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PASBO 54th Annual Conference Seminar

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PASBO 54th Annual Conference Seminar

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    1. PASBO 54th Annual Conference Seminar A Strategic Plan for Managing Electricity Costs in a Market-Based Environment

    2. Energy Markets Today: Volatility and Uncertainty Oil/Gas Roller Coaster painfully up, steeply down! Developing Economies? Weak dollar? Speculative Trading? Sub-Prime Crisis? Geo Politics? Any Politics?

    4. Evolution of the Electricity Market in PA Unbundling of Services & Supply: “Choice” Today: Marginal Price > “Capped” Price Marginal Electricity Prices Track Volatile Oil/Gas Expiration of Rate Caps Risks will Shift to the Retail Customer Expectation of Significant Price Increases Pike County, UGI, Maryland, Delaware: ˜ 70%

    5. Future PA Electric Market? December 31, 2009 – PPL Rate Caps expire December 31, 2010 – PECO & GPU Rate Caps expire Electric bill structure and components change Stranded costs (CTC/ITC) disappear from bill No “Shopping” (Stay w/ PPL, GPU, PECO, etc) Tier “A” – 0-100 kW : Quarterly Adjustment Tier “B” – 100-500 kW : Quarterly Adjustment Tier “C” – 500 kW+ : Monthly Pricing (+ Adder?) Anticipate a price increase & volatility

    6. What Can You Do to Mitigate this Price Increase? Develop & Implement Procurement Strategy Gather and Prepare Energy Usage Histories Aggregate to Improve Purchasing Power Qualify Multiple Suppliers to Increase Competition Solicit Flexible and Innovative Product Offerings Explore Tradeoffs of Price, Risk and Reliability Ensure Contract Consistency w/Strategy/Goals Track Usage & Costs through Customized Analyses Utilize Results in Developing/Refining Budgets

    7. Independent Approach Options to Consider: Brown/Green/Renewable Demand Response

    8. Peak Day K-12 Load Shape

    9. NYMEX Settle Prices & Futures: 2004 - 2013

    10. Activity Timeline

    11. Peak Week K-12 Load Shape

    12. PJM LMP Price: 16 Jan 2009

    13. Case Study Southeastern PA Schools - Phase 1 40 school districts enrolled plus 52 private schools Over 350 Million annual kilowatt-hours under agreement to both Provident Energy and EGS Savings of 8-11% on the unregulated portion of the utility’s bill, or about 5-8% from total bill Total Cost Reduction of over $4 Million/Year!

    14. Who is Provident Energy? PA PUC Licensed Energy Supplier Electricity since 1998, Natural Gas since 2007 Highly Knowledgeable and Capable Team 40+ Years Energy Industry Experience Education: E.E., Environment, MBA Finance Current Client Aggregation: 750 Million KWh, 200 MW, 2 Million DKTh Includes 70 School Districts

    15. Why Provident Energy? Independent/Non-Exclusive Consulting Firm Competition from Reputable/Capable Suppliers Critical Licensing Advantage: “EDI” Electronic Gathering/Updating of Utility Data Personal Client Relationships: Key to Success Long Established Tradition, Measurable Results Lengthy Experience in Retail Purchasing

    16. Contact Information Joseph S. Solomon, President Voice: 610.565.0633 Facsimile: 610.565.7853 jsolomon@ProvidentEnergyUS.com Michael R. Lang, Principal Voice: 610.565.5507 Facsimile: 610.565.7853 mlang@ProvidentEnergyUS.com www.ProvidentEnergyUS.com

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