Energy East reaffirms its support for a three-region RTO in policy analysis submitted to FERC

ALBANY, N.Y., and PORTLAND, Maine, April 11, 2002 — Energy East Corp. has reaffirmed its support of a regional transmission organization (RTO) that would include the areas currently served by the PJM Interconnection (PJM), the New York Independent System Operator (NYISO) and ISO-New England in a policy analysis submitted to the Federal Energy Regulatory Commission (FERC).

The policy analysis includes comments from NYSEG (New York State Electric & Gas Corporation) and CMP (Central Maine Power), wholly-owned subsidiaries of Energy East, and Rochester Gas & Electric Corporation (RG&E) in response to the February 26, 2002 “Economic Assessment of RTO Policy” prepared for FERC by ICF Consulting.

“We commend FERC for its considerable effort in quantifying the costs and benefits of implementing its RTO policies,” said Denis Wickham, senior vice president at Energy East. “However, it is clear to us that the benefits of forming a three-region Northeast RTO are greater than those identified in the ICF Study.”

Energy East’s policy analysis cites the following benefits that would be of greater magnitude with a three-region RTO versus a smaller RTO:

* Supplier and customer access to a larger wholesale market which would lead to enhanced competition.
* Complete elimination of seams throughout the expanded region, resulting in reduced transaction costs.
* Substantial savings from a reduction in control area management and operating costs.
* Virtual elimination of emergency energy purchases and installed capacity issues.
* Numerous dispatching, scheduling, loading and other transmission operating efficiencies.
“We do not want to leave efficiency, reliability and cost benefits on the table,” Wickham said. “This is a tremendous opportunity that we cannot afford to let slip away. With the Commission’s leadership, we can make this happen and ensure that there are benefits for all three regions.”

About Energy East: Energy East Corp. is a super-regional energy services and delivery company serving 2 million customers (1.4 million electricity and 600,000 natural gas) in upstate New York and New England over a 32,000-square-mile service area.

On February 20, 2001, Energy East announced a strategic combination with RGS Energy Group, the parent company of Rochester Gas & Electric Corporation. The combined company will be one of the largest, most diversified energy providers in the Northeast, servicing half of upstate New York and nearly 3 million customers, including approximately 1.8 million electricity customers, almost one million natural gas customers and approximately 200,000 other retail energy customers.

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