GreenUp and the Competitive Opportunities Plan

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