GreenUp and the Competitive Opportunities Plan

February 8, 2005

Albany Collaborative Session

Objectives Maintain and Enhance GreenUp

Program Offerings in Competitive Market

Maintain Consistency with New York Reporting and Conversion Regulations

Minimize Overhead and Information System Costs Associated with Program Implementation

GreenUp Today

Provided to Niagara Mohawk Commodity Customers only

GreenUp Supplier Procures Renewable Energy and Markets to Retail Customers

Niagara Mohawk Reports Energy on the GreenUp Supplier’s Behalf in Lieu of Spot Market Purchases—the Conversion Transaction

Niagara Mohawk Reports GreenUp Sales and Purchases to the Commission; Streams Sales to the GreenUp Supplier

GreenUp Supplier Issues Disclosure Label

GreenUp Today

Four Suppliers and Five Products— Community Energy

– 60% Wind / 40% Hydro $0.01 per kwh– 100% Wind $0.02 per kwh

Green Mountain Energy– 50% Wind / 50%Hydro $0.013 per kwh

Sterling Planet– 40% Wind / 30% Hydro / 30% Bio – $0.015 per kwh @ 50% / 75% / 100% of Use

Enviro-Gen– 25% Hydro / 75% Bio $0.01 per kwh

Issues Associated with GreenUp and Competitive Supply

Compliance with Commission regulations requiring Conversion Transactions

Costs of Billing and Implementation for Niagara Mohawk, GreenUp Suppliers, and ESCos

Compliance Issue Conversion Transaction Requires

Commodity Supplier to Provide Green Energy

GreenUp Designed when Niagara Mohawk Is the Supplier

After the Customer Moves to ESCo, the ESCo Performs the Conversion Transaction

Several Options Option 1—The ESCo Provides the Green

Energy Directly Option 2—The ESCo Contracts with a

GreenUp Supplier to Enhance Standard Offering

Option 3—Niagara Mohawk Extends GreenUp Program and Menu to Participating ESCos

Option 4—GreenUp Is Unbundled from Commodity Supply and Unaffected by Customer Transfer to ESCo

Option 1 – Direct ESCo Supply Always Available ESCo Purchases Green Energy

Directly Reports Sales and Generation to

Commission Issues Compliant Disclosure Label

Option 2—ESCo/GreenUp Supplier Partnership Always Available ESCo and GreenUp Supplier Partner to

Provide Enhanced Service Reporting and Compliance as in

Niagara Mohawk/GreenUp Supplier Arrangement ESCo performs the Conversion

Transaction Reports to the Commission

Option 3—ESCo Authorized to Provide GreenUp Menu

New Option Niagara Mohawk Would Allow All ESCos to Use

GreenUp Name and Marketing ESCos Would Provide GreenUp on the Same Terms as

Niagara Mohawk Requires Contracts Between ESCos and GreenUp

Suppliers GreenUp Suppliers Charges Would Be Bundled with

ESCo Charges Niagara Mohawk Buys Entire Receivable Without

Recourse Can Remit to Bank that Would Allocate Payments Not Available for Two-Bills and Partial Usage

Option 4—GreenUp as an Unbundled Product New Option Favored by GreenUp Suppliers GreenUp Would Be Shown as a Separate Product in

the Commodity Section of the Bill Menu Would Be Available to All Customers, Whether

Served by Niagara Mohawk or ESCo Niagara Mohawk Reports GreenUp by LSE to GreenUp

Supplier ESCo Performs GreenUp Conversion Transaction for

Its Customers Niagara Mohawk Pays GreenUp Supplier Directly, as

Today Niagara Mohawk Is Prepared to Implement this

Approach

Issues Identified at GreenUp Meeting

Willingness of ESCos to Participate in Option 4 Potential for a Green Switch Program Supported by

ESCos Including GreenUp Options in Power Switch Program Including GreenUp Options in SC-3 Aggregation Joint Marketing Issues for Power Switch and Green

Options Consistent messages Sharing of Marketing Resources

– Bill Inserts– Other Marketing