 2012 80155 2013 9055 2014 and Beyond 100 or TBD 00

6. 6 Program Benefits Transition reduces program implementation risk, consumer price risk and leakage impacts Five year duration needed to cover two compliance periods GHG Reduction Project provides real CO 2 reductions in DE Advisory Board assures fair public process; includes State Officials, Generators, and Environmental Advocates