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NYMEX N. Illinois Hub Electric Prices 12-Month Forward Prices Through July 15, 2010 *

NEU Electric and Natural Gas Price Update. Electric: Short-Term Outlook. PJM Day-Ahead Prices for ComEd Zone Average of Daily Hourly Prices Through 7/15/10.

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NYMEX N. Illinois Hub Electric Prices 12-Month Forward Prices Through July 15, 2010 *

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  1. NEU Electric and Natural Gas Price Update Electric: Short-Term Outlook PJM Day-Ahead Prices for ComEd ZoneAverage of Daily Hourly Prices Through 7/15/10 NYMEX Northern Illinois Hub forward prices for the August 2010 to July 2011 period are approximately $32.20 per MWH (3.22¢ per kWh). Peak prices are about $40.60 per MWH and off-peak prices are about $25.20 per MWH. PJM Chicago Zone Day-Ahead hourly index prices in June averaged $38.46 per MWH and Real-Time prices averaged $38.97 per MWH. These prices are up about $7.00 per MWH from May index prices. For the period July 1, 2010 through July 15, 2010, ComEd Day-Ahead prices are averaging about $38.00 per MWH and Real-Time prices are averaging about $44.00 per MWH. The Real-Time price difference is due to warmer than normal temperatures. Supplier margins, distribution costs, and PJM costs (transmission, capacity, ancillary, balancing operating reserve) must be added to obtain a ComEd metered cost. PJM Day-Ahead and Real-Time PricesComEd Zone NYMEX N. Illinois Hub Electric Prices12-Month Forward Prices Through July 15, 2010 * * ComEd prices are about $2 per MWH higher than NI-Hub prices. Peak prices are based on NERC wholesale pricing periods (6AM to 10 PM, M-F).

  2. NEU Electric and Natural Gas Price Update NYMEX Natural Gas Forward PricesThrough July 15, 2010 Natural Gas: Short-Term Outlook The Energy Information Administration (“EIA”) reported in its monthly Short-Term Energy Outlook issued on July 7, 2010 that Henry Hub natural gas prices are expected to average about $4.70 per MMBtu. This is an increase of $0.22 per MMBtu from its price reported in June 2010. The increase is due primarily to weather and increases in hurricane activity in the Gulf of Mexico. Prices in 2011 are expected to be about $5.11 per MMBtu. NOAA issued its hurricane outlook report in late May predicting above normal tropical weather activity during the 2010 hurricane season. An EIA computer simulation indicates a 17% to 20% probability that some natural gas and oil will be shut-in due to hurricanes in 2010. The volumes could equal or exceed 2008 volumes shut-in due to Hurricanes Gustav and Ike. Natural gas shut-in by these these hurricanes was about 166 Bcf. Natural gas storage through July 9, 2010 was 2,840 Bcf, slightly less than the 2,873 Bcf amount reported a year ago. Current volumes are about 11% higher than the five-year average.. NYMEX Natural Gas Settlement Prices on Last Trade Day of July 2010 Contract

  3. NEU Electric and Natural Gas Price Update EIA Weekly Storage ReportJanuary 2007 through July 9, 2010 Utility Natural Gas Supply Costs – July 2010$ per Therm Chicago citygate natural gas prices reported by Intercontinental Exchange (“ICE”) for the January 2009 to July 2010 period are summarized in the adjacent table. The July 2010 index price of $4.75 per MMBtu is $0.62 per MMBtu higher than the reported June 2010 index price. Daily prices in July, (through July 15, 2010) have averaged $4.52 per MMBtu which is about $0.23 lower than the July index price. Natural Gas Rig Count Through July 16, 2010

  4. On-Going NEU Regulatory Issues ComEd Files New Rate Increase Proposalon June 30, 2010 State of Illinois assesses this electric distribution tax on all utilities, and ComEd has historically recovered the tax in the monthly Facilities demand charge. The impact of the proposed IEDT charge will cause the average rate increase for large high-load factor customers, and for customers who use a significant amount of off-peak electricity, to be significantly more than the class average. The following summarizes ComEd’s proposed distribution rates. Commonwealth Edison Company (“ComEd”), filed its previously announced rate increase on June 30, 2010. In its petition filed with the Illinois Commerce Commission (“ICC”), ComEd has requested a $396.1 Million increase (20.4%). It is expected that this rate filing will be suspended for hearings by the ICC. The ICC has 45 days to act on the initial petition filed by ComEd. The ICC will have 11 months from the June 30 filing date to issue a final order. Summarized below are the proposed rate increase percentages by customer class. Results show that ComEd is proposing increases for Residential, Small and Extra Large customers greater than the overall percentage increase. ComEd’s Proposed Distribution Rates ComEd Rate Increase Percentages by Class • ComEd is also proposing the following changes: • Changing how residential rates are designed by moving towards a “Straight Fixed/Variable” method. Under the SFV method more costs are recovered through fixed charges. The SFV method will benefit ComEd by reducing revenue fluctuation due to changes in customer usage. • ComEd indicated they would file an Alternative Rate Regulation Plan (“ARRP”) in this proceeding within 60 days. Under this ARRP ComEd would propose additional rate increases. These rate increases would likely be included as additional surcharges on customer bills. The proposed class increase percentages are somewhat deceiving. ComEd is proposing to remove the Illinois Electric Distribution Tax (“IEDT”) from its base rates and collect this tax as a line item on customer bills. The line item tax would be a per kWh charge of all customers. The

  5. On-Going NEU Regulatory Issues – Continued – ComEd’s June 30, 2010 Rate Increase Proposal $19,608 per MW-Year = $0.0537 per kW day$0.0537 x 2,500 kW 8 30 days = $4,027.50 ComEd sets the customer Network Transmission PLC based on peak demands from the prior summer period. Results 2013 Capacity Cost The June 1, 2013 capacity value of $27.73 per MWH day was set by a PJM capacity auction in May 2010. The following figure shows capacity values since PJM implemented its Reliability Price Model (‘RPM”). All customers must pay for capacity to ensure generation reliability and send the proper forward price signal to attack new generation. Based on preliminary information ComEd may request special cost recovery for new programs such as: a) Accelerated Smart Grid investment b) Electric vehicle pilot program c) Accelerated infrastructure replacement It is uncertain what programs the filed plan will actually contain or what the proposed costs will be. This ARRP is similar to a proposal submitted by ComEd during the 2010 Legislative session that was subsequently withdrawn. ComEd proposed investing nearly $900 Million in smart grid technologies in its 2007 rate case. This proposal was eventually denied but a small pilot program was approved and implemented. The ICC recently approved an accelerated infrastructure program for Peoples Gas. PJM Capacity Values PJM Transmission and Capacity Charges PJM/Exelon Transmission Charge On June 1, 2010 Exelon Transmission updated its transmission charge effective June 1, 2010. The new Network Transmission Service Charge is $19,608 per MW-Year which is lower than the June 1, 2009 rate of $20,980 per MW-Year. Customers generally see transmission costs listed as a line item on their invoice from their supplier. If this cost is a direct pass-through it is generally shown as a daily cost per kW times the customers PLC (“peak load contribution”) times days in billing period. For example: NEU Energy Price Update is prepared by: Brad Fults, NEU Staff Support, Progressive Energy Solutions, LLC Email: bfults@progressiveenergyllc.com; Phone: 763-424-2377 Contact either Brad Fults or Charles Drake if you have questions about information in this bulletin or if you would like information about the NEU. Charles Drake can be reached at (630) 631-7963.

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