PA Supplier Workshop

1. PA Supplier Workshop

2. Agenda • Supplier Workshop Objective • Default Service Program V (“DSP V”) • Customer Referral Program Overview • Recent Issues • Incorrect Rate Ready enrollments • Open Forum • Customer Referral Program operational enhancements PA Supplier Workshop

3. Supplier Workshop Objective • Default Service Program IV (“DSP IV”) Settlement Term • The Companies agreed to reconvene their supplier workshops so that Customer Referral Program Suppliers and the Companies are provided a collaborative forum to discuss operational enhancements that can be implemented by the Companies and the EGS participants to improve administration of the program. PA Supplier Workshop

4. DSP V June 2019 – May 2023 *Change as compared to DSP IV PA Supplier Workshop

5. DSP V Terms June 2019 – May 2023 PA Supplier Workshop

6. DSP V Terms June 2019 – May 2023 *Change as compared to DSP IV PA Supplier Workshop

7. FERC 494 Issue • Docket No. EL05-121-009 concerns the reallocation of PJM Regional Transmission Expansion Plan charges for certain transmission facilities that operate at 500 kV and above within the PJM footprint. • The Companies’ will process all credits and/or charges resulting from the FERC Settlement on behalf of their customers and suppliers (both wholesale and retail) by directly passing the credits and/or charges on to their customers through the Companies’ Default Service Support (“DSS”) Riders. PA Supplier Workshop

8. Hourly Pricing Threshold • Companies will lower the hourly pricing threshold to 100 kW effective June 1, 2019 where smart meters will be used for hourly pricing billing. • Change complies with Commission’s policy statement in the Retail Market Investigation (RMI) proceeding. • Affects GS-Medium Customers as rate schedule will be split into GS-Medium (PTC) and GS-Medium (HPS). • These designations do not result in a new rate schedule. • Penn Power GS-Large will also move to Hourly Pricing. • GS-Large rate schedule was created in the 2014 base rate case. • Due to metering restrictions these customers have been served under the PTC Rider. • Smart meters are now installed to meter hourly pricing. PA Supplier Workshop

9. Hourly Pricing Threshold Communication Plan • Information on www.firstenergycorp.com: • Hourly Pricing Explanation; • The “What is Hourly Pricing” slideshow; and • Links for Electric Choice. • Customer notification letters - • All Met-Ed, Penelec and Penn Power GS-Medium & West Penn Power Schedule 30 Customers. • Series of three similar letters notifying all customers. • Letters to be mailed November 2018, January 2019 and April 2019. • Penn Power GS-Large customer notification letter - • Letters to be mailed November 2018, January 2019 and April 2019. PA Supplier Workshop

10. POR Clawback Charge • DSP IV two-year pilot extended in DSP V for four years. • Begins with charges assessed in September 2018 based on a review of data for the twelve months ended August 31, 2018 and ending with charges assessed in September 2021. • Two-prong test to calculate the charge: • EGSs whose average write-offs as a percentage of revenues over the 12-month period ending August 31 each year exceeds 200% of the average percentage of total EGS write-offs as a percentage of revenues per operating company. • Of those EGSs identified in the first prong, EGSs whose average price charged over the same 12-month period exceeds 150% of the average PTC for the period. • EGSs identified by both prongs are charged difference between an EGS’s actual write-offs and 200% of the average EGS write-offs per company. • Companies retain amounts charged to EGSs if each individual Company’s actual uncollectible accounts expense exceeds the amount of uncollectible expense in rates for the 12-month period ending August 31. • Companies refund the EGS charge to customers through the Default Service Support Rider if a Company’s actual uncollectible expense is less than the amount of uncollectible expense recovered in rates. PA Supplier Workshop

11. Purchase of Receivables EGS Arrears Report • The Companies committed to developing an EGS-specific customer arrears report with unpaid aged EGS account balances. • This report will be provided to EGSs participating in the purchase of receivables program. • The report will be issued on a quarterly basis. • 3rd quarter 2018 report was issued October 19, 2018. • 4th quarter 2018 report was issued January 15, 2019. • Information contained in the customer arrears report provided to each EGS shall only contain information regarding customers of that specific EGS. PA Supplier Workshop

12. CAP Shopping Limitations PA Supplier Workshop Effective June 1, 2019, customer assistance program (“CAP”) customers are prohibited from entering into any retail electricity contract with an EGS which would charge rates exceeding the applicable price to compare for the entire duration of the EGS contract. EGSs are not permitted to enter into contracts with CAP customers charging early termination or cancellation fees. EGS enrollments submitted for any CAP customers that do not meet these requirements will be rejected.

13. Transitioning CAP Shopping Customers PA Supplier Workshop • For the purpose of transitioning CAP customers who are currently being served by an EGS, as of June 1, 2019: • CAP customers who are served under a fixed duration contract with an EGS as of June 1, 2019 may remain with their EGS until the expiration date of the fixed duration contract or the contract is terminated, whichever comes first. • Non-CAP customers served under a fixed duration contract who subsequently enroll in CAP may remain with their EGS until the expiration date of the fixed duration contract or the contract is terminated, whichever comes first.

14. Transitioning CAP Shopping Customers PA Supplier Workshop • Upon expiration or termination of a pre-existing fixed duration contract, the EGS must either: (a) enroll the CAP customer under a contract compliant with the new CAP shopping rules; or, (b) return the CAP customer to default service. For EGSs serving CAP customers under a month-to-month contract as of June 1, 2019, the EGS must either: (a) return the CAP customer to default service effective June 1, 2019; or, (b) enroll the CAP customer under a compliant contract, with an effective date of June 1, 2019. • For EGSs serving non-CAP customers under a month-to-month contract who subsequently enroll in CAP, the EGS must either, within 120 days of the customer’s CAP enrollment: (a) return the CAP customer to default service; or, (b) enroll the CAP customer under a compliant contract.

15. CAP Shopping Mechanics PA Supplier Workshop Commission directed the Office of Competitive Market Oversight (“OCMO”) to convene a group of interested stakeholders for the purpose of collaboratively addressing the mechanics and details of the new CAP.

16. Customer Referral Program Continuation and Scripting PA Supplier Workshop • The program will continue through May 31, 2023. • Commission directed OCMO to convene a group of interested stakeholders for the purpose of collaboratively addressing the scripting and training materials associated with the program: • (a) to ensure that such scripting and training materials will provide sufficient consumer education/protections and disclaimers to customers that are not misleading, and • (b) to determine the impacts that such scripting and training materials may have on customer enrollment in the program as well as any other competitive concerns.

17. CAP Shopping Mechanics and Customer Referral Program Scripting PA Supplier Workshop OCMO held the stakeholder meeting on November 5, 2018. OCMO provided a report to the Commission with its recommendations. The Commission entered a Tentative Order on December 20, 2018 allowing a 30-day comment period for interested parties. Comments on the Tentative Order are due to the Commission by January 22, 2019.

18. Customer Referral Program Overview PA Supplier Workshop The program is designed to encourage shopping in the Companies’ Pennsylvania service territories. The program is offered to Met-Ed, Penelec, Penn Power, and West Penn Power non-shopping residential and small commercial customers. The program offers a 12-month fixed price that is set at 7% below the EDC’s current Price-To-Compare.

19. Customer Referral Program - Customer Process PA Supplier Workshop When a customer calls into the Companies’ Contact Center for a move-in, high billing question, or a question on energy choice, and are eligible, they will be offered the Customer Referral Program. If the customer decides to participate in this program, they will be transferred to our third party vendor to select a supplier from one of the participating suppliers.  If the customer doesn’t have a specific supplier in mind, a supplier will randomly be selected for the customer through a round robin selection.

20. Customer Referral Program - Supplier Process PA Supplier Workshop • A quarterly email is sent to all licensed suppliers in the Companies’ territories notifying them to express their intent to participate in the Customer Referral Program. • The supplier will be provided a deadline for their intent to participate. • The suppliers who wish to participate will send by email their contracts including Appendix C (Intent to Participate) stating what operating companies they wish to participate in. The supplier may participate in Residential and Small Commercial, separately or together. • For first-time participants, this is required no less than 60 days prior to the quarter.

21. Customer Referral Program - Supplier Process PA Supplier Workshop • The Price to Compare will be released during the months of January, April, July, and October, depending on the quarter. At this time an email will be sent to participating suppliers communicating the PTC, as well as an intent to withdraw date. • The participating suppliers will use the PTC to determine if they want to participate in the Customer Referral Program for the quarter.

22. Supplier Requirements PA Supplier Workshop • Must be a registered EGS for the territory in which they would like to participate (ME, PN, PP and/or WP).   • Must complete supplier registration. • Upon delivery of registration application and review of documents, the supplier will be contacted to complete EDI testing for Rate Ready billing.   • Assume load responsibility. • Accept and enroll all referred customers in the Customer Referral Program. • Utilize a Rate Ready bill method only. • Supplier must serve the customer on the Customer Referral fixed rate for 12 consecutive billing periods.

23. Supplier Requirements PA Supplier Workshop • The supplier must complete and sign the contract and, for first-time participants, return it at least 60 days prior to the start of the quarter if they wish to participate. • This contract does not need to be completed each time as long as nothing changes from previous quarter participation. • If the supplier totally withdraws for any quarter, the supplier will need to complete a new contract to participate. • Participating suppliers will be invoiced monthly.  Any accepted enrollment sent with the “Customer Referral” rate will be charged $30.00 per enrollment. Rejected enrollments are not charged. • The supplier is provided a timeline on the Companies’ website which provides dates for intent to participate and withdraw.

24. Customer Referral Program: In & Out of the Program PA Supplier Workshop • Customer Referral Suppliers begin participation in the Program effective on the following dates each year: March 1, June 1, September 1, or December 1. • A new Customer Referral Supplier must provide the initial notice of their intent to participate in the Customer Referral Program at least sixty days prior to the desired effective date. • A Customer Referral Supplier that has previously participated in the Company’s Customer Referral Programmust provide notice of their intent to participate at least thirty days prior to the desired effective date. • Note – If you are not rate ready tested for a Company in which you would like to participate, you must always follow the 60-day timeline.

25. 2019 Timeline - 60 Day PA Supplier Workshop

26. 2019 Timeline - 30 Day PA Supplier Workshop