ESMEC-ET Electric Portfolio ReportFebruary 20, 2014

2

Contents

I. Supply Portfolio Results Page #A. Key Performance Measures 4

B. Electric Supply Cost Chart – FY14 5

C. Electric Supply Cost Summary – FY14 6

II. Portfolio Hedge Strategy ReviewA. Hedge Position Chart 8

B. Block Purchase Plan 9

C. Proforma Hedge Position Chart 10

D. Forward Market Price Reports 11-12

E. Hourly Market Price Reports 13-15

III. Portfolio Billing RatesA. Portfolio Cost and Billing Rate History 17

B. Electric Supply Portfolio vs. DPL SOS Rate Summary 18

C. Working Capital – Billing Rate Comparison 19

D. FY14 Billing Rates by Rate Schedule 20

E. Billing Rate Alternatives 21

Appendix 23-29

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I. Supply Portfolio Results

4

ESMEC-ET Electric Supply PortfolioKey Portfolio MeasuresJanuary 2014

1. Total Supply Cost ($/MWh)

Actual O/(U) Budget Actual O/(U) Budget % O/(U) Budget

Unit Cost, $/MWh $165.97 $81.10 $101.60 $17.86 21.3%

Cost @ Volume** $2,467,695 $1,205,911 $9,422,869 $1,656,064 21.3%

* Subject to PJM 60 day settlement** Represents unit cost variance to budget, does not reflect volumetric valariance to budget

2. Replacement Value - Blocks - Current Market O/(U) Hedge Costs ($MM)

FY 2014 ($0.23)FY 2015 0.33

FY 2016+ 0.23 Total $0.32

3. Hedge Summary

Peak Off Total Peak Off TotalFY 2014 80% 75% 78% 87% 67% 79%FY 2015 80% 75% 78% 83% 67% 76%FY 2016 40% 38% 39% 42% 34% 38%FY 2017 0% 0% 0% 21% 34% 26%

4. Actual/ Forecasted Supply Cost ($ Mwh)

TotalSupply Cost $/MWh %

FY 2013 $80.79 ($0.25) -0.3%FY 2014 $97.50 $16.71 20.7%FY 2015 $76.00 ($21.50) -22.1%

YR to YR Incr/(decr)

Jan 2014* FY 2014 - Jan YTD *

Minimum Guideline Actual

5

$60 $65 $70 $75 $80 $85 $90 $95 $100 $105 $110 $115 $120 $125 $130 $135 $140 $145 $150 $155 $160 $165 $170

$60 $65 $70 $75 $80 $85 $90 $95

$100 $105 $110 $115 $120 $125 $130 $135 $140 $145 $150 $155 $160 $165 $170

$/MWh

ESMEC-ET Electric Supply Portfolio Cost FY 2014

Monthly Actual Prior Year YTD Actual Portfolio Budget Billed Rate

6

Total Supply Cost, Cumulative FY 2014ESMECUpdated: 2/12/2014

Final Final Final Final Final Prelim PrelimJul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Cumulative

PJM Load Charges - WGESEEst. Meter Volume, MWh 13,266 13,171 13,168 12,780 12,121 13,369 14,869 92,743

Energy - DA & RT $174,907 $123,555 $184,061 $85,860 $97,227 $141,823 $1,261,487 $2,068,919Ancillary Charges 49,164 71,675 109,059 110,636 88,411 81,739 275,366 786,050Transmission 55,064 54,989 53,252 54,996 53,211 54,964 50,562 377,039Capacity 240,427 240,174 232,311 239,098 231,728 237,776 238,594 1,660,109ARR/FTR & Marginal Loss (16,844) (13,671) (13,135) (12,669) (11,806) (13,722) (35,737) (117,584)Miscellaneous 0 0 0 0 0 0 0 PJM Electric Cost 502,718 476,722 565,548 477,922 458,772 502,581 1,790,271 4,774,534

60 Day Reconciliation (Included in Energy & Ancillary Above) (59,623) (41,606) 60,422 (29,586) (3,820) (74,212)

Bilateral Electric Cost 619,499 619,499 587,388 628,897 587,943 610,100 619,499 4,272,825

Other ChargesWGES Service Fee 17,855 18,148 14,604 16,343 14,880 16,269 18,094 116,193WGES Cost to Carry 0 0 0 0 0 0 0 0WGES Cost of Collateral 9,851 11,553 10,718 10,171 10,397 10,166 5,929 68,786WGES Fee for PES Block Delivery 2,530 2,530 2,448 2,530 2,451 2,530 2,530 17,547Renew able (RPS Requirement) 21,110 21,110 21,110 21,110 21,110 21,110 26,068 152,730Other Fees (MD PSC) 2,528 2,476 2,589 2,492 2,360 2,505 5,304 20,253 Subtotal 53,874 55,817 51,469 52,646 51,198 52,580 57,925 375,510

Total Supply Cost $1,176,091 $1,152,038 $1,204,405 $1,159,465 $1,097,913 $1,165,261 $2,467,695 $9,422,869

Unit Costs, $/MWh Energy $59.88 $56.41 $58.59 $55.93 $56.53 $56.24 $126.51 $68.38 Transmission $4.15 $4.17 $4.04 $4.30 $4.39 $4.11 $3.40 $4.07 Capacity 18.12 18.23 17.64 18.71 19.12 17.79 16.05 17.90 Ancillary Charges & Credit 2.44 4.40 7.28 7.67 6.32 5.09 16.12 7.21 Renew able (RPS Requirement) 1.59 1.60 1.60 1.65 1.74 1.58 1.75 1.65 Other 2.47 2.64 2.31 2.47 2.48 2.35 2.14 2.40 Total Supply Cost $88.65 $87.47 $91.47 $90.73 $90.58 $87.16 $165.97 $101.60Expected Unit Price $100.06 $85.57 $79.64 $82.28 $79.59 $73.73 $84.86 $83.75 Budget Variance ($11.40) $1.89 $11.83 $8.44 $11.00 $13.43 $81.10 $17.86

Hedge Settlement $1,686 $188,313 $135,648 $200,335 $171,267 $117,464 ($1,276,580) ($461,867) Unit Cost, $/MWh $0.04 $4.54 $3.27 $4.82 $4.12 $2.82 ($30.66) ($4.98)

7

II. Portfolio Hedge Strategy Review

8

Peak Off TotalFY 2014 87% 67% 79%FY 2015 83% 67% 76%FY 2016 42% 34% 38%FY 2017 21% 34% 26%

Actual Hedge %'s

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

MWhESMEC- ET -Current Electric Hedge Status, 2/18/2014

Total Load Max Hedge Purchased Min Hedge

Based on FY 2013 Gross Annual MWhs of 168,000

9

ESMEC-ET Scheduled Block PurchasesAs of 2/18/2014

Market (WH)2/14/14 Close

Term Volume, MW Type Delivery Execution ($/MW)

FY 20167/15 - 6/16 5.0 ATC WH By June 2014 $37.71

Market as of 1/6/14 $36.85

Note: Evaluate congestion price periodically prior to purchase

10

Peak Off TotalFY 2015 83% 67% 76%FY 2016 63% 67% 65%FY 2017 21% 34% 26%

Purchased & Scheduled Hedge %'s

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

MWhESMEC-ET Proforma Electric Hedge Status, 6/30/2014

Total Load Max Hedge Purchased Scheduled Min Hedge

Based on FY 2013 Gross Annual MWhs of 168,000

11

12

13

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

$120

$130

$140

ATC Average LMP-RT PJM Western Hub, 1998 - 1/2014

Avg-Monthly Avg-12 Mo

14

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

500%

550%

Peak Premium Ratio, 1998 - 1/2014

Avg-Monthly Avg-12 Mo

Jul '99 = 480.7%

15

-$5

$0

$5

$10

$15

$20

$25

$30

ATC Average LMP-RT PJM DPL Zone Basis, 1999 - 1/2014

Avg Monthly Avg-12 Mo

16

III. Portfolio Billing Rates

17

ESMEC Electric Supply PortfolioBudget, Actual and Billing Rates($ kwh)

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015

Portfolio budget rate $0.0912 $0.0900 $0.1000 $0.1000 $0.0950 $0.0840 $0.0870 $0.0830 $0.0760 (Revised)

Portfolio actual/forecast cost$0.0876 $0.0993 $0.0976 $0.0919 $0.0940 $0.0810 $0.0810 $0.0975 Actual o/(u) budget ($0.0036) $0.0093 ($0.0024) ($0.0081) ($0.0010) ($0.0030) ($0.0060) $0.0145

Approximate Weighted Average Billing Rates (1):

Billing months: Jul - Oct $0.0992 $0.0992 $0.1094 $0.1094 $0.0954 $0.0944 $0.0954 $0.0894 Approved Nov - Feb $0.0844 $0.0844 $0.0944 $0.0944 $0.0804 $0.0794 $0.0794 $0.0774 Approved Mar - Jun $0.0814 $0.0844 $0.0944 $0.0944 $0.0804 $0.0794 $0.0794 $0.0000 TBD

W/A billing rate $0.0885 $0.0894 $0.0995 $0.0995 $0.0855 $0.0845 $0.0849 $0.0000 TBD

FY 2014 if W/A Rate held at $.0774 thru June 2014 $0.0815

(1) Includes primary (GSP), secondary (LGS, SGS) and outdoor lighting (OL/ORL) rate schedules

Preliminary and forecast rates in blue

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$0.07000

$0.07500

$0.08000

$0.08500

$0.09000

$0.09500

$0.10000

$0.10500

$0.11000

$0.11500

$0.12000

FY07 FY08 FY09 FY10 FY11 FY12 FY13

Portfolio Cost Weighted Average Billing Rate DPL Standard Offer Service Rate

ESMEC-ET Electric Supply Rates ($/Kwh)$/kwh

ESMEC-ET Electric Supply Rates ($/Kwh)$/kwh

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$0.050

$0.060

$0.070

$0.080

$0.090

$0.100

$0.110

$0.120

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

W/C Avg Balance Actual Cost ($/KWh) Billing Rate($/KWh)

ESMEC-ET Electric Supply PortfolioAverage Working Capital (W/C) Balances Held with Supplier $/KWh

Jan '14 $.166 KWh

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ESMEC Electric Supply Portfolio Total Supply Cost Billing Rates by Rate Schedule ($ kwh)Fiscal Year 2014

Billing Period Summer Winter Spring

Status Approved Approved TBD

Supplier Billing Months July 2013 - Nov 2013 - Mar 2014 - Oct 2013 Feb 2014 Jun 2014

Meter Read Beginning: Jun 2013 Oct 2013 Feb 2014Meter Read Ending: Oct 2013 Feb 2014 Jun 2014

FY 2014W/A Billing

Delmarva Power Rate Schedule Rate

Secondary (SGS / SGS SH / LGS) $0.0900 $0.0780 TBD TBD

Primary (GSP) $0.0875 $0.0755 TBD TBD

Outdoor Lights (OL / ORL) $0.0750 $0.0630 TBD TBD

Weighted Average Rate $0.0894 $0.0774 TBD TBD

Estimated Portfolio Cost

Current Portfolio Forecast Rate $0.0975

Original Portfolio Budget Rate $0.0830

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2 B

End of Period End of Period End of Period End of PeriodFiscal Billing Billing Billing Rate Average W/C Billing Rate Average W/C Billing Rate Average W/C Billing Rate Average W/CYear Season Months $/KWh Balance $/KWh Balance $/KWh Balance $/KWh Balance

FY2014 Winter Nov-Feb $0.0774 $422,390 as of Jan '14 $0.0774 $422,390 as of Jan '14 $0.0774 $422,390 as of Jan '14 $0.0774 $422,390 as of Jan '14

FY 2014 Spring Mar -Jun $0.0900 ($596,669) $0.0900 ($596,669) $0.0774 ($1,110,384) $0.0774 ($1,110,384)

FY 2015 Summer Jul - Oct $0.1000 $582,758 $0.0850 ($24,308) $0.1000 ($95,773) $0.0900 ($500,484)FY 2015 Winter Nov-Feb $0.0780 $1,082,317 $0.0850 $547,481 $0.0850 $673,905 $0.0900 $330,211FY 2015 Spring Mar-Jun $0.0780 $1,393,532 $0.0850 $1,230,997 $0.0850 $1,357,421 $0.0900 $1,279,656

Actuals = BlackAlternatives = Blue

Increase Billing Rates Starting March 2014 - Different Summer/Non Summer Rates for

FY 2015

Hold Current Billing Rate thru June 2014 Different Summer/Non Summer Rates for

FY 2015

Hold Current Billing Rate thru June 2014 Same Summer/Non Summer Rates for FY

2015

ESMEC-ET Electric Supply Portfolio Billing Rate Alternatives

1 A 2 A1 B

Increase Billing Rates Starting March 2014 - Same Summer/Non Summer Rates for

FY 2015

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Appendix

23

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

kW

ESMEC Portfolio Hourly Load

Hourly Load 30 Day Average

RLR, 7/13 - 6/14 (through 11/13)

24

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

kW

ESMEC Portfolio Hourly Load

Hourly Load 30 Day Average

RLR, 7/12 - 6/13 (through 6/13)

25

ESMEC-ET - Open Block Purchase Transaction LogAs of: 2/18/14

Purchased Thru Pepco Energy ServicesPurchase Delivery Index Size Price

# Date Start Stop Type Point Settle (MW) ($MWh)5 11/23/09 Jul-13 Jun-14 ATC WH RT 5.00 $57.00

Purchased Thru Washington Gas Energy Services

7 9/12/11 Jul-12 Jun-14 Peak WH DA 5.00 $56.409 11/14/11 Jul-13 Jun-15 ATC DPL DA 5.00 $53.9511 9/19/12 Jul-13 Jun-14 Peak DPL DA 3.00 $49.1512 9/19/12 Jul-14 Jun-15 ATC DPL DA 5.00 $41.9013 3/15/13 Jul-13 Jun-14 Peak DPL DA 3.00 $52.6514 4/10/13 Jul-15 Jun-16 ATC DPL DA 5.00 $45.5515 7/2/13 Jul-14 Jun-15 Peak DPL DA 5.00 $50.0016 11/5/13 Jul-14 Jun-16 Peak DPL DA 5.00 $46.8017 11/20/13 Jul-16 Jun-17 ATC DPL DA 5.00 $40.25

LegendATC = Around the ClockWH = West HubDA = Day AheadRT = Real Time

26

($500,000)

($400,000)

($300,000)

($200,000)

($100,000)

$0

$100,000

$200,000

$300,000

$400,000

$500,000

Monthly Cumulative

ESMEC Electric Mark to Market, 2/18/2014

27

ESMEC-ET Electric Supply PortfolioCapacity and Transmission Tag Summary (MW)

Incr/(Decr) in Incr/(Decr) in12/13 Year 13/14 Year

Cost ($) Cost ($)11/12 12/13 13/14 MW % MW %

Unforced Capacity Obligation 35.7 33.8 31.4 (1.9) -5.4% (2.4) -7.0% ($119,381) ($214,791)

Incr/(Decr) in Incr/(Decr) inCal Year Cal Year

2013 Cost ($) 2014 Cost ($)2012 2013 2014 MW % MW %

Transmission Capacity 30.0 26.7 24.3 (3.3) -11.0% (2.4) -9.0% ($74,246) ($57,451)

(1) PJM Year June 1 - May 31

12/13 o/(u) 11/12PJM Year (1) 13/14 o/(u) 12/13

Impact of Inc/(decr) in UCAP MW

Impact of Inc/(decr) in Trans Cap MW

2014 o/(u) 20132013 o/(u) 2012Calendar Year

28

$15.00

$197.16

$150.53

$196.54 $187.37

$116.15

$171.24

$248.30

$142.99

$166.08

$118.89

$0

$50

$100

$150

$200

$250

$300

06/07 -Pre RPM

07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17

$/MWDPJM - DPL Capacity Prices

Final Zonal Net Load Prices through 13/14, PJM Base Residual Clearing Prices thereafter

29

ESMEC-ETMaryland Renewable Portfolio Requirements Actuals in Blue Based on Chapters 583, 556 and 653 enacted May 22, 2012 Estimates in RedRequired %'s Based on Grandfathered %'s per SB791Report as of : 1/31/14

Required % Amount

Total REC

Quantity (net)

Market Cost

($/MWh)

Market Cost ($)

Required % Amount

Total REC

Quantity

Market Cost

($/MWh)

Market Cost ($)

Required %

Amount

Total REC

Quantity

Market Cost

($/MWh)

Market Cost ($)

CY12 173,040 6.40% 11,075 4.15$ 45,959$ 0.1000% 173 170.00$ 29,417$ 2.5% 4,326 0.69$ 2,985$ 78,361$ CY13 171,402 8.00% 13,712 15.66$ 214,738$ 0.2000% 343 170.00$ 58,277$ 2.5% 4,285 2.05$ 8,784$ 281,799$ CY14 171,402 10.00% 17,140 -$ 0.3000% 514 -$ 2.5% 4,285 -$ -$ CY15 171,402 10.10% 17,312 -$ 0.4000% 686 -$ 2.5% 4,285 -$ -$ CY16 171,402 12.20% 20,911 -$ 0.5000% 857 -$ 2.5% 4,285 -$ -$ CY17 171,402 12.55% 21,511 -$ 0.5500% 943 -$ 2.5% 4,285 -$ -$ CY18 171,402 14.90% 25,539 -$ 0.9000% 1,543 -$ 2.5% 4,285 -$ -$ CY19 171,402 16.20% 27,767 -$ 1.2000% 2,057 -$ 0.0% N/A N/A N/A -$ CY20 171,402 16.50% 28,281 -$ 1.5000% 2,571 -$ 0.0% N/A N/A N/A -$ CY21 171,402 16.85% 28,881 -$ 1.8500% 3,171 -$ 0.0% N/A N/A N/A -$ CY22 171,402 18.00% 30,852 -$ 2.0000% 3,428 -$ 0.0% N/A N/A N/A -$ CY23 171,402 18.00% 30,852 -$ 2.0000% 3,428 -$ 0.0% N/A N/A N/A -$

Total Market Cost ($)

Compliance Year

Usage (MWh)

Tier I SREC (minimum portion of Tier 1) Tier 2