AMP painesville Project Update 111813 - City of …66FDE066-2B9A-43E2-8DFC... · efficiency than...

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Transcript of AMP painesville Project Update 111813 - City of …66FDE066-2B9A-43E2-8DFC... · efficiency than...

Projects UpdatePainesville City CouncilPainesville City CouncilNovember 18, 2013

Pamala Sullivan, Sr. VP of Marketing/Operations, g pJohn Bentine, Sr. VP General CounselMike Perry, Sr. VP of Generation ServicesMike Perry, Sr. VP of Generation Services

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AgendaAgenda

• About AMP• Painesville Power Supply• Prairie State Project Update• Prairie State Billing

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About AMPAbout AMP• AMP formed as a nonprofit corporation in 1971

O d b 129 b i l di 128 i i l l t i• Owned by 129 members including 128 municipal electric communities in Ohio (82), Pennsylvania (30), Michigan (6), Virginia (5), Kentucky (3), West Virginia (2) and the Delaware Municipal Electric Corporation (DEMEC)

• Project Based OrganizationO d/ t ti f iliti b h lf f– Own and/or operate generating facilities on behalf of membership

– Each member’s governing body makes decision on participation in projectsin projects

About AMPCorporate Governance

About AMP

Board of Trustees consists of 20 community representatives (meets 1-1/2 days per month)

Project GovernanceProject GovernanceEach project has a Participant Committee that is elected among the Participants (meets quarterly)elected among the Participants (meets quarterly)

Both decision making and advisory rolesAMP Board Committee for each Project (meets monthly)Project Participants meet at least yearly at Annual Conference

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Annual Conference

Painesville Power Painesville Power Supplypp y

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Painesville Power Supply Mix

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Any Painesville and JV2 Generation would be sold to market

AMP vs. Public Power (IL, IN, MI, OH, WI)

AMP 2015 (Energy)Public Power (Energy)

AMP – 2015 (Energy) (Regional)

Source: APPA Directory Year 2012Note:- Member coal Includes Paducah and Princeton’s Prairie State through KMPA

7 CONFIDENTIAL

- Wind & Solar Includes Member Owned Solar- Hydro Includes Member Owned Hydro

AMP vs. Industry(Ohio)AMP vs. Industry(Ohio)Industry (Energy)

AMP 2015 (Energy)AMP – 2015 (Energy)

Source; Edison Electric Institute year 2011

Note:- Member coal Includes Paducah and Princeton’s Prairie State through KMPA

9 CONFIDENTIAL

- Wind & Solar Includes Member Owned Solar- Hydro Includes Member Owned Hydro

Painesville Power Supply MixMix

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Energy Markets

$13$110

$12012 Month Price of Wholesale Energy Commodities

$11

$13

$90

$100

$110

Btu

Wh el

$7

$9

$60

$70

$80

rice /

MM

B

Price

/ MW

Price

/Bar

re

$5

$7

$30

$40

$50

PP P

$3$20

$30

On-Peak Electricty Crude Oil Natural Gas

5 CONFIDENTIAL

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Painesville Power Supply MixMix

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PJM Auction Results

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Prairie State Prairie State Updatep

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Prairie State Energy Prairie State Energy Campus

Nearly 7 Million Tons ofNearly 7 Million Tons of Coal Mined Annually to fuel 1,600 megawatt P Pl tPower PlantLargest coal power plant built in the U.S. sincebuilt in the U.S. since 19824,000 construction jobs t k th 500at peak; more than 500

permanent jobs

18 CONFIDENTIAL

Project StatusProject Status• Painesville Participation = 9.952 MW

• 68 AMP Member Participants

Unit 1• Unit 1 – Commercial operation June 2012– Exceeded capacity performance testing (812 MW)

• Unit 2 – Commercial operation November 2012– Exceeded capacity performance testing (816 MW)

• Both units exceeded heat rate performance testing (greater efficiency than projected)

• Project is 100% financed 17

Safety & Compliance

3.5

2.6

1.61

1.01.0

0.90.9

0.270.27

Utilities

Other Services (excl. public admin)

Prairie State Generating Company (ITD)

3 0

4.7

1.4

1.6

1 51 5

1.31.3

0.40.4

0.60.6

Mining

Educational & Health Services

Financial Activities

Information

ecto

r

3.9

3.2

5.3

3.0

1.21.2

1.11.1

3.03.0

1.51.5

Retail Trade

Wholesale Trade

Bituminous Coal Underground Mining

Mining

ivat

e In

dust

ry S

e

1.7

4.4

4.0

0.50.5

1.11.1

1.01.0

Professional & Business Services

Manufacturing

Leisure & Hospitality

Pri

3.9

7.3

5.5

1.51.5

3.93.9

1.81.8

Construction

Transportation & Warehousing

Agriculture, Forestry, Fishing & Hunting

0.0 2.0 4.0 6.0 8.0 10.0 12.0Total Recordable Incident Rate Lost Work Day Incident Rate

Source: U.S. Bureau of Labor Statistics, 2011

20 CONFIDENTIAL

Operations/Costs Summary – 2013 as of September 30, 2013

Category Forecast(9 & 3)

Budget Notes

Construction Capital $4,876.8M $4,903.6M Forecasting ~ $29M less than May 2013 revised budget, and ~ $59M gless than original 2013 budget.

Capital Plan $46.2M $51.1M

Mine Production 4 8M tons 6 4M tons Ending inventory of 1M tonsMine Production 4.8M tons 6.4M tons Ending inventory of 1M tons

EAF (Equivalent Available Factor) 65.8% 85.1% 50 unit days of scheduled outage Oct-Nov

EFOR (Equivalent Forced Outage Rate) 26.9% 5.0%

21 CONFIDENTIAL

How Does the PSEC Compare?

8190100

Represents ‘Full’ Calendar Year(s) After Substantial Completion Navigant Survey

Year 1 Average 77.2%

Navigant Survey

Represents Average Since Preliminary Completion

U1 Yr 1 (12 months) U1 Yr 2 (4 months)

U2 11 months

65.68 67.72 66.6776.5 77 81 77.2

69.1150607080

Year 1

Navigant Survey Year 2

Average 83.19%

10203040 Year 2

Year 3

00

PSGC - U1 PSGC - U2 PSGC - Total Plant 2 - U2 Plant 3 - U1 Plant 3 - U2 Navigant Survey

N i t SNavigant Survey • Year 1: EAF averaged / range 64.35% - 90%; Year 2: EAF averaged / range 75.17% - 91.2%• Year 1: EFOR averaged ~ 15%, with a range of 8.08% - 29.08%. Year 2: EFOR averaged ~ 12%,

with a range of 6.68% - 18.45%EFOR Drivers of Supercritical Units First Two (2) Years of Operationp ( ) p

• Boiler Tube Leaks, Turbine (Shaft Seals, Bearings & Controls), Bottom Ash Conveyor (SFC), Boiler Steam Piping, Minor Boiler Overhaul, Electrical & DCS

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Lost MWh Mitigated vs. In ProcessJune 2012 – September 2013

700 000

800,000

900,000

~5.4M Lost MWh

Lost MWh events where mitigation measure will be implemented by Spring ’14 Outage

68% f M j E t

Lost MWh events where analysesare still in process

32% f M j E t

400,000

500,000

600,000

700,000

Mitigated In Process

68% of Major Events 32% of Major Events

100,000

200,000

300,000

-

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Leak

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WE

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Reh

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ear W

all T

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Ele

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of 1

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24 CONFIDENTIAL

Lost MWh Mitigated / To Be Mitigated June 2012 – September 2013

3 000 000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

-

500,000

, ,

Boiler AQCS SFC Pulverizer Turbine Other

Issue Mitigated / to be Mitigated Analysis in Process

• ~ 68% Lost MWh issues mitigated / to be mitigated by Spring 2014 Outage (3.5M MWh)

• Events below represent 81% of lost mwh whose mitigation effort has yet to be determined:

Event % Lost MWh Solution Considered

SFC (Submerged Flight Conveyor) 22% Material upgrades, load sheds, sprocket teeth guides

Condenser Tube Leaks 12% Revise start-up & monitoring procedures, hotwell conductivity cells modified to improve usefulnesscells modified to improve usefulness

Tube Leak – Reheat Section 12% Waiting on completion of RCA (Root Cause Analysis)

Economizer/ Rear wall tube leak 11% Waiting on completion of RCA

Boiler Feed Pump Element Bound up 9% Waiting of final report from OEM (Original Equipment Manufacturer)p p g p ( g q p )

Superheat Spray Valves 8% Revised torque specs for valve body to bonnet bolts

Superheat Spray Valves packing 7% Improved style of valve packing has been installed25 CONFIDENTIAL

Human PerformanceJune 2012 – September 2013

Pl t # l t MWh’ d t

447,412 450,000

500,000 8.3% of Total Lost MWhs

Please get # lost MWh’s due to human performance and what % of the total is represented. Did we allocate any from the U1 slag 300,000

350,000

400,000

y gup in summer 2012 or the U1 PSH tube leak?188,673

150,000

200,000

250,000

101,293

49,837 44,335 31,815 11,653 10,634 5,460 3,608

103 -

50,000

100,000

-U2 Primary SH

Tube Leak -Sootblower

Stuck

U2 Slag Fall resulting in unit

trip and tube leak

U1 Submerged Flight

Converyor Plugged

U1 GSU Transformer Disconnect

Center Phase

2B Boiler Feed Pump Element

Bound Up (9/24/13)

U2 'A' ID Fan RTD

Loss of coal flow signal from the 2D feeder resulting in a

unit trip

U2 Low Economizer Inlet Flow

2B Primary Air Fan - Loss of

Lube Oil

DCS Controls Rejected to

Manual

Total

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2014 Plan EAF & EFOR

90.0%

100.0%U2 Spring Outage

3/7 – 4/11U1 Maint. Outage

SCR Cleaning

60 0%

70.0%

80.0%

40.0%

50.0%

60.0%

10.0%

20.0%

30.0%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2014 Total

EAF 80.6% 78.6% 41.9% 71.7% 90.3% 96.7% 96.8% 96.8% 90.0% 64.1% 79.5% 93.9% 81.7%EFOR 19 4% 21 4% 31 6% 12 2% 9 7% 3 3% 3 2% 3 2% 10 0% 23 6% 20 5% 6 1% 12 9%

0.0%

10.0%

EFOR 19.4% 21.4% 31.6% 12.2% 9.7% 3.3% 3.2% 3.2% 10.0% 23.6% 20.5% 6.1% 12.9%

27 CONFIDENTIAL

Prairie State Fuel Advantage vs. 2013 Actuals

Coal Source* BTUs $ Per MMBtu

2014 PSGC Budget**2013 PSGC Forecast**

8,4008,400

$1.00$1.17

Powder River Basin 8,800 $1.82

Illinois Basin 11,400 $2.26

Northern Appalachia 12,200 $2.34

* Plant average delivered cost and BTU’s** Excludes debt service and coal reserve costs29 CONFIDENTIAL

PSGC: Preserving and Enhancing Value

Mine Plan Improvements (40’ cuts): $53.5M P Pl t O t t b l t $67 7 $116 4MPower Plant Output above nameplate: $67.7-$116.4M (1))(2)

Heat Rate $22.2M (1)

Near Field $278MNear Field $278M (3)

1/ Assumed U2 performance is same as that achieved by U12/ Range based on estimated market forwards excluding and including CO2 pricing3/ Represents transportation cost savings3/ Represents transportation cost savings

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EPA Regulations Impact

• Prairie State Generating Company (PSGC), with its investment in Best Available Control Technology is ableinvestment in Best Available Control Technology, is able to meet and/or exceed all of the new and currently proposed U.S. EPA regulations on coal-fired power plants

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Prairie State and Other Coal Plants A Technological Success Story

4.37

U.S. Coal Fleet Over 80% Reduction in SOU.S. Coal Fleet Over 80% Reduction in SO2 2 & NO& NOxx in 40 Yearsin 40 YearsExpect over 40% Reduction in SOExpect over 40% Reduction in SO2 2 and NOand NOxx in Next 4 Yearsin Next 4 Years

Prairie State Operating in Top 6% of U.S. Coal PlantsPrairie State Operating in Top 6% of U.S. Coal Plants4.37 p g pp g p

1.08Initial Prairie State Operating Levels0.08 SO2 & 0.05 NO

U.S. Average

Prairie StateSupercritical

Clean AirInterstate

0.17 0.260.12 0.1820.07

0.54

U.S. Average

Near-Zero

FutureGenTBD

0.015 0.027IGCC

(Permitted)TurkUltra-

0.0650.05

NOx

Source: EPA’s Clean Air Markets database, July 2012; Project Permits; FutureGen Final Environmental Impact Study, DOE/EIS-0394,November 2007.

Average2011

p(Permitted)

2012

InterstateRule 2015

Average1970

TBD(Permitted)2015-2016

UltraSupercritical

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Prairie State Prairie State Billingg

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Prairie State Project 2007 Cost Risk Analysis

* Does not include costs for congestion / costs o co gest o /losses from MISO/PJM border to Participants

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Prairie State Project Cost Comparison – October 2010

$120.00

CO2 Costs

78 81

7881 82 83 83 85

90

9599

$80 00

$100.00

Other Environmental Costs

56 59

59 60 62 63

67 68 68 70 72

75

5659 63

7075

$60.00

$80.00

Coal Mining Costs

Net Operating Costs

$40.00

Costs

Net Debt Service

$-

$20.00

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Average Firm Market Price -MISO-East

Source: RW Beck

* Forecast above assumes CO2 costs are incurred starting in 2015 at $10.27/ton and grow to $29.36/ton by 2025.

2 2 2 2 2 2 2 2 2 2 2 2 2 2

Prairie State Invoiced Costs to Painesville

• Average cost for 2013, thru October 2013 = $68 53/ MWh (delivered to PJM/MISO= $68.53/ MWh (delivered to PJM/MISO border, without capacity credit)

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Prairie State Rates on Invoice• AMP invoices the PSEC Project costs as approved by the project

Participants or Participants Committee and the Board of Trustees.• Costs are calculated monthly and invoiced to members in a separate

section on their power invoice.p• Costs invoiced to Participants include:

– Prairie State Costs invoiced to AMP

– AMP O&M costs (ECC, Legal, Misc)

– Revenue to cover project debt.

– Transmission from PSEC to PJM/MISOTransmission from PSEC to PJM/MISO • RTO charges associated with delivery of PSEC power to the PJM/MISO interface.

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Power Invoice Resources Detail (PSEC)(PSEC)

• Prairie State Generating Company C t i i d t AMPCosts invoiced to AMP

– PSGC invoices AMP Monthly• Fixed Expenses = 23.26 % of the fixed expenses incurred at

Prairie State

• The Prairie State Fixed expenses and the AMP O&M costsThe Prairie State Fixed expenses and the AMP O&M costs are invoiced to the Participants through the approved “Demand Charge” rate. This rate, as approved, is designed to recover the PSEC and AMP costs over the course of a calendar year.

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Power Invoice Resources Detail (PSEC)(PSEC)

• PSGC Costs invoiced to AMP (contd.)– PSGC invoices AMP Monthly

• Variable Expenses = Percentage (%) of all variable charges (primaril f el related) based on the AMP share ofcharges (primarily fuel related) based on the AMP share of the total energy dispatched from PSEC over course of month.

• The Prairie State variable expense is invoiced to the participants through the “Energy Charge” rate. The “Energy Charge” is exclusively used to recover the PSEC

i bl i i d t AMPvariable expenses invoiced to AMP.

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Power Invoice Resources Detail (PSEC)(PSEC)

• Revenue for project debt– AMP financed the 23.26% ownership of the Prairie State Project.

– Payments to the bond holders are made every six months. (February 15 and August 15)( y g )

– Per Bond agreements, AMP must collect 110% of debt requirements from the participants.

• This extra 10% collections is placed into an R&C fund.p• The money in the R&C fund is available for use by the PSEC project as directed

by the Participants or Participants Committee and the AMP Board.

– As part of the budgeting process, AMP develops monthly schedule f i i i th d bt t th P ti i t Thi h d l lifor invoicing the debt to the Participants. This schedule complies with all Bond requirements and levelizes the debt collection over the budgeted period.

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Power Invoice Resources Detail (PSEC)(PSEC)

• Transmission from PSEC to PJM/MISO – Prairie State Power Sales Contract specifies that the

“Point of Delivery” for PSEC power is the PJM/MISO borderborder.

• Transmission and ancillary costs from the plant bus to the PJM/MISO border for PSEC power is included in the PSEC raterate.

• Transmission and ancillary costs from the PJM/MISO border to the participants system is the responsibility of the individual participants and is not included in the PSEC rateindividual participants and is not included in the PSEC rate.

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Power Invoice Resources Detail (PSEC)(PSEC)

• Transmission from PSEC to PJM/MISO (contd.)

MISO

PSECMISO/PJM borderPSEC

Plantborder

Cost to move power from the plant bus to the PJM/MISO is a Project cost, invoiced through Project Rates.

PJMCost to move power from PJM/MISO to Participant is NOT a Project cost.It is invoiced to the member individually.

Participant SystemSystem

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Power Invoice Resources Detail (PSEC)(PSEC)

• Transmission from PSEC to PJM/MISO (contd.)-Costs to deliver power to the PJM/MISO interface include:

• MISO Congestion and Losses

• FTR Charges and Credits

Firm Transmission Charges• Firm Transmission Charges

• Deviation charges – Difference between what is scheduled in DA market and what is

actually delivered from Plant to AMPactually delivered from Plant to AMP

• Reactive Revenue Credit

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Power Invoice Resources Detail (PSEC)(PSEC)

• Board Approved Rate Levelization- For 2013 and 2014, the AMP Board and Participants or Participants Committee

have authorized the levelization of rates for the PSEC participants.

- The rate is levelized to the participants at the PJM/MISO interface, and it is levelized before the distribution of any capacity credits due the participants.

- The funds used to stabilize the rates have been taken from available bond proceeds, R&C Fund, and utilization of the AMP line of credit.

- The effect of this rate levelization is broken out on a separate line on the invoice and described as “Board Approved Rate Levelization ”and described as Board Approved Rate Levelization.

- The rates and funds used for levelization are reported to and reviewed by the AMP Board and Participants Committee on an ongoing basis.

- As of September 30, 2013, Prairie State project has utilized a net total of p p j$1,460,835 from the AMP line of credit. Painesville’s share is about $39,506.

- The interest rate on the AMP line of credit is a variable rate. The annual interest rate was approximately 1.277% for September 2013 (or .1064% per month).

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Power Invoice Resources Detail (PSEC)(PSEC)

• Board Approved Rate Levelization

MISO

PSEC

Board approved Rate levelization is for power at this delivery point (Before application of capacity credits)PSEC

Plantapplication of capacity credits)

PJM

Participant SystemSystem

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Power Invoice Resources Detail (PSEC)

• Capacity Credit & Net Congestion/Losses/FTR- These two items in the Prairie State section of the invoice are

calculated in an identical manner as they would for any resource.

- As stated earlier, all power with a point of delivery other than the , p p ymunicipal load point are subject to congestion and losses.

- FTR’s are Financial Transmission Rights that can be purchased as a hedge against congestion.

- PJM also requires all members to purchase capacity sufficient to meet their load with a reserve margin of approximately 15%.

- The way AMP invoices capacity, all members are invoiced for their full capacity amounts and then credited for each source that has capacitycapacity amounts, and then credited for each source that has capacity rights associated with it. This is shown as a “Capacity Credit” on the section for each resource.

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Power Invoice Resources Detail (PSEC)(PSEC)

Prairie State - Sched @ PJMCD d Ch $8 573407 / kW * 9 952 kW $85 322 55

• Prairie State Detail - SummaryDemand Charge: $8.573407 / kW * 9,952 kW = $85,322.55Energy Charge: $0.007909 / kWh * 6,000,424 kWh = $47,457.52Debt Service $22.312364 / kW 9,952 kW $222,052.65Transmission from PSEC to PJM/MISO $0.007373 / kWh 6,000,424 kWh $44,243.82Board Approved Rate Levelization $0.000000 / 0 0 0 $42,916.68

• SummaryDemand Charge = PSEC and AMP Fixed costs

Capacity Credit: $0.700883 / kW * -9,952 kW = -$6,975.19Net Congestion, Losses, FTR: $0.004164 / kWh * $24,986.97

Subtotal $0.076662 / kWh * 6,000,424 kWh = $460,005.01

– Demand Charge = PSEC and AMP Fixed costs– Energy Charge = PSEC variable costs– Debt service = Revenue required to make the Bond Payments and comply with

Debt Covenants.– Trans from PSECa s o S C

to PJM/MISO = RTO charges associated with moving power to the PJM/MISO Interface.

– Board Approved Rate Levelization = Levelization of above costs to a rate determined by the AMP

B d f T t tili i il bl f dBoard of Trustees utilizing available funds.43

Power Invoice Resources Detail (PSEC)(PSEC)

Prairie State - Sched @ PJMCD d Ch $8 573407 / kW * 9 952 kW $85 322 55

• Prairie State Detail – Summary (contd.)Demand Charge: $8.573407 / kW * 9,952 kW = $85,322.55Energy Charge: $0.007909 / kWh * 6,000,424 kWh = $47,457.52Debt Service $22.312364 / kW 9,952 kW $222,052.65Transmission from PSEC to PJM/MISO $0.007373 / kWh 6,000,424 kWh $44,243.82Board Approved Rate Levelization $0.000000 / 0 0 0 $42,916.68Capacity Credit: $0.700883 / kW * -9,952 kW = -$6,975.19Net Congestion, Losses, FTR: $0.004164 / kWh * $24,986.97

Subtotal $0.076662 / kWh * 6,000,424 kWh = $460,005.01

Levelized charges

• Summary (contd.)

– Capacity Credit = Credit for installed capacity that offsets capacity charges p y p y p y gfrom PJM/MISO

– Net Congestion, Losses, FTR = Costs associated with moving power from the delivery

point (PJM/MISO interface) to the Municipal Bus. 44

According to the Dispatch April 2013 Article:

• Painesville – 10th lowest residential bill out of the 52 utilities in the State included in the surveyincluded in the survey

• About 98% of residential customers in Ohio have hi h t il bill thhigher retail bills than Painesville

• All highlighted municipal g g pelectric utilities are Prairie State Participants

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