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October 17, 2011 Quarterly Report to the PA PUC, PY3 Ql1.1Summary of Portfolio ImpactsA summary of the portfolio reported impacts is presented in Table 1-2.Table 1-2: EDC Reported Portfolio Impacts through the End of the Reporting PeriodTotal EnergyImpact TypeSavings(MWh)Total DemandReduction (MW)0.797Reported Gross Impact: Incremental QuarterlyReported Gross Impact: Program Yearto Date12,73012,730Reported Gross Impact: Cumulative Portfolio Inception to DateUnverified Ex Post 62.622Estimated Impact: PYTD Total CommittedPreliminary PYTD Verified ImpactPreliminary PYTD Net Impact31Verified Savings: Cumulative Portfolio Inception to Date20.797NOTES:12Verification has not begun fcr.PY3QiV a l u e s provided are as of PY2 Q2.Table 1-3 below is a placeholder for summarizing the total resource summary benefits and costs.Table 1-3: Verified Preliminary Portfolio Total Evaluation Adjusted Impacts through the End of theReporting PeriodTRC CategoryTRC Benefits ( )TRC Costs ( )TRC Benefit-Cost RatioIQN/AN/APYTDN/AN/ACPITDN/AN/AN/ANOTES:Per direction from the SWE on 9/13/2010, no TRC values are provided for this report.DLC Page 5

October 17, 20111 Quarterly Report to the PA PUC, PY3 Ql1.2Summary of Energy Impacts by ProgramA summary of the reported energy savings by program is presented in Figure 1-1.Figure 1-1: CPITD Reported Gross Energy Savings by Program through the End of the Reporting PeriodCPITD Gross Energy Savings by Program50,00040,00035,000x5 25,000DLC Page 6

October 17, 20111 Quarterly Report to the PA PUC, PY3 QlA summary of energy impacts by program through the current quarter of Program Year 3 is presented inTable 1-4 and Table 1-5.Table 1-4: EDC Reported Participation and Gross Energy Savings by Program through the End of theReporting Period22Reported Gross TDResidential: EE Program (REEP): Rebate ntial: EE Program (Upstream 07903,698Residential: Appliance RecyclingResidential: Low Income EEResidential: Low Income EE (Upstream mmercial Sector Umbrella EEHealthcare EE131318632322,110110199Industrial Sector Umbrella EE004199001,229603Chemical Products EEM i x e d Industrial EE01839008714,9986,986Office Building - Large - EE120113Residential: School Energy PledgeOffice B u i l d i n g - S m a l l EEPrimary Metals EEPublic A g e n c y / Non-ProfitRetail S t o r e s - S m a l l EERetail S t o r e s - L a r g e EETOTAL 14262612,73012,7302,853186,836The CPITD savings values were updated to include four Program Year 2 projects that had previously not beencounted in the Program Year 2 preliminary report, as well as a savings correction made to an existing projectincluded in that report. However, the CPITD values shown do not include final adjustments yet to be made toProgram Year 2 savings (e.g., for the Refrigerator Recycling program).DLC Page 7

October 17, 2011 [ Quarterly Report to the PA PUC, PY3 QlTable 1-5: EDC Reported Gross Energy Savings by Program through the End of the Reporting PeriodUnverifiedEx PostProgramSavings(MWh)Residential: EE Program (includes upstream lighting)Projects inProgress(MWh)1Residential; School Energy PledgeResidential: Appliance RecyclingResidential: Low Income EE (includes upstream lighting)Commercial Sector Umbrella EE1161Healthcare EEIndustrial Sector Umbrella EE264Chemical Products EEMixed Industrial EE3,056Office B u i l d i n g - Large - EEOffice Building-Small EEPrimary Metals EEPublic Agency / Non-ProfitRetail Stores - S m a l l EERetail Stores - Large EETOTAL PORTFOLIO0PYTDEE&C PlanTotalEstimate forPercent ofEstimateCommittedProgram 765162,20848%11%7,11012%NOTES:'Upstream lighting is separated into the REEP and low-income segments.DLC Page 8

October 17, 2011 Quarterly Report to the PA PUC, PY3 QlA summary of evaluation verified energy impacts by program is presented in Table 1-6.Table 1-6: Verified Energy Savings by Program through the End of the Reporting PeriodProgramResidential: EE Program (REEP): Rebate ProgramResidential: EE Program (Upstream Lighting)Residential: School Energy PledgeResidential: Appliance RecyclingResidential: Low Income EEResidential: Low Income EE (Upstream Lighting)Commercial Sector Umbrella EEHealthcare EEIndustrial Sector Umbrella EEChemical Products EEPYTD ReportedPreliminaryPreliminaryNet-to-Gross ImpactRealizationPYTD VerifiedGross(MWh)RateImpact ( M W h )2,627--8,406079023103219900M i x e d Industrial EE87Office B u i l d i n g - L a r g e - EE330Office B u i l d i n g - S m a l l EEPrimary Metals EEPublic Agency / Non-ProfitRetail S t o r e s - S m a l l EERetail S t o r e s - L a r g e EETOTAL PORTFOLIONOTES:1Verification has not begun f o r PY3Q101521472612,7301- N/AN/AN/AN/APYTD NetImpact(MWh)1- -N/ADLC Page 9

October 17, 2011 Quarterly Report to the PA PUC, PY3 Ql1.3Summary of Demand Impacts by ProgramA summary of the reported demand reduction by program is presented in Figure 1-2.Figure 1-2: Reported Demand Reduction by Program through the End of the Reporting PeriodCPITD Gross Demand Reduction by 5%1.003%0.50 - -4%-5%"2%—m—il—H—1%i%J0.00 -i%J?DLC Page 10

October 17, 20111 Quarterly Report to the PA PUC, PY3 QlA summary of demand reduction impacts by program through the current quarter of Program Year 3 ispresented in Table 1-7 and Table 1-8.Table 1-7: Participation and Reported Gross Demand Reduction by Program through the End of theReporting Period23Reported Gross Impact(MW)ParticipantsProgramResidential: EE Program (REEP): Rebate ProgramResidential: EE Program (Upstream 64,394CPITDResidential: School Energy PledgeResidential: Appliance RecyclingN/A0540Residential: Low Income EEResidential: Low Income EE (Upstream Lighting)546N/A0540546N/ACommercial Sector Umbrella EE1313860.0060.0060.514Healthcare EEIndustrial Sector Umbrella EEChemical Products .455M i x e d Industrial EEOffice Building - Large - EE011166Office B u i l d i n g - S m a l l EEPrimary Metals EE20200.0100.000Public Agency / Non-ProfitRetail S t o r e s - S m a l l 93Retail S t o r e s - L a r g e EETOTAL PORTFOLIO23The CPITD savings values were updated to include four Program Year 2 projects that had previously not beencounted in the Program Year 2 preliminary report, as well as a savings correction made to an existing projectincluded in that report. However, the CPITD values shown do not include final adjustments yet to be made toProgram Year 2 savings (e.g., for the Refrigerator Recycling program).DLC Page 11

October 17, 2011 Quarterly Report to the PA PUC, PY3 QlTable 1-8: Reported Gross Demand Reduction by Program through the End of the Reporting PeriodProgramUnverifiedProjects inPYTD TotalEx PostprogressCommittedSavings (MW)(MWh)(MW)EE&C PlanPercent o fEstimate forEstimateProgram 0.83112%0.0163.5010%0.0341.1503%Healthcare EE0.0272.4451%Industrial Sector Umbrella EEChemical Products EE0.O3O0.0000.0300.3890.9620%3%Mixed Industrial EE0.3660.3790.85844%0.0004.4000%Residential: EE Program (includes upstream.lighting)1Residential: School Energy PledgeResidential: Appliance RecyclingResidential: Low Income EE (includes upstream lighting)10.029Commercial Sector Umbrella EEOffice B u i l d i n g - L a r g e - E EOffice Building-Small EE0.0560.0661.9403%Primary Metals EE0.1030.1032.6474%Public Agency / 0.1941.88110%1.0281.82546.2424%Retail Stores-Small EERetail Stores-Large EETOTAL PORTFOLIO0.000NOTES:1Upstream lighting is separated intothe REEP and low-income segments.DLC Page 12

October 17, 2011 Quarterly Report to the PA PUC, PY3 QlA summary of evaluation adjusted demand impacts by program is presented in Table 1-9.Table 1-9: Verified Demand Reduction by Program through the End of the Reporting ionPYTD V e r i f i e d(MW)RateImpact ( M W )R e s i d e n t i a l : EE Program.(REEP): Rebate Program0.171R e s i d e n t i a l : EE Program (Upstream Lighting)0.385R e s i d e n t i a l : S c h o o l Energy P l e d g e0.000R e s i d e n t i a l : A p p l i a n c e Recycling0.098R e s i d e n t i a l : Low Income EE0.026R e s i d e n t i a l : Low Income EE (Upstream Lighting)0.000C o m m e r c i a l Sector U m b r e l l a EE0.006Healthcare EE0.027Industrial Sector U m b r e l l a EEC h e m i c a l Products EE0.000M i x e d Industrial EE0.013O f f i c e B u i l d i n g - Large - EE0.000Office B u i l d i n g - S m a l l EEPrimary M e t a l s EE0.010-PublicAgency/Non-Profit0.046Retail S t o r e s - S m a l l . E E0.022Retail S t o r e s - L a r g e EETOTAL PORTFOLIO0.0030.797 -PVTDProgramGross0.0000.000 Net-to Gross1RatioPYTD N e N/AN/AN/AN/AN/A10.000DLC f Page 13

October 17, 20111 Quarterly Report to the PA PUC, PY3 Ql1.4Summary of EvaluationRealization rates are calculated to adjust reported savings based on statistically significant verifiedsavings measured by independent evaluators. The realization rate is defined as the percentage ofreported savings that is achieved, as determined through the independent evaluation review. Arealization rate of 1 or 100% indicates no difference between the reported and achieved savings.Realization rates are determined by certain attributes relative to one of three protocol types. Fullydeemed TRM measure realization rates are driven by differences in the number of installed measures.Partially deemed TRM measure realization rates are driven by (1) differences in the number ofinstalled measures and (2) differences in the variables. Custom measure realization rates are driven bydifferences in the energy savings as estimated at time of installation and savings as determined by themeasurement and verification process.24Quarterly reports may not include realization rates reflecting full program-to-date activities due toongoing M&V activity. The realization rates for the full program year will be reported in the ProgramYear 3 final report.1.4.1 Impact Evaluation1.4.1.1 Evaluation Groups25Per the utility's EM&V Plan , for the purpose of conducting cost-effective EM&V, certain industrial andcommercial programs are grouped based on shared characteristics. Commercial sector retail, healthcare, large and small office and public agency partnership programs are similar enough in structure to betreated as one evaluation group . All industrial programs function in a similar enough manner that theyare treated as one evaluation group. Because of their unique program features, each residentialprogram is evaluated independently. This program level EM&V organization results in seven distinctEvaluation Groups , as shown in Table 1-10 below. Note that program theory and logic models havebeen developed for all of the program groups except for the Upstream Lighting Program.2627282A25262728TRM measures with stipulated values and variables.Evaluation Measurement and Verification Plan, 2010-2012 Energy Efficiency & Conservation Programs, July 15,2010 {EM&V Plan), sections 1.2.6 Program Level EM&V Organization, page 12.Note that in cases where the programs must be consolidated for practical M&V purposes, the sample data canbe used to provide an unbiased estimate of the average savings per project for the program group. Whileaverage savings per project can be broken out for each program in the group, the precision will be lower due tothe smaller sample sizes.EM&V Plan Table 1-7: Evaluation Groups, page 13.A common model has been developed for the commercial and industrial program groups.DLC Page 14

October 17, 2011 Quarterly Report to the PA PUC, PY3 QlTable 1-10: Evaluation GroupsEvaluation GroupsIncluded Sub ProgramsResidential: Appliance Recycling Program (RARP)Single program groupResidential: Low Income Energy EfficiencyProgram (LIEEPP)Residential :Energy Efficiency Rebate Program(REEP)Residential: School Energy Pledge Program (SEP)Single program groupSingle program groupUpstream Lighting ProgramSingle program groupCommercialIndustrialSingle program groupUmbrella, Small Office, Large Office, HealthCare and Retail, Public AgencyPartnerships/EducationUmbrella, Primary Metals, ChemicalProducts and Mixed IndustrialsIn this section, for the residential, commercial and industrial programs, we describe the sample designsand methods used to produce ex post estimates of energy and demand impacts.ResidentialBelow, we describe the approach used to produce ex post estimates of gross savings for the fourresidential programs.Estimation ApproachFor deemed measures, the total ex ante gross kWh (or kW) impact for a given PMRS record is defined asthe claimed units installed multiplied by the unit energy savings (UES). With the Verification approachfor deemed measures, there are two sub-levels of rigor, basic and enhanced. The level of rigor dependson the size of the savings. The basic level of rigor will be used for measures for which the rebate is lessthan 2,000. The enhanced level of rigor is reserved for measures for which the rebate is equal to orgreater than 2,000. Basic level of rigor involves verification by telephone survey, and enhanced level ofrigor involves on-site verification.The basic level of verification rigor methods for TRM deemed measures involves two basic steps:1. Survey a random sample of participants to verify installations and estimate verification rates.2. The claimed ex ante gross kWh and kW impacts for each PMRS record in the population fromwhich the sample was drawn are then multiplied by this verification rate.The verification used for TRM deemed measures consists of a six-step process:Step 1. The verification checklist for deemed savings measures includes data downloaded from PMRSand/or taken from hardcopy documentation for each participant installation or can be obtained bytelephone or on-site visit. The verification checklist for deemed savings measures includes:1. Participant has valid utility account number2.Measure(s) is on approved list and all parameters necessary for calculating savings are present.DLC Page 15

October 17, 2011 Quarterly Report to the PA PUC, PY3 Ql3.Proof of purchase identifies qualifying measure and is dated within the period being verified.4.Rebate payment date is in the current program period being verified.5.Unit kWh and kW are correct for each listed measure.6.Measure was actually installed at the customer site (telephone survey for basic level of rigor).Step 2. A simple random sample of participants is selected from the PMRS database.Step 3. Relevant documentation for items #1 through #5 from PMRS or other hardcopy documentationis then obtained for each sampled PMRS record.Step 4. Next, with respect to the sixth criterion: (a) for basic verification, telephone interviews areconducted with each sampled customer to confirm that they participated in the program, received therebate, and purchased and installed the efficient measure(s); and (b) for the enhanced rigor sample, onsite inspections and interviews are completed with each sampled customer to confirm that theyparticipated in the program, received the rebate, and purchased and installed the efficient measure(s).Step 5. Using the data collected from program files and surveys, a verification rate (VR) is calculated. TheVR is a function of three separate parameters:1. sample-based program-qualifier rate (PQ),2.a clerical adjustment rate (CAR), and3.an installation rate (IR).The PQ is a function of whether the first four criteria were all met. If a sampled participant record didnot meet all four criteria, the PQ would be set to zero. If a sampled participant record met all fourcriteria, the PQ would be set to one.Per the fifth criterion, for each sampled case, the unit kWh and kW for each PMRS measure arereviewed to make sure that they are consistent with agreed-upon deemed values. A CAR, which issimply the ratio of verified deemed values to PMRS deemed values, is then calculated. Note in theoriginal EM&V plan, the CAR was referred to as the realization rate (RR). MCR Performance Solutionschoose to use CAR rather than RR since the level of EM&V rigor associated with the CAR is far less thanthat typically associated with a realization rate.Per the sixth criterion, telephone interviews are conducted to verify that the measure was in factinstalled. The results of the telephone interviews are used to calculate the installation rate (IR), which isthe ratio of the telephone-verified installations to the PMRS installations.For each sampled record, the verification rate (VR) is then calculated as: PQ x CAR x IR. The VR is theratio of ex post verified savings to the ex ante savings. Expectations regarding this ratio form the basis ofthe sample design.Finally, across all sampled records, two weighted average VRs are calculated. One average VR isweighted by total gross ex ante kWh impacts for each record. The second VR is weighted by the totalgross ex ante kW impacts for each record. For a given sampled PMRS record, the total ex ante gross kWhand kW impacts are simply the unit energy savings (UES) multiplied by the units installed.DLC Page 16

October 17, 2011 Quarterly Report to the PA PUC, PY3 QlStep 6. The final step involves multiplying the total gross ex ante kWh and kW impacts for each record inthe PMRS population from which the sample was drawn by the kWh-weighted average VR and the kWweighted average VR, respectively.1.4.1.2Sample Design: LIEEP, REEP, RARP and SEPAll residential programs use the simple ratio estimator. The reasons for moving to a simple ratioestimator were that the vast majority of the measures installed in these four residential programs areexpected to be TRM deemed. This means that the savings are subjected to the basic level of rigor thatinvolved only the verification of installations. The only changes to the estimated gross savings in PMRSwould

Duquesne Light Gary A. Jack Assistant General Counsel 411 Seventh Avenue 16'h Floor Pittsburgh, PA 15219 October 17, 2011 Tel 412-393-1541 Fax 412-393-1418 gjack@duqlight.coin VIA OVERNIGHT MAIL Rosemary A. Chiavetta, Secretary Pennsylvania Public Utility Commission Commonwealth Keystone Building, 2nd Floor 400 North Street Harrisburg, PA