Budgeting and Tracking Your District’s Volatile Energy Costs 1

Breakout Session Topics Energy Costs 101 Natural Gas Cost Components Budgeting and Tracking Natural Gas Costs Electric Power Cost Components Apples to Apples Budgeting and Tracking Electric Power Costs IEC Program Contacts 2

Energy Costs 101 3

4 Cost = Price Cost ≠ Price Cost = (P*Q)T → BUDGET

Natural Gas Cost Components 5

Gas Natural Gas Delivery System Production Transportation Distribution Consumption Interstate Pipeline = Basis Gas Producers = NYMEX School Facilities Utility = LDC Distribution Costs City Gate State line Natural gas exploration & production companies Interstate gas pipelines moving gas to utilities Local gas utilities delivering gas to end-users Burning gas for heat and process applications Source: NYMEX 6 + Supplier Margin

Tracking and Budgeting Natural Gas Costs 7

EnerPro ® – Reports Main Screen 8

IEC Managed Program – Budget Forecast 9

“IEC Spot Pool Price Program” Budget Forecast 10

Electric Power 11

Pricing Components Energy Price Capacity Ancillaries and RTO costs Transmission Costs and Losses Distribution Losses Renewable Portfolio Standards Administrative Fees Delivery Service Charges

Know What You’re Buying and How to Tell an Apple from a Lemon Other Supplier IEC Energy4.789¢/kwh 3.974¢/kwh CapacityPass Thru 0.896¢/kwh Distribution LossesPass Thru 0.242¢/kwh Transmission & Ancillaries0.596¢/kwh 0.596¢/kwh RPSPass Thru included Other RTO ChargesPass Thru 0.225¢/kwh How Much will you pay? ??? 5.933¢/kwh No matter who you purchase from, demand they show you transparency in the pricing. If they won’t – Show them the door.

Sample Budget Projection 14

IEC Natural Gas Program Day-to Day Contacts Before you become a Member: Glen Grimm – New Business Development Office: Cell: Fax: After you become a Member: Liz Peronto – Account Manager Office: Fax:

IEC Electric Program Contacts Membership Questions (Prospective and Current) Tonya Powell – Electric Program Administrator Office: Fax: Billing Questions: Glenda Ehrlich & Meghan Scally AEM Customer Care Team Office: opt 3 Fax:

Pricing Components Descriptions Energy – The Wholesale Energy cost secured by the IEC through block purchases Capacity – Charges dictated by MISO or PJM to ensure reliability Ancillaries and RTO costs – includes imbalance fees, Market administration fees, etc… Transmission – rate charged to transport energy from generator to service point Distribution Losses – cost of the percentage of energy that is “Lost” while traveling from Point A to B.

Pricing Components Descriptions (cont’d) Renewable Portfolio Standards – Cost to suppliers to ensure required percentage of energy derives from approved Renewable resources Administrative Fees – Because the IEC is a non-profit organization, Administrative fees are charged to cover the cost of administering the Program (marketing, communications, Program Administration, etc…) Delivery Service Charges – fees charged by the local utility to use their poles, wires, metering services, etc.