ESMEC-ET Electric Portfolio ReportApril 4, 2014 (Revised April 7, 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 Review

A. 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 Rates

A. 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. Billing Rate Alternatives 20

E. FY14 Billing Rates by Rate Schedule 21

F. Proposed FY 15 Billing Rates by Rate Schedule 22

Appendix 24-31

3

I. Supply Portfolio Results

4

ESMEC-ET Electric Supply PortfolioKey Portfolio MeasuresFebruary 2014

1. Total Supply Cost ($/MWh)

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

Unit Cost, $/MWh $97.22 $16.05 $101.72 $18.24 21.9%

Cost @ Volume** $1,223,728 $202,027 $10,671,974 $1,913,869 21.9%

* 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 ($0.15)

FY 2015 0.62

FY 2016+ 0.36

Total $0.83

3. Hedge Summary

Peak Off Total Peak Off Total

FY 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)

Total

Supply Cost $/MWh %

FY 2013 $80.79 ($0.25) -0.3%

FY 2014 $100.00 $19.21 23.8%

FY 2015 $76.00 ($24.00) -24.0%

YR to YR Incr/(decr)

Feb 2014* FY 2014 - Feb YTD *

Minimum Guideline Actual

5

$60

$65

$70

$75

$80

$85

$90

$95

$100

$105

$110

$60

$65

$70

$75

$80

$85

$90

$95

$100

$105

$110

$/MWh

ESMEC-ET Electric Supply Portfolio Cost FY 2014

Monthly Actual Prior Year YTD Actual Portfolio Budget Billed Rate

Jan 2014 =$165.97

6

Total Supply Cost, Cumulative FY 2014ESMECUpdated: 3/17/2014

Final Final Final Final Prelim PrelimSep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Cumulative

PJM Load Charges - WGESEEst. Meter Volume, MWh 13,168 12,780 12,121 12,957 14,869 12,587 104,918

Energy - DA & RT $184,061 $85,860 $97,227 $125,866 $1,261,487 $324,855 $2,377,817Ancillary Charges 109,059 110,636 88,411 88,887 275,366 33,603 826,801Transmission 53,252 54,996 53,211 54,964 50,562 45,939 422,978Capacity 232,311 239,098 231,728 237,776 238,594 215,257 1,875,366ARR/FTR & Marginal Loss (13,135) (12,669) (11,806) (13,722) (35,737) (18,617) (136,201)Miscellaneous 0 0 0 0 0

PJM Electric Cost 565,548 477,922 458,772 493,772 1,790,271 601,037 5,366,761

60 Day Reconciliation (Included in Energy & Ancillary Above) 60,422 (29,586) (3,820) (8,809) (83,021)

Bilateral Electric Cost 587,388 628,897 587,943 610,100 619,499 560,760 4,833,585

Other ChargesWGES Service Fee 14,604 16,343 14,880 16,269 18,094 15,317 131,511WGES Cost to Carry 0 0 0 0 0 7,568 7,568WGES Cost of Collateral 10,718 10,171 10,397 10,166 5,929 8,064 76,850WGES Fee for PES Block Delivery 2,448 2,530 2,451 2,530 2,530 2,285 19,832Renew able (RPS Requirement) 21,110 21,110 21,110 55,242 26,068 26,068 212,930Other Fees (MD PSC) 2,589 2,492 2,360 2,559 5,304 2,630 22,938 Subtotal 51,469 52,646 51,198 86,767 57,925 61,931 471,628

Total Supply Cost $1,204,405 $1,159,465 $1,097,913 $1,190,639 $2,467,695 $1,223,728 $10,671,974

Unit Costs, $/MWh Energy $58.59 $55.93 $56.53 $56.80 $126.51 $70.36 $68.73 Transmission $4.04 $4.30 $4.39 $4.24 $3.40 $3.65 $4.03 Capacity 17.64 18.71 19.12 18.35 16.05 17.10 17.87 Ancillary Charges & Credit 7.28 7.67 6.32 5.80 16.12 1.19 6.58 Renew able (RPS Requirement) 1.60 1.65 1.74 4.26 1.75 2.07 2.03 Other 2.31 2.47 2.48 2.43 2.14 2.85 2.47 Total Supply Cost $91.47 $90.73 $90.58 $91.89 $165.97 $97.22 $101.72

Expected Unit Price $79.64 $82.28 $79.59 $73.73 $84.86 $81.17 $83.48 Budget Variance $11.83 $8.44 $11.00 $18.16 $81.10 $16.05 $18.24

Hedge Settlement $135,648 $200,335 $171,267 $117,464 ($1,276,580) ($293,414) ($755,281) Unit Cost, $/MWh $3.27 $4.82 $4.12 $2.82 ($30.66) ($7.04) ($7.20)

7

II. Portfolio Hedge Strategy Review

8

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, 3/18/2014

Total Load Max Hedge Purchased Min Hedge

Based on FY 2013 Gross Annual MWhs of 168,000

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

9

ESMEC-ET Scheduled Block PurchasesAs of 3/18/2014

Block Size Target

Term MW Type Delivery Execution 3/14/14 2/14/14 1/6/14

FY 2016

7/15 - 6/16 5.0 ATC WH By June 2014 $38.87 $37.71 $36.85

FY 2015 - Winter*Recommended

Additional %

Month On Peak Off Peak Hedge On Peak Off Peak 3/14/14 12/3/13 Increase

Jan-15 77% 63% 3 MW ATC 88% 82% $56.37 $40.66 39%Feb-15 80% 59% 3 MW ATC 92% 77% $53.26 $38.53 38%

*Timing of FY15 additional winter hedges will be driven by market prices during Spring-Summer-Fall of 2014

Note: Congestion prices evaluated on an ongoing basis to determine purchase at West Hub or BGE Zone Delivery point

WH NYMEX Close as of:

Current Hedge Pro forma Hedge WH NYMEX Close as of:

10

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

Peak Off TotalFY 2015 85% 70% 79%FY 2016 63% 67% 65%FY 2017 21% 34% 26%

Purchased & Scheduled Hedge %'s

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 - 3/2014

Avg-Monthly Avg-12 Mo

14

0%

50%

100%

150%

200%

250%

300%

Peak Premium Ratio- DPL, 2001 - 3/31/2014

Avg Monthly Avg-12 Mo

15

-$5

$0

$5

$10

$15

$20

$25

$30

ATC Average LMP-RT PJM DPL Zone Basis, 1999 - 3/31/2014

Avg Monthly Avg-12 Mo

16

III. Portfolio Billing Rates

17

ESMEC-ET 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 $0.1000 (Revised) Actual o/(u) budget ($0.0036) $0.0093 ($0.0024) ($0.0081) ($0.0010) ($0.0030) ($0.0060) $0.0170

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

18

$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

19

$0.050

$0.060

$0.070

$0.080

$0.090

$0.100

$0.110

$0.120

($1,000,000)

($500,000)

$0

$500,000

$1,000,000

$1,500,000

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

20

2 B

End of Period Month Average End of Period Month Average End of Period Month Average End of Period Month Average

Fiscal Billing Billing Billing Rate Excess/(Deficient) Billing Rate Excess/(Deficient) Billing Rate Excess/(Deficient) Billing Rate Excess/(Deficient)

Year Season Months $/KWh Working Capital Balance $/KWh Working Capital Balance $/KWh Working Capital Balance $/KWh Working Capital Balance

FY2014 Winter Nov - Mar $0.0774 ($772,223) as of Feb '14 $0.0774 ($772,223) as of Feb '14 $0.0774 ($772,223) as of Feb '14 $0.0774 ($772,223) as of Feb '14

FY 2014 Spring Apr - Jun $0.0900 ($1,322,269) $0.0850 ($1,453,943) $0.0774 ($1,654,087) $0.0774 ($1,654,087)

FY 2015 Summer Jul - Oct $0.0975 ($214,054) $0.1000 ($309,953) $0.1000 ($609,510) $0.0910 ($973,750)

FY 2015 Winter Nov - Feb $0.0825 $426,171 $0.0850 $459,725 $0.0850 $160,168 $0.0910 ($91,274)

FY 2015 Spring Mar - Jun $0.0825 $976,723 $0.0850 $1,143,241 $0.0850 $843,684 $0.0910 $911,356

FY 2015 W/A Rate $0.0876 $0.0901 $0.0901 $0.0910

Cost of Carry on Deficient Working Capital Balances (Rate of .98% monthly or 11.76 % annually)

Cost of Carry Cost of Carry Cost of Carry Cost of Carry

FY 2014 Spring Apr - Jun ($39,048) ($40,990) ($43,942) ($43,942)

FY 2015 Summer Jul - Oct ($28,988) ($34,763) ($46,506) ($53,529)FY 2015 Winter Nov - Feb $0 $0 ($2,763) ($15,490)FY 2015 Spring Mar - Jun $0 $0 $0 $0

Total FY 2015 ($28,988) ($34,763) ($49,269) ($69,018)

Actuals = Black

Alternatives = Blue

FY 2015: Different Summer/Non Summer Rates FY 2015: Different Summer/Non Summer Rates FY 2015: Different Summer/Non Summer Rates FY 2015: Same Summer/Non Summer Rates

FY 2014: Increase Apr - Jun Rates FY 2014: Keep current billing rates FY 2014: Keep current billing ratesFY 2014: Increase Apr - Jun Rates

ESMEC-ET Electric Supply Portfolio Billing Rate Alternatives

1 A 2 A1 B

April 4, 2014 (Revised April 7,2014)

21

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

Billing Period Summer Winter Spring

Status Approved Approved Approved

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

Meter Read Beginning: Jun 2013 Oct 2013 Apr 2014Meter Read Ending: Oct 2013 Mar 2014 Jun 2014

FY 2014W/A Billing

Delmarva Power Rate Schedule Rate

Secondary (SGS / SGS SH / LGS) $0.0900 $0.0780 $0.0855 $0.0845

Primary (GSP) $0.0875 $0.0755 $0.0830 $0.0821

Outdoor Lights (OL / ORL) $0.0750 $0.0630 $0.0705 $0.0696

Weighted Average Rate $0.0894 $0.0774 $0.0849 $0.0839

Estimated Portfolio Cost

Portfolio Forecast Rate as 3/2014 $0.1000

Original Portfolio Budget Rate $0.0830

22

ESMEC-ET Electric Supply Portfolio 4/7/14Total Supply Cost Billing Rates by Rate Schedule ($ KWh)Fiscal Year 2015

Billing Period Summer Winter Spring

Status Preliminary Preliminary Preliminary

Supplier Billing Months July 2014 - Nov 2014 - Mar 2014 - Oct 2014 Feb 2015 Jun 2014

Meter Read Beginning: Jun 2014 Oct 2014 Feb 2015Meter Read Ending: Oct 2014 Feb 2015 Jun 2015

FY 2015W/A Billing

Delmarva Power Rate Schedule Rate

Secondary (SGS / SGS SH / LGS) $0.1010 $0.0860 $0.0860 $0.0911

Primary (GSP) $0.0985 $0.0835 $0.0835 $0.0888

Outdoor Lights (OL / ORL) $0.0860 $0.0710 $0.0710 $0.0761

Weighted Average Rate $0.1004 $0.0854 $0.0854 $0.0906

Estimated Portfolio Cost

Original Portfolio Budget Rate $0.0730

Revised Portfolio Budget Rate $0.0760

23

Appendix

24

Annual $ Cost Incurred/(Avoided)

from Usage Purchased on the

Hourly Market

Cumulative MWhsAnnual $/MWh Cost Incurred/(Avoided)

Cumulative $/MWh

FY 2007 ($496,290) ($496,290) 136,575 ($3.63) ($3.63)FY 2008 $18,704 ($477,586) 158,298 $0.12 ($1.62)FY 2009 ($250,938) ($728,523) 157,558 ($1.59) ($1.61)FY 2010 ($804,674) ($1,533,197) 156,722 ($5.13) ($2.52)FY 2011 ($740,140) ($2,273,337) 173,168 ($4.27) ($2.91)FY 2012 ($503,003) ($2,776,340) 158,726 ($3.17) ($2.95)FY 2013 ($302,001) ($3,078,342) 158,068 ($1.91) ($2.80)

FY 2014 Thru Feb $323,627 ($2,754,715) 104,919 $3.08 ($2.29)

Footnotes

Based on the monthly unhedged volume (KWh) times the monthly hedge net settlement price ($/MWh) for the hedged volumes (KWh) each month

Monthly hedge net settlement price represents the difference between the fixed rate and hourly energy prices for the hedged volumes (KWh).

ESMEC-ETNet Costs Incurred/(Avoided) from Usage Purchased on the Spot Market (Hourly Prices)

25

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 12/13)

26

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)

27

ESMEC-ET - Open Block Purchase Transaction LogAs of: 3/18/14

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

28

($200,000)

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

Monthly Cumulative

ESMEC Electric Mark to Market, 3/17/2014

29

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

Incr/(Decr) in Incr/(Decr) in

12/13 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

30

$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

31

ESMEC-ET

Maryland 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 : 3/14/14

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 $15.67 214,819$ 0.2000% 343 $170.00 58,277$ 2.5% 4,285 $3.35 14,361$ 287,456$ 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