Budgeting and Tracking Your District’s Volatile

Energy Costs

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Breakout Session Topics• Energy Costs 101

• Natural Gas Cost Components

• Budgeting and Tracking Natural Gas Costs

• Electric Power Cost Components

• Apples to Apples

• Budgeting and Tracking Electric Power Costs

• IEC Program Contacts

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Energy Costs 101

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Energy Costs 101

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Cost = Price

Cost ≠ Price

Cost = (P*Q)T → BUDGET

Natural Gas Cost Components

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Gas 101 - Natural Gas Delivery System

Production Transportation Distribution Consumption

Interstate Pipeline = Basis

Gas Producers = NYMEX

School Facilities

Utility = LDC Distribution Costs

City

Gate

State line

Natural gasexploration& productioncompanies

Interstate gas pipelinesmoving gas to utilities

Local gasutilitiesdelivering gasto end-users

Burning gasfor heat andprocessapplications

Source: NYMEX6

+ Supplier Margin

Tracking and Budgeting Natural

Gas Costs

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EnerPro® – Reports Main Screen

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IEC Managed Program – Budget Forecast

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NICOR Last Updated: 2/20/2011

Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 TotalLP LP LP LP LP LP LP LP LP LP LP LP

Net Usage 2,434 2,792 4,821 15,243 25,214 39,194 43,866 35,323 28,022 13,375 6,912 3,630 220,824Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated

Gross Delivered Therms: 2,492 2,858 4,935 15,605 25,812 40,125 44,908 36,162 28,687 13,693 7,076 3,716 226,068Net Delivered Therms (less utility loss factor) 2,437 2,796 4,827 15,264 25,250 39,250 43,929 35,374 28,062 13,394 6,922 3,635 221,140

Deliveries:IEC SPOT POOL GAS for usage 2,492 2,858 4,935 15,605 20,770 32,286 36,135 29,097 23,083 13,693 7,076 3,716 191,745Estimated NYMEX price per therm $0.4037 $0.4095 $0.4125 $0.4135 $0.4180 $0.4376 $0.4616 $0.4748 $0.4738 $0.4538 $0.4568 $0.4603 $0.4488

1,006$ 1,170$ $2,036 $6,452 $8,682 $14,128 $16,680 $13,815 $10,937 $6,214 $3,232 $1,710-$ -$ -$ -$ -$ -$ -$ -$

IEC Option A Gas Hedged as of today 0 0 0 0 5,043 7,839 8,773 7,065 5,604 0 0 0 34,324WACOG NYMEX price per therm $0.0000 $0.0000 $0.0000 $0.0000 $0.5868 $0.5868 $0.5868 $0.5868 $0.5868 $0.0000 $0.0000 $0.0000 $0.5868

Estimated Basis Volume 2,434 2,792 4,821 15,243 25,214 39,194 43,866 35,323 28,022 13,375 6,912 3,630 220,824Estimated Basis Volume Price per therm 0.0223$ 0.0223$ 0.0223$ 0.0223$ 0.0327$ 0.0327$ 0.0327$ 0.0327$ 0.0327$ 0.0197$ 0.0197$ 0.0197$ $0.0308

Commodity & Utility Consumption Charge

Commodity Charge * $1,062 $1,234 $2,146 $6,800 $11,839 $19,189 $22,554 $18,639 $14,758 $6,483 $3,372 $1,784 $109,860 Wgt Avg Cost / Therm $0.4361 $0.4421 $0.4451 $0.4462 $0.4695 $0.4896 $0.5142 $0.5277 $0.5267 $0.4847 $0.4878 $0.4914 $0.4975

EST Utility Distribution Charges 158$ 173$ 257$ 621$ 969$ 1,457$ 1,620$ 1,322$ 1,067$ 556$ 331$ 208$ $8,740$0.0651 $0.0620 $0.0532 $0.0408 $0.0384 $0.0372 $0.0369 $0.0374 $0.0381 $0.0416 $0.0478 $0.0572 $0.0396

IEC Per Account Member Fee $20 $20 $20 $20 $20 $20 $20 $20 $20 $20 $20 $20 $2401

Est. "Shared Savings" Storage Discount $0 $0 $0 $0 ($260) ($404) ($452) ($364) ($289) $0 $0 $0 ($1,767)

$1,255 $1,444 $2,451 $7,533 $12,720 $20,498 $24,006 $19,830 $15,725 $7,140 $3,764 $2,033 $118,398

$0.5154 $0.5172 $0.5085 $0.4942 $0.5045 $0.5230 $0.5473 $0.5614 $0.5612 $0.5338 $0.5445 $0.5601 $0.5362

* IEC Consumption Charge includes NICOR utility loss factor.

Spot Market Price 0.4037$ 0.4095$ 0.4125$ 0.4135$ 0.4180$ 0.4376$ 0.4616$ 0.4748$ 0.4738$ 0.4538$ 0.4568$ 0.4603$ Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Disclaimer: The preceding information is based upon market price estimates, estimated usage, and therefore, cannot be construed as a formal offer or as a guaranteed delivered price.

OPTION A "IEC MANAGED PROGRAM" with Storage Release Shared Savings ProgramBUDGET FORECAST for July 2011 through June 2012

TOTAL NATURAL GAS COSTS

Bradley Bourbonnais Community High School District #307

“IEC Spot Pool Price Program” Budget Forecast

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NICOR Last Updated: 2/20/2011

Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 TotalLP LP LP LP LP LP LP LP LP LP LP LP

Net Usage 2,434 2,792 4,821 15,243 25,214 39,194 43,866 35,323 28,022 13,375 6,912 3,630 220,824Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated Estimated

Gross Delivered Therms: 2,492 2,858 4,935 15,605 25,812 40,125 44,908 36,162 28,687 13,693 7,076 3,716 226,068Net Delivered Therms (less utility loss factor) 2,437 2,796 4,827 15,264 25,250 39,250 43,929 35,374 28,062 13,394 6,922 3,635 221,140

Deliveries:IEC SPOT POOL GAS for usage 2,492 2,858 4,935 15,605 25,812 40,125 44,908 36,162 28,687 13,693 7,076 3,716 226,068Estimated NYMEX price per therm $0.4095 $0.4125 $0.4135 $0.4180 $0.4376 $0.4616 $0.4748 $0.4738 $0.4678 $0.4538 $0.4568 $0.4603 $0.4583

Estimated Basis Volume 2,434 2,792 4,821 15,243 25,214 39,194 43,866 35,323 28,022 13,375 6,912 3,630 220,824Estimated Basis Volume Price per therm 0.0223$ 0.0223$ 0.0223$ 0.0223$ 0.0327$ 0.0327$ 0.0327$ 0.0327$ 0.0327$ 0.0197$ 0.0197$ 0.0197$ $0.0308

Commodity & Utility Consumption Charge

Commodity Charge * $1,076 $1,243 $2,151 $6,871 $12,140 $19,834 $22,791 $18,316 $14,358 $6,483 $3,372 $1,784 $110,417 Wgt Avg Cost / Therm $0.4421 $0.4451 $0.4462 $0.4508 $0.4815 $0.5060 $0.5196 $0.5185 $0.5124 $0.4847 $0.4878 $0.4914 $0.5000

EST Utility Distribution Charges 158$ 173$ 257$ 621$ 969$ 1,457$ 1,620$ 1,322$ 1,067$ 556$ 331$ 208$ $8,740$0.0651 $0.0620 $0.0532 $0.0408 $0.0384 $0.0372 $0.0369 $0.0374 $0.0381 $0.0416 $0.0478 $0.0572 $0.0396

IEC Per Account Member Fee $20 $20 $20 $20 $20 $20 $20 $20 $20 $20 $20 $20 $2401

Est. "Shared Savings" Storage Discount $0 $0 $0 $0 ($336) ($522) ($584) ($470) ($373) $0 $0 $0 ($2,284)

$1,269 $1,453 $2,456 $7,604 $12,945 $21,025 $24,110 $19,400 $15,240 $7,140 $3,764 $2,033 $118,438

$0.5214 $0.5203 $0.5095 $0.4988 $0.5134 $0.5364 $0.5496 $0.5492 $0.5439 $0.5338 $0.5445 $0.5601 $0.5363

* IEC Consumption Charge includes NICOR utility loss factor.

Spot Market Price 0.4095$ 0.4125$ 0.4135$ 0.4180$ 0.4376$ 0.4616$ 0.4748$ 0.4738$ 0.4678$ 0.4538$ 0.4568$ 0.4603$ Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Disclaimer: The preceding information is based upon market price estimates, estimated usage, and therefore, cannot be construed as a formal offer or as a guaranteed delivered price.

"OPTION C" IEC Spot Pool Program with Storage Release Shared Savings ProgramBUDGET FORECAST for July 2011 through June 2012

TOTAL NATURAL GAS COSTS

Bradley Bourbonnais Community High School District #307

Electric Power

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Pricing Components

• Energy Price• Capacity• Ancillaries and RTO costs• Transmission Costs and Losses• Distribution Losses• Renewable Portfolio Standards• Administrative Fees• Delivery Service Charges

Know What You’re Buying and How to Tell an Apple from a Lemon

Other Supplier IEC

Energy 4.789¢/kwh 3.974¢/kwh

Capacity Pass Thru 0.896¢/kwh

Distribution Losses Pass Thru 0.242¢/kwh

Transmission & Ancillaries 0.596¢/kwh 0.596¢/kwh

RPS Pass Thru included

Other RTO Charges Pass Thru 0.225¢/kwh

How Much will you pay? 5.385 + ??? 5.933¢/kwh

No matter who you purchase from, demand they show you transparency in the pricing. If they won’t –

Show them the door.

Sample Budget Projection

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IEC Natural Gas Program Day-to Day Contacts

Before you become a Member:Glen Grimm – New Business Development

Office: 630-264-6600Cell: 630-205-6454E-mail: glen.grimm@constellation.comFax: 630-264-6611

After you become a Member:Liz Peronto – Account ManagerOffice: 888-579-6600E-mail: liz.peronto@constellation.com Fax: 262-506-6611

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IEC Electric Program Contacts

Membership Questions (Prospective and Current)

Tonya Powell – Electric Program Administrator

Office: 314-613-9120

E-mail: tpowell2@ameren.com

Fax: 888-354-9837

Billing Questions:

Glenda Ehrlich & Meghan Scally

AEM Customer Care Team

Office: 888-451-3911 opt 3

E-mail: AEMCustomerCare@ameren.com

Fax: 888-354-9837

Pricing Components Descriptions

• Energy – The Wholesale Energy cost secured by the IEC through block purchases

• Capacity – Charges dictated by MISO or PJM to ensure reliability

• Ancillaries and RTO costs – includes imbalance fees, Market administration fees, etc…

• Transmission – rate charged to transport energy from generator to service point

• Distribution Losses – cost of the percentage of energy that is “Lost” while traveling from Point A to B.

Pricing Components Descriptions (cont’d)

• Renewable Portfolio Standards – Cost to suppliers to ensure required percentage of energy derives from approved Renewable resources

• Administrative Fees – Because the IEC is a non-profit organization, Administrative fees are charged to cover the cost of administering the Program (marketing, communications, Program Administration, etc…)

• Delivery Service Charges – fees charged by the local utility to use their poles, wires, metering services, etc.