1. 1 Potomac Electric Power Company Case 9155 & Delmarva Power & Light Case 9156 EmPOWER MARYLAND 2012 - 2014 DRAFT RESIDENTIAL ENERGY EFFICIENCY AND CONSERVATION PORTFOLIO Maryland Stakeholder Meeting April 14, 2011

2. 2 Residential Portfolio Overview Design Philosophy: Support EmPOWER goal achievement Create a suite of programs that provides all residential customers opportunities to increase efficiency, lower their energy bill and improve comfort in their homes. Build on 2009 – 2011 experience – Keep what worked – Fix what didn’t. Target Market: All residential customers. Portfolio Programs: Lighting and Appliances Existing Homes Limited-Income HVAC Peer Group Comparison New Program Element Highlights LED Lighting Refrigerator/Freezer recycling Third air conditioning efficiency tier Expanded QHEC measure list Limited-income Neighborhood Energy Sweep Behavioral based program Incentive Increases - Financing New Construction Program being evaluated

3. 3 Residential Portfolio Overview Factors Supporting Portfolio Achievements: Increased Incentives – Provide additional market adoption Increased Program Level Marketing/Outreach – Enhanced customer awareness of the programs AMI Deployment/Customer Education - Customers will have a better understanding of their energy usage and savings opportunities Increased Staffing – Additional field implementation staff Improving Economy – More discretionary spending

4. 4 Residential Portfolio Overview – Summary Data

5. 5 Portfolio Overview - Assumptions Incentive Philosophy: Incentives must be sufficient to move the market Aligned with other Maryland programs where logical to do so Flexible over time to adapt to implementation results and codes and standards, technology, market and economic changes Impacts Estimates: SAVINGS ESTIMATES – Based on Mid-Adlantic TRM, PHI and Maryland implementation and evaluation experience PENETRATION/ADOPTION RATES - Combination of PHI and Maryland implementation experience and pay-back adoption rate modeling Avoided Costs and Economic Factors: AVOIDED ENERGY COST – Based on PHI SOS rates AVOIDED CAPACITY COSTS – PJM auction values tapering to Net CONE

6. 6 Residential Lighting & Appliance Program Program Description: Increase consumer purchases of ENERGY STAR © lighting, window AC and products, using rebates and/or middle-market buy-downs. Target Market: All residential customers. Eligible Measures ENERGY STAR compact fluorescent light bulbs ENERGY STAR pin-base compact fluorescent table lamps and fluorescent lighting fixtures ENERGY STAR compact fluorescent torchieres ENERGY STAR LED lamps and lighting fixtures ENERGY STAR window air conditioners ENERGY STAR and CEE Tier 2 refrigerators ENERGY STAR Freezers ENERGY STAR and Super Efficient clothes washers Replacement electric water heaters with an Energy Factor (EF) ≥0.93 Heat pump water heaters Residential plug load controls and smart strips Refrigerator and freezer recycling

7. 7 Residential Existing Home Efficiency Program Program Description: The primary objective is to assist homeowners to identify and implement cost effective energy efficiency improvements in the homes. The Program will have two tracks: Quick Home Energy Check-up QHEC provides all customers with a high level evaluation of the current efficiency of their homes, installs simple energy savings measures, offers guidance on how to reduce the home’s energy usage and identifies opportunities for the homeowner to benefit from other Pepco EmPOWER energy efficiency offerings Home Performance with Energy Star Home Performance with ENERGY STAR is a whole-house approach to reducing energy consumption when considering home improvements such as new heating and air conditioning equipment, replacing windows, or adding insulation. HPwES provides incentives of 40% of the cost of energy efficiency improvements up to $2,000 per home. Customers who have participated in the HPwES program within 12 months prior of the start of the 2012 program and have not implemented the improvements identified in the HPwES audit will be eligible to receive the new incentive level. Contractor will receive $100 on project completion and test-out. Delivery Strategy: Program implementation will be provided by third-party vendors who are certified by the Company. Marketing and Communications: The General Awareness Campaign will be the primary customer communications medium for the program. Program specific marketing efforts will target contractors and trade allies in the HVAC and home improvement industries.

8. 8 Residential Home Performance Eligible Measures QHEC –The home energy check-up –6-12 CFL’s (up to 2 3-way bulbs) –Electric Hot Water Heater Tank Wrap –Electric Hot Water Heater Pipe Wrap –Low Flow Showerhead (electric hot water heater only) –One Energy Efficient Kitchen Faucet Aerator –Three energy efficient bath aerators –Smart Strip HPwES –HPwES energy audit –CFL bulbs and other QHEC measures installed at the time of the audit, –Sealing of the home to reduce infiltration, –Sealing and insulation of ductwork when present in the home, –Adding additional insulation to the home were possible and cost-effective, –Energy Star windows, –In addition to the measures listed above savings opportunities such as high efficiency HVAC equipment and lighting will be identified in the energy audit. These measures will be eligible for incentives through other Pepco residential energy efficiency programs and low-cost financing through the HPw/ES Program.

9. 9 Residential New Construction PHI is currently investigating adding a Residential New Construction Program based on the EPA ENERGY STAR Homes program to its EmPOWER portfolio. At the present time there are two significant unknowns relating to program modeling and design: The number of single family homes, eligible to participate in the ENERGY STAR Home Program, that are likely to be built in the 2012 – 2014 time period. The potential electrical energy savings which can be expected from an ENERGY STAR V3 qualified home compared to the IECC 2012 energy code that being published April 15, 2011 and is scheduled take effect in Maryland during 2012.

10. 10 Residential Limited Income Program Description: Two program tracks, full weatherization services and an expanded Quick Home Energy Check-up tailored to limited- income needs. Target Market: Full Weatherization Services based on the following criteria: Income eligibility based on the EUSP/MEAP Program requirements High energy burden (percent of total annual income spent on energy) Residence has not received weatherization services in the prior 18 months. Expanded QHEC: Customers living within targeted areas which show low average income and other distress actors such as percentage of single families, percentage elderly, etc. These customers will be identified using Neighborhood Energy Sweep marketing. Eligible Measures: Include - No additional cost fuel-blind energy audit, Weatherization services including air duct sealing, CFL bulbs, Low-flow faucet aerators and shower heads, Water heater insulation wrap, Insulation upgrades, HVAC maintenance/upgrades, ENERGY STAR refrigerators and ENERGY STAR windows.

11. 11 Residential HVAC Program Description: Increase the energy efficiency of central air conditioning and heat pump equipment being installed in the PHI service territories. The program will employ two primary strategies to reach the objective, improved equipment efficiency and improved installation and maintenance practices. Target Market: Residential customers who are purchasing central AC and heat pump systems and HVAC designers, contractors and installers. Eligible Measures: The efficiency measures (improvements) eligible to receive incentives in this program have been selected to support both increased equipment efficiency and improved installation practices. The list of eligible measures for the program include: Air conditioning equipment –ENERGY STAR - 14 SEER and 11.5 EER –Tier 2 - 15 SEER and 12.5 EER –16 SEER and 13.5 EER Air source heat pumps –ENERGY STAR - 14 SEER, 11.5 EER and 8.5 HSPF –Tier 2 - 15 SEER and 12.5 EER and 8.5 HSPF –16 SEER and 13.5 EER and 8.5 HSPF Geothermal heat pumps (primarily in new construction) Optional Quality Installation Verification (QIV) –Refrigerant charge and air-flow verification –Duct leakage testing and incentives for low leakage rates Central air conditioner and heat pump tune-ups

12. 12 Residential Peer Group Comparison Program Program Description: The primary objective is to increase customer awareness: of their energy consumption, provide comparative data relative to similar households, and drive awareness of other savings opportunities in the EmPOWER portfolio. Target Market: Residential customers equipped with smart meters. Consumer Participation: Customers with AMI meters installed will receive several mailings per year, while web presentment of data will be from the start of enrollment. Participants can opt out at any time of either the program or the mailings if they choose. Implementation: The primary message conveyed to customers is their monthly consumption relative to their peer group. Using behavioral messaging, the customer is incented to reduce consumption through increased awareness of their energy usage. Savings: Expected to be 1-3% of total consumption, depending on program specifics.

13. 13 Thank You