1. April 20061 Maine’s Competitive Electricity Market Rules

2. April 20062 T&D Utilities: Cannot own generating assets Cannot participate competitively in the electric power market Affiliate participation is limited (CMP has no affiliate. BHE and MPS have no affiliate activity.)

3. April 20063 Competitive Electricity Providers sell electricity T&D Utilities deliver electricity

4. April 20064 Who Sells Electricity in Maine: Competitive Electricity Providers (CEPs) Suppliers sell electricity to retail customers. A supplier may be a generator selling its own electricity or a marketer purchasing and reselling electricity. Aggregators & Brokers intermediaries who do not sell electricity

5. April 20065 Rules and Business Processes Business operations generally consistent with other states Business operations run smoothly Minor tinkering with rules occur, but consistency remains

6. April 20066 Providers Licensed in Maine Approximately 35 licensed suppliers Approximately 25 licensed aggregators or brokers Extent of activity in Maine varies

7. April 20067 Green Power A green market exists, for residential and business customers. Green market supply includes hydro, biomass, landfill gas, wind, and solar. Supply or certificates may be purchased.

8. April 20068 Load Served by Competitive Providers in March 2006 CMP BHE MPS Resid’l/Small C/I <1% <1% 7% Medium 35% 33% 46% Large 84% 66% 90% Total 39% 27% 41% State load served by competitive providers: 37%

9. April 20069 Migration to Standard Offer – CMP and BHE Medium and Large Customers

10. April 200610 T&D Service Areas

11. April 200611 Consumer-Owned Utilities 6% of Maine’s load Do have retail access Rules are simpler, might be different

12. April 200612 ISO-NE The bulk power system administrator in New England To serve load within ISO-NE territory, you must: –Be an ISO-NE participant or –Contractual arrangement with ISO-NE participant

13. April 200613 Northern Maine Part of Maritimes Control Area Transmission entry through New Brunswick Northern Maine ISA does settlement and transmission scheduling Must be a participant or have a contractual arrangement with a participant in NMISA administered market

14. April 200614 Information: Can be found on the MPUC web page, www.maine.gov/mpuc

15. April 200615 Standard Offer Chapter 301

16. April 200616 Standard Offer Service Maine’s only default service Provided by a competitive electricity provider(s) At a rate determined by competitive bid

17. April 200617 Customers in Standard Offer Standard Offer Providers Customer makes no choice Customer drops provider Provider drops customer

18. April 200618 General Model S.O. provider does not enroll or interact with individual customers T&D reads meters, bills, collects for S.O. provider T&D informs each S.O. provider of its S.O. sales S.O. provider is paid its bid amount times its sales, less a pre-defined percentage for uncollectibles

19. April 200619 Number of Providers More than one provider may provide standard offer service Total load for a customer class is apportioned among multiple providers based on the percentage of load won in the bid

20. April 200620 Term of SO Rates Terms described in RFPs issued by the PUC Length currently 6 months for medium and large classes. Thus the rate for these customers tracks the market. 1/3 of total residential and small commercial requirement purchased annually. This mitigates volatile wholesale prices.

21. April 200621 Residential & Small Commercial ( PRICE “A” ) Medium Commercial & Industrial ( PRICE “B” ) Large Commercial & Industrial ( PRICE “C” ) There is one Standard Offer Price for each customer group. Standard Offer Rate Classes

22. April 200622 20 How Rate Classes are Served A provider may serve one or more classes. Provider will serve in 20% increments in a rate class. 20%

23. April 200623 Rate Structure Residential & Small C/I must be a flat per kWh rate Medium may have seasonal rates, demand charge Large C/I may have monthly or time-of-day rates, demand charge

24. April 200624 Pricing Examples $.05 per kWh $1.00 per kW $.05 per kWh Standard Offer Prices: $.06 Winter kWh $.03 Summer kWh T&D Rate $ 10.00 Customer Charge $ 5.00 Winter kW $ 2.00 Summer kW $.10 Winter kWh $.05 Summer kWh

25. April 200625 Standard Offer Bid Process Residential/Small Commercial Rate Class ABC Co Bid 4.4 LMN Co Bid 4.7 RST Co Bid 4.8 Providers receive the price they bid $$$ The customer is billed one Standard Offer Rate: 4.6 40% 20% Example Only

26. April 200626 Collections T&D will bill and handle all credit & collection for SOP Uncollectibles will be provided for by retaining a pre-determined percentage of revenues Consumer protection rules that apply to T&D will apply to Standard Offer (eg, payment arrangements, disconnect for non-payment)

27. April 200627 Treatment of Uncollectibles Let’s Say: Bid price: 4 cents Actual kWh sales: 100,000 Pre-set uncollectibles percentage: 1% Then: 100,000 x.04 = $ 4,000 $4,000 x.01 = $ 40 SOP receives $ 3,960

28. April 200628 Leaving Standard Offer Res’l and small C/I - may leave and re-enter SO as often as they like Medium and Large customers - opt-out fee applies if customer was in competitive market and then went onto standard offer service Aggregates with load >50 kW - subject to opt-out fee

29. April 200629 Opt-Out Fee Opt-out fee = 2 times the highest standard offer bill for the most recent period customer took standard offer Paid if customer leaves standard offer after less than 12 months No opt-out fee in Northern Maine PUC may waive fee

30. April 200630 Licensing Chapter 305

31. April 200631 3 Steps to Provide Electricity Service In Maine 1)Obtain Maine License 2)Contract with T&D company for billing and metering services 3)EBT Training/Testing

32. April 200632 Consumer Protection – Two Groups of Customers, with different consumer protection requirements “Small” customers - In T&D’s rate class that has no demand charge (<20 kW, 25 kW or 50 kW depending on T&D) - More stringent consumer protection rules apply Larger customers: - All others - Less stringent rules apply

33. April 200633 Licensing Requirements Financial Capability Most recent financial disclosures or that of corporate parent Additional documentation to demonstrate ability to refund customer deposits if deposits will be held

34. April 200634 Licensing Requirements Technical Capability Description of industry experience with electricity or natural gas markets Document that applicant is a participant in ISO-NE or NMISA market or has a contractual arrangement with a participant

35. April 200635 Licensing Requirements Financial Security Applies to CEPs serving residential and small commercial customers Initial amount - $100,000 Subsequent – 10% of annual revenues from Maine sales Letter of credit or cash

36. April 200636 Licensing Requirements Enforcement Proceedings and Customer Complaints Disclose enforcement proceedings against applicant or associated entities within last 6 years Disclose customer complaints against applicant within last 12 months

37. April 200637 Licensing Requirements Miscellaneous Ability to satisfy portfolio requirement Disclosure of affiliates in retail electricity business Evidence of tax registration Contact persons List of jurisdictions in which applicant or affiliates engaged in electricity sales List of jurisdictions in which applicant or affiliates applied for license and disposition of application

38. April 200638 License Application Available electronically on MPUC Supplier Web Page Fee: $100 MPUC will approve, deny or investigate within 30 days of application

39. April 200639 Licensing Conditions Comply with Maine laws and regulations Update for substantial changes in circumstances Reasonable efforts not to conduct business with unlicensed entities Submit to jurisdiction of Maine courts and MPUC Contracts for service to residential and small commercial customers interpreted according to Maine law and maintained in Maine courts and agencies

40. April 200640 Annual Reports File on or before July 1 Average prices, revenues, sales by customer class and T&D territory Resource mix (ISO-NE territory use GIS certificates) Enforcement actions Compliance portfolio requirement

41. April 200641 Consumer Protection Chapter 305

42. April 200642 Consumer Protection All Customers Obtain customer authorization No release of customer information Comply with Unfair Trade Practices Act No unreasonable collection costs Comply with Equal Credit Opportunity Act Comply with telemarketing limitations

43. April 200643 Consumer Protection Small Customers – Terms of Service Send Terms of Service within 30 days of contracting w/customer Annual notification of Terms Include Uniform Disclosure Label with Terms

44. April 200644 Terms of Service Price structure Estimated bill method Late payment terms Deposits Fees & penalties Toll-free number Contract length Warranties Do not call list Rescission rights Standard Offer Credit agency procedures

45. April 200645 Consumer Protection Small Customers - Verification of Choice Supplier must receive verification that customer chose supplier: Written -- Strict Rules Third Party Verification

46. April 200646 Consumer Protection Small Customers - Rescission Period Tell customers orally and in Terms Customer’s rescission may be oral, written or electronic Rescission Period –8 days by mail –5 days if sent electronically or by hand

47. April 200647 Consumer Protection Small Customers - Slamming Complaints Customer can file a complaint MPUC will investigate Provider must refund customer money plus expenses Penalties are determined by the MPUC

48. April 200648 Consumer Protection Small Customers - Changes Provide customer with 30-day notice of change to Terms Provide customer with 30-day notice of contract termination

49. April 200649 Consumer Protection Small Customers - Generation Bill Content Consumption, price, charge Average cent/kWh charged this month Itemized list of products billed Payments applied, arrears, late payment information

50. April 200650 Consumer Protection Small Customers - Generation Bill Format Plain Language Separation, Definitions, Understandable

51. April 200651 Consumer Protection Market Risk Disclosure Applies to real time products (prices vary with energy prices or indices) Written disclosure prior to or at time of contracting Separate document or in contract acknowledged by signature or initials Language specified by MPUC (alternative language may be allowed)

52. April 200652 Consumer Protection Market Risk Disclosure Volatility risk Future performance Additional costs

53. April 200653 Resource Portfolio Requirement Chapter 311

54. April 200654 30% of annual kWhs sold to customers in Maine (calendar year)

55. April 200655 Portfolio Requirement 30% Eligible

56. April 200656 Eligible Resources Small Power Production Efficient Cogeneration built before 1/1/97 Renewable Generation < 100 MW Fuel CellsGeothermal TidalHydro SolarBiomass WindMunicipal Solid Waste

57. April 200657 Cure Period If 20% in one year, can cure over next year MPUC may extend

58. April 200658 Compliance Use ISO-NE GIS system to comply with Maine’s RPS requirement for sales in ISO- NE territory Use settlement data or other documentation to comply with RPS for sales in northern Maine Verify compliance in annual report

59. April 200659 Uniform Information Disclosure Chapter 306

60. April 200660 Label Content - Fuel & Emissions Resources used to meet load obligations in NE over most recent 12 month period Verified through NEPOOL GIS data for sales in ISO-NE territory or through settlement data or other documentation for sales in northern Maine Conform visually to MPUC sample label

61. April 200661 Label Content - Fuel & Emissions Fuel sources of resource portfolio -- biomass, MSW, fossil fuel cogen, fuel cells, geothermal, hydro, solar, tidal, wind, nuclear, gas, oil,coal Emissions from generation resources -- CO2, NOX, SO2 Must compare emissions to a NE average emissions

62. April 200662 Product Offerings Separate label for each product offering

63. April 200663 Label must be: Mailed quarterly to “small” customers Available to all customers on request Sent with Terms of Service to small customers

64. April 200664 Compliance Provide labels and evidence of validity with annual report