PPLElectricUtilitiesCorporationDefaultServiceProcurementPlan

(October2020Solicitation)

BidderInformationWebcast

Wednesday,September2,2020

JimRouland(PPLElectric)

BenChee(NERA)

JuliRaventos(NERA)

ChristianPark(NERA)

Questions

Tosubmitquestionstothepanelists,pleaseclickonthe“Chat”onthebottomofyourscreen;thechatwillappearontheright;typeinyourquestionandclick“Enter”tosubmityourquestion

AllpresentationmaterialsandQ&Aswillbepostedto:http://www.ppldsp.com

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Disclaimer

Anystatementshereindescribingorreferringtodocumentsandagreementsaresummariesonly,andarequalifiedintheirentiretybyreferencetosuchdocumentsandagreements.

Thegoverningdocumentsare:‒ theCommission’sOrderdatedOctober27,2016relatedtoPPL

Electric’sDefaultServicePrograminDocketNo.P‐2016‐2526627‒ DefaultServiceRFPRules‒ DefaultServiceSupplierMasterAgreement(“DefaultService

SMA”)‒ theCommission’sOrderdatedMay17,2018relatedtoPPL

Electric’sTime‐Of‐UsePrograminDocketNo.M‐2016‐2578051

PleaseseetheRFPwebsiteforcompletedocumentationhttp://www.ppldsp.com

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Agenda

ScopeofPresentation RegulatoryBackgroundandUpdate RFPTimeline ProductsSolicited

ScopeofPresentation

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Multi‐SolicitationProcess

FullRequirementsRFPforload‐following,fullrequirementsproducts

Eight(8)solicitationsplannedbetweenApril2017andOctober2020‒ April2017‒ October2017‒ April2018‒ October2018‒ April2019‒ October2019

April2020‒ October2020(thissolicitation)

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PresentationisspecifictoOctober2020

ThisPresentationisfocusedonlyoninformationspecifictotheOctober2020Solicitation

AseparatepresentationwithinformationcommontoallsolicitationsregardingtheDefaultServiceRFPprocessandthequalificationrequirementsisprovidedontheRFPwebsiteunderthe“Documents”pageofthe“DefaultServiceRFP”section

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SummaryofUpdates

LettersofCreditshouldbedeliveredatthefollowingaddress:PPLElectricUtilitiesCorporation2NorthNinthStreet(TW20)Allentown,PA18101Attn:JamesM.Rouland,RegulatoryPolicyManager

AnelectronicsignatureincludesdigitalsignaturesforuseintheRFPandSMAdocuments;Attestation/WitnessRequirementsarewaived

TimeProvidedforConfirmingReceiptofBidProposalSpreadsheetshasbeenchangedfrom30minutesto60minutes

UpdatedBindingBidWithdrawalAgreement(RFPAppendix10):AcceptanceofbidderspecificpasswordasalternativetosignatureonBindingBidWithdrawalAgreement

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RegulatoryBackgroundandUpdate

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TheFourthDefaultServiceProgram(DSPIV)

InJanuary29,2016,PPLElectricfiledapetitionforapprovalofitsfourthDefaultServiceProgramandProcurementPlan(“DSPIV”)fortheperiodofJune1,2017toMay31,2021

‒ July19,2016:JointPetitionforApprovalofPartialSettlement

‒ October27,2016:CommissionOrderapprovingJointPetition

Thedefaultserviceplancontains8solicitationsbetweenApr.2017throughOct.2020forFullRequirementsService:

‒ FixedPriceProductsforResidentialandSmallC&ICustomerGroups

‒ SpotMarketProductsfortheLargeC&ICustomerGroup

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DSPIVTOUProgram

InAugust10,2017,PPLElectricfiledapetitionforapprovalofnewpilotTOUProgram fortheperiodsameastheremainingDSPIV

‒ March13,2018:JointPetitionforSettlement

‒ May17,2018:CommissionOrderapprovingJointPetition

TheTOURFPisseparatefromtheDefaultServiceRFP

‒ TOUbidsfortheResidentialandSmallC&ICustomerGroupareseparate

‒ ThefirstTOUsolicitationtookplaceafterDefaultServiceApril2019solicitation;TOUsolicitationstakeplaceaftereachDefaultServicesolicitation

‒ ThefourthTOUsolicitationwilltakeplaceimmediatelyfollowingthecompletionofthisDefaultServiceOctober2020solicitation;theTOURFPBidDateisscheduledforNovember10,2020

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DSPIVTOUProgram(cont’d)

Biddersbid%discounttothegenerationportionofthePrice‐to‐Compare(“PTC”)

‒ PTCisexpectedtobereleasedonNovember1,2020

‒ PTCisseparateforeachofResidentialandSmallC&ICustomerGroups

TOULoadisexcludedfromDSLoadifthereisaTOUsupplier

‒ Currently,pursuanttotheTOUcontingencyplan,theTOULoadisincludedintheDSLoad

‒ DSsuppliersareservingTOULoadaspartoftheDSLoad

‒ IfNovember2020TOURFPhasawinningTOUsupplierforacustomergroup,TOULoadwillbeexcludedfromtheDSLoadforthatcustomergroup

‒ TOULoaddatawillbeavailableontheDatapageoftheRFPwebsite

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OtherDSPIVElements

StandardOfferProgram(SOP)‒ UnderDSPIV,PPLElectricwillcontinuetheSOPthroughthetermoftheplan

withlimitedmodifications‒ CustomersareabletosignupforSOPonlinethroughthe“ChooseYour

Supplier”pageorbysigningupasanewormovingcustomer

CustomerAssistanceProgramStandardOfferProgram(CAPSOP)‒ PerDSPIVsettlement,PPLElectricimplementedaCAPSOP‒ ThisprogrammirrorsthebaseSOP,withafewexceptions:

OnlyPPLElectricCAPcustomersmayparticipateintheprogram; EGSsmustseparatelyelecttoparticipateintheCAPSOP; attheconclusionofthe12‐monthcontract,CAPcustomersmustbe

returnedtoDefaultServiceor beenrolledinthenewCAPSOP(i.e. notcontinueshoppingonanon‐CAPSOPrate)

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PASolar– ClosingtheStateBorders

InOctober2017,thePennsylvaniaStateLegislaturepassedanadjustmenttoAct40,anamendmenttothePAAEPSActof2007,effectivelyclosingtheStateborderstosolargenerationoutsideofPennsylvania

ThePUCissuedanImplementationOrderinJuly2018,andaReconsiderationOrderinAugust2018.TheOrdersassertthatanySolarAECsusedforanLSE’ssolarAEPScomplianceobligationmustbegeneratedwithinPennsylvania

ContractsthatwereenteredintobypartiespriortotheAct40amendmentutilizingSolarAECsfrompreviouslyapprovedoutofstatesolargenerationsourcesmayfileapetitionwiththePUCforapproval

SolarAECsalreadygeneratedfrompreviouslyapprovedsolarsources(includingthoseoutsideofPA)aregrandfatheredanddeemedavailableforusetocomplywiththesolarAEPScomplianceobligation

FromtheOctober2018solicitationandon,SolarAECsmustbegeneratedfromwithintheStateofPennsylvania,orfromafacilityapprovedbythePUCAEPSManager

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DSPVandOtherUpdates

PPLElectricDefaultServicePlanV(“DSPV”)– DocketNo.P‐2020‐3019356‒ TheDSPVwasfiledbyPPLElectricinMarch2020.

‒ PPLElectric’sPetitionforDSPVincludes:updatestocustomerproductmixes,theintroductionofanAEC‐onlyauction,updatestoTOU,proposalofarenewableenergyrateprogram,andupdatestotheCAPSOPandbaseSOPprograms.AllelementsoftheCompany’spetitionarependingbeforetheAdministrativeLawJudge(“ALJ”)andPUC.

‒ TheALJ’srecommendeddecisionisexpectedinOctober2020.

‒ ThePUCFinalOpinionandOrderisexpectedinDecember2020.

FERCMinimumOfferPricingRule(“MOPR”)‒ InDecember2019,theFERCorderedPJMto adopt changestothedesignofthecapacitymarket,

expandingtheMOPRtoinclude additional state‐subsidizedcapacityresources.

‒ InApril2020,theFERCissuedanOrderonRehearingandClarificationwherebytheFERCheldthatstatedefaultserviceauctionscouldmeetthedefinitionofastate subsidy.PJMhassincecompletedacompliancefilingwiththeFERC,whichiscurrentlypendingapproval.

‒ TheFERCMOPRisdirectedatPJMandgenerationresourcesthatparticipateinthecapacitymarket–notEDCslikePPLElectric.WhiletheMOPRcouldaffectthePPLElectricauctions,specificallyasitpertainstosettingcapacityprice– theCompanyhasnopositiontoprovideorinformationtocommunicatependingthePJMcompliancefiling.

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DSPVandOtherUpdates(cont.)

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PennsylvaniaMoratorium‒ GovernorWolf,inconjunctionwiththePAPUC,continuestomaintainamoratoriumontermination

ofcustomerserviceduetolackofpayment.

‒ ThiswillnotaffectPPLElectricdefaultservicesuppliers.Perthetermsofdefaultservicewholesalecontracts,wholesalesuppliersarestillobligatedtoprovideserviceforallscheduleddefaultservicecustomers,andPPLElectricisobligatedtopaysuppliersforsuchservice.Todate,themoratoriumhasnotimpacteddefaultservicecontractsanditisnotexpectedtoimpactthesecontractsgoingforward.

RFPTimeline

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SolicitationisinThreeSteps

Step1• BidderQualification• RFPBidderssubmitqualificationmaterialsthroughonlineform• DueDate:12pm(noon)EPTonSeptember14,2020

Step2• BidAssuranceCollateral/SMA• RFPBidderssubmitfinancialguaranteesandsignedcontracts• DueDate:12pm(noon)EPTonOctober2,2020

Step3• BidProposals• QualifiedRFPBidderssubmitBids• DueDate:10am– 12pmEPTonOctober6,2020

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October2020RFPSchedule

BidderInformationSession Wednesday,September2BidderQualificationsDue*– NOONEPT Monday,September14QualifiedBiddersNotified Monday,September28BidderTraining Tuesday,September29BidAssuranceCollateralandSMADue– NOONEPT Friday,October2BidProposalsDue– NOONEPT Tuesday,October6PUCDecision Thursday,October8

TransactionConfirmation(s)Executed– 2PMEPT Tuesday,October13

*Ifqualificationmaterialsaredeficient,RFPBiddersmustrespondbythedeadlinespecifiedinthedeficiencynotice.This isgenerallyby6PMonthesecondbusinessdayfollowingthefirstdeficiencynotice.Ifadditionalinformationisrequired,RFPBiddersmustrespondbythedeadlinespecifiedinanysubsequentdeficiencynotice.InnoeventwillanRFPBidderbeallowedtocontinuetocureitsdeficiencyaftertheCureDeficiencyDeadline.

LoginCredentialstoQualificationForm

YouwillreceiveanemailfromPPL‐Procurement@nera.comwiththesubjectline“PPLElectricRFP:LoginCredentialsandInstructions”.Clickonthe“AccessMessage”buttontosetupandactivateyouraccount.Onceyoucompletethesetup,youwillbeabletodownloadthelogincredentials.

Step1:SubmittheQualificationForm

1. ExpressionofInterest2. ConfidentialityAgreement3. PJMandFERCQualifications4. CreditApplicationandFinancialInformation5. BindingBidAgreement

6. DesignationofAdditionalRepresentatives7. ProposedModificationstoBidAssuranceLOC8. ProposedModificationstoPerformanceAssuranceLOCandGuaranty

RequiredintheQualificationForm:RequiredintheQualificationForm:

OptionalintheQualificationForm:OptionalintheQualificationForm:

DueDate:12pm(noon)EPTonSeptember14

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AbbreviatedProcessforRFPBidderQualifiedforPreviousSolicitation

ExpressionofInterest ConfidentialityAgreement PJMandFERCQualifications1. CreditApplicationandFinancialInformation2. BindingBidAgreement

6. DesignationofAdditionalRepresentatives7. ProposedModificationstoBidAssuranceLOC8. ProposedModificationstoPerformanceAssuranceLOCandGuaranty

RequiredintheQualificationForm:RequiredintheQualificationForm:

OptionalintheQualificationForm:OptionalintheQualificationForm:

DueDate:12pm(noon)EPTonSeptember14

ResubmitAppendix6orRefreshusingAppendix6b

Resubmit

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Step2:BidAssuranceCollateral/SMA

BidAssuranceCollateral‒ $500,000pertranche‒ intheformofaletterofcreditorcash

Onescannedsignedcopyoftheentire DefaultServiceSMAmustbereceivedbyuploadtotheRFPwebsite,includingtheFormofNoticefilledinwiththeappropriatecontactinformation

RFPBiddersthathavepreviouslysubmittedDefaultServiceSMAsinDSPIVdonotneedtodosoagain,butareresponsibleforprovidinganyupdates

DueDate:12pm(noon)EPTonOctober2

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Step3:SubmitBidProposals

BidProposalDueDateofOctober6‒ SubmissionWindow:10AM– 12PM(noon)EPT

OneBidProposalSpreadsheetforeachProduct‒ DifferentspreadsheetsforRESandSC&Iproducts‒ AllshadedcellsonSpreadsheetmustbecompleted

BidProposalSpreadsheetsmustbesubmittedonlinebyelectronicfiletransfer tothePPLElectricsecureserver

ProductsSolicited

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BidProducts

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CustomerGroup

ProductDescription

DeliveryPeriod(Beginningon

December1,2020)

TranchestobeProcured

TrancheSize

Residential FixedPrice12months 16 2.50%

6months 8 2.50%

SmallC&I FixedPrice12months 5 5.00%

6months 9 5.00%

SuppliersprovideFullRequirementsServiceandarepaidafixedprice($/MWh)

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TwoTypesofLoadCaps

MaximumnumberoftranchesRFPBiddercanbidonisbasedon:‒ An85% solicitationloadcapbasedontranchesineachsolicitation

‒ A50% aggregateloadcap basedonpercentofdefaultserviceloadofaCustomerGroupaRFPBiddercanserveatanygivenpointintime AppliestobothResidentialandSmallC&I Limitontranchesbidinagivensolicitationwilltakeintoaccount

percentageofloadassociatedwithtrancheswonunderpriorFullRequirementsRFPsunderDSPIV

Product AvailableTranches

SolicitationLoadCap

MaximumTranchesBiddercanBid

ResidentialFixedPrice(12‐mo) 1685% 20

ResidentialFixedPrice(6‐mo) 8SmallC&IFixedPrice(12‐mo) 5

85% 11SmallC&IFixedPrice(6‐mo) 9

AEPSandAllocatedAECs

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ReportingPeriod TierI SolarPV TierII

6/1/2020– 5/31/2021 8.5% 0.5000% 10.00%

6/1/2021– 5/31/2022 8.5% 0.5000% 10.00%

TherewillbenoAECsallocatedtoSuppliersparticipatingintheOctober2020solicitation

SeeExhibit2ofSMAissuedforOctober2020solicitationfordetails

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DataandDocumentsProvidedonRFPwebsite

AlldocumentsrequiredforParticipation:‒ RFPRulesandAddendums

‒ DefaultServiceSMAandsampleExhibits

‒ Creditinstruments

‒ BidProposalSpreadsheets

‒ Trainingmaterials

Data:‒ HistoricalLoadData

‒ DefaultServiceLoadData

‒ BilledSales&Counts

‒ NYPASupplyDataandNYPAContract

‒ PJMDerationFactors

‒ DailyICAP&NITSTagData

‒ CapacityandNSPLData

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HeadsUp!TOURFPtobereleasedOct.12

AllqualifiedbiddersundertheDefaultServiceRFPmayparticipateinanabbreviatedprocesstoqualifyfortheTOURFP

TOURFPseekstosecuresupplyforTOUCustomersintheResidentialandSmallC&ICustomerGroups

ForaCustomerGroup,oneTOUSupplieristoserve100%oftheTOULoadforthatCustomerGroup

TOUSupplierispaidOn‐PeakPricefortheTOUsupplyduringon‐peakhoursandOff‐PeakPricefortheTOUsupplyduringoff‐peakhours

BiddersareprovidedwiththegenerationportionofPrice‐to‐ Compare(“PTC”)andon‐peakmultiplier

ABidisforpercentagediscount(%)belowthegenerationportionofPTC,whichsetstheOff‐PeakPrice

On‐PeakPriceisproductofOff‐PeakPriceandon‐peakmultiplier

Questions

Tosubmitquestionstothepanelists,pleaseclickonthe“Chat”onthebottomofyourscreen;thechatwillappearontheright;typeinyourquestionandclick“Enter”tosubmityourquestion