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<br />I R{C ~ <br /> <br />November 17, 2006 <br /> <br />Mr1vl0TC1: <br /> <br />CArp Members <br /> <br />FROM: <br /> <br />Bill Starnes and Bob Stemper <br />2005 Savings Report <br /> <br />SUBJECT: <br /> <br />2005 Savings Report <br /> <br />This transmittal contains the Savings Report for calendar year 2005. The Savings Report is <br />based on a comparison of the energy billed by Direct Energy Business Services (DEBS) under <br />the CAPP contract as compared to the estimated Price to Beat (PTB) cost: <br /> <br />Total Savings ($) = [Total Estimated PTB] - [Total DEBS Energy Billings] <br />Total Savings ev.l) = [Total Savings ($)] / [Total Estimated PTB ($)] <br /> <br />In reviewing the billing data from DEBS that serves as the basis of these reports, RJC has <br />identified a significant factor that we believe has had the impact of reducing the estimated <br />savings shown on the report. This factor is described below: <br /> <br />Reduced Billings in Late 2006: Based on the billing data received from DEBS, there appears <br />to be a lack of billings for the lastfew weeks of 2006. Reviewing the metered usage data <br />from the TDSP shows that in some cases, there were a reduced number of meters read after <br />the first or second week of December. This reduces billed volumes for the last few weeks of <br />2005, since these volumes were not recorded and/ or billed until 2006. Thus, billed usage <br />volumes for 2005 may appear lower than expected annual usage based on usage history in <br />previous years. Although RJC cannot identify the specific source of each delayed meter <br />read, we have heard that much of the problem may be due to systems maintenance activities <br />at ERCOT at that time. <br /> <br />Unfortunately, the last two months of 2005 were also the months with the highest Price to <br />Beat Fuel Factor prices, which would thus show the greatest percentage savings. Since these <br />unbilled volumes are not accounted for in the 2005 billing information, the large savings <br />associated with these volumes will also not be reflected in the report. However, these large <br />savings will be accounted for when the savings reports associated with 2006 billings are <br />created in the future. <br /> <br />If you have any further questions or concerns regarding the Savings Report, please call Bob <br />Stemper at (512) 331-4949 x 113 or email tobstemper@licovington.com. <br /> <br />RJ Covillg/oll CO/lSul/ing, LLC <br />11044 Research Boulevard, Sui/e A-325 <br />Alii/in, Texas 78759 <br /> <br />(5 12) 33 1~4i)49 <br />Fax. (512) 331-5743 <br />WWw.R.JCoving/on.com <br /> <br />r' <br />