Economic Impact of Baltimore Gas and Electric Company

Economic Impact of Baltimore Gas and Electric Company Prepared for: An Exelon Company 110 W Fayette Street Baltimore, Maryland 21201 bge.com

110 W Fayette Street, Baltimore, MD 21201 bge.com

Contents Introduction Key Terms and Concepts Study Area 1: Study Area 2: Counties Within the Baltimore Metropolitan Statistical Area Study Area 3: State of Maryland Key Findings: Service Area Impacts Summary Table: Service Area and State of Maryland Impacts General Operations Economic Impacts State of Maryland Greater Baltimore Metropolitan Statistical Area Energy Management Programs Economic Impacts State of Maryland Greater Baltimore Metropolitan Statistical Area Charitable Giving Program Economic Impacts State of Maryland Greater Baltimore Metropolitan Statistical Area Technical Notes Previous Study 2 3 4 5 6 7 8 9 9 11 11 13 13 16 16 18 18 19 20 21 22 1 110 W Fayette Street, Baltimore, MD 21201 bge.com

Introduction Baltimore Gas and Electric Company (BGE) serves electricity and natural gas customers across an economically and geographically diverse 2,300-square-mile area in Central Maryland. Residents of Baltimore City and all or part of ten Central Maryland counties receive utility service from BGE. BGE engaged the Economic Alliance of Greater Baltimore (EAGB) to estimate the economic contributions of BGE in 2015, accounting for both its direct economic contributions, as well as the indirect and induced economic activity in which additional impacts were supported by the company s demand for goods and services and BGE employee expenditures in the economy. EAGB utilized the IMPLAN model to estimate the aggregate economic impacts of the following study areas: (total geography of each county with service) Counties Within the Baltimore Metropolitan Statistical Area The State of Maryland BGE directly provided data used to construct the model. Information provided by BGE is recorded on auditable documents reported to utility regulators. The economic contributions of three distinct BGE activities were measured to estimate the full economic impact associated with the utility provider: General Operations: all activities, including capital investment and operations and maintenance expenses, associated with BGE s energy supply, electric and natural gas transmission and distribution, customer care, and corporate and administrative services Energy Management Programs: activities related to administering BGE s customer energy management programs, providing incentives for both residential and commercial customers energy efficiency projects, steps taken to improve demand side management, offering energy audits and other technical support, as well as customer bill savings directly resulting from energy efficiency and demand side management measures Charitable Giving Program: activities related to BGE s community investment programs, which consist of contributions to charitable organizations located within the study areas This report summarizes the results of the economic impact analysis for each of the three BGE activities. The discussions of economic impacts throughout this report are separated by activity and by geographic study area. Figure 1 details the number of workers employed by BGE based on location of residence. Figure 1 BGE Employees by Location of Residence Jurisdiction us Maryland Source: BGE Total Employees 3,048 2,817 2,773 2 110 W Fayette Street, Baltimore, MD 21201 bge.com I -~-.. I '

Key Terms and Concepts There are three key effects that together make up the aggregate economic impact of BGE employment, all of which are covered by this report. They include: Direct Effect: Economic activities directly associated with BGE s general operations, customer energy management programs, and charitable giving program. For BGE s general operations, the direct impact consists of the market value of goods and services provided by BGE, measured by revenue. Direct effects also include the BGE workforce and the associated wages of full- and parttime workers. Indirect Effect: Second-order economic activities of industries that respond to BGE demand generated by the direct economic activities. These industries supply goods and services to BGE. For BGE s general operations, the indirect impact includes the company s capital investments and operations and maintenance expenditures. Examples of industries that experience indirect impact of BGE activities include construction, engineering, and legal services. Induced Effect: Refers to the economic activities generated by spending from workers supported by the direct and indirect effects of BGE activities. As full- and part-time workers employed by BGE or a BGE-supported industry use their income on typical household consumption, they create additional economic activity. Workers that use their income to purchase retail, housing, banking, and food services support the employment and wages of workers in those industries. The sum of direct, indirect, and induced effects represents the total gross economic impact. The direct, indirect, and induced effects can be measured in several different ways. The following economic factors are used in this report and, as distinct measures, should not be combined to estimate total economic impact: Employment: the number of jobs supported Labor Income: the dollars paid as wages and benefits to workers, as well as proprietor s income Output: the market value of goods produced or services provided, frequently reflected as total revenue or sales in businesses Tax Generation: the state and local taxes and fees generated, including sales, property, income, and several other tax and fee categories This analysis was conducted based on BGE s commuter shed, or where BGE employees reside, because the location of residence determines wage expenditures on local industries. Because of this distinction, the induced impacts that the 231 BGE employees residing outside the state of Maryland have on their communities are not included in this report. Note that BGE generates additional induced impacts on the states of Pennsylvania, Delaware, and Virginia; states immediately bordering the commuter shed. 110 W Fayette Street, Baltimore, MD 21201 bge.com 3

Study Area 1: Figure 2 -...111w GMTHIIISIIUIIG N w E Electric Service Boundary - Natural Gas Service Boundary Currently Served by Both - Natural Gas Service Only Source: BGE 5,136,453 2,773 Source: IMPLAN, BGE The contains all Maryland counties that receive gas or electric service from BGE. This also includes the total population of all counties within the service area. 4 110 W Fayette Street, Baltimore, MD 21201 bge.com

Study Area 2: Counties Within the Greater Baltimore Metropolitan Area Figure 3 Greater Baltimore Metropolitan Statistical Area --~ p } i.,_ ~ / I CAAROlL BAlTIM f NT --~-ri I CECIL! / I 1 i i j I i i i \ 1 i j 1 l i A! 1 i i CAROLINE,,.--" - -- --...... 1... CALVERT OIARLES -----'---- Source: EAGB,, County Population BGE Employees Baltimore MSA 2,797,407 2,708 Anne Arundel 564,195 404 Baltimore 831,128 1,080 Carroll 167,627 239 Harford 250,290 482 Howard 313,414 127 Queen Anne's 48,904 24 Baltimore Ci 621,849 352 Source: IMPLAN, BGE 110 W Fayette Street, Baltimore, MD 21201 bge.com 5

Study Area 3: State of Maryland Figure 4 State of Maryland Source: EAGB State Population BGE Employees Ma~land 6 006 401 2 817i Source: IMPLAN, BGE 6 110 W Fayette Street, Baltimore, MD 21201 bge.com I -~-.. I '

Key Findings: Service Area Impacts General Operations BGE provides customers with reliable electric and gas utility service across the Central Maryland region. The company is one of the 25 largest private employers in the state. The total annual economic contributions resulting from BGE's 2015 general operations in its Service Area amounted to approximately 9,580 jobs, $922.60 million of labor income, and $5.01 billion of output. S5.13 billion BGE's total output impact on the Service Area of $5.01 billion can be compared to the direct output of the legal services industry at $5.04 billion and the retail food and beverage industry at $4.05 billion. Insurance agencies brokerages, and related activities Legal Services BGE Total Output Impact Employment Services BGE's general operations supported approximately 1.48% Retail of Food and of the Service Area's total economic output of $338.32 Beverage billion. Source: IMPLAN 2015 Energy Management Programs $5.04 billion $5.01 billion $4.40 billion $4.05 billion BGE offers residential and commercial customers the opportunity to reduce energy consumption and monthly expenditures on energy use through a wide variety of energy management programs. These energy management programs are supported by customers and EmPOWER Maryland legislation, and are facilitated by BGE. BGE generated an energy management savings for its customers of $92.44 million in the Service Area to support operations and consumer investment in energy management measures. The total impacts of BGE's dedication to customer energy management in the Service Area equates to 792 jobs, $47.76 million in labor income, and $227.04 million in output. For every dollar of savings that BGE passed on to customers through energy management programs within the Service Area, $2.46 of output was generated in the Service Area economy. Charitable Giving Program Through BGE's shareholder-funded charitable giving program, the company supports education, environmental stewardship, community development, and arts and culture programs. In addition to assistance to maintain existing programs and launch new programs, these funds support the internal operations of the recipient organizations, which generates economic benefit. $4.50 million of donations from BGE's charitable giving program to recipient organizations within the Service Area supported $1.93 million in labor income and $8.09 million of output. BGE employees elect to volunteer their time outside the office to support community improvement. BGE employee volunteer hours help to sustain and create important programs and organizations to fill key community needs. In 2015, BGE employees provided 23,000 volunteer hours to local causes. 110 W Fayette Street, Baltimore, MD 21201 bge.com 7

Summary Table: Service Area and State of Maryland BGE Total Economic Impacts, 2015 Study Area & Impact General Operations Energy Management Charitable Giving Programs Program Employment 9,580 792 Labor Income $922,601,414 $47,763,231 $1,929,029 Ou ut $5 014 074 113 $227,039,620 $8 087 486 Maryland Employment 10,211 795 Labor Income $954,669,103 $47,866,823 $1,933,295 Ou ut $5,216,130,162 $227,483,235 $8,142,539 Source: IMPLAN 2015 Coefficients based on EAGB analysis of BGE Data 8 110 W Fayette Street, Baltimore, MD 21201 bge.com

General Operations Economic Impacts The primary role and first responsibility of BGE is the transmission and distribution of electricity and natural gas to residents and businesses located in Central Maryland. BGE s general operations activities include those related to the company s electric and natural gas transmission and distribution, customer care, and corporate and administrative services. In 2015, general operations activities generated approximately $3.14 billion of revenue, which supported 2,773 direct employees in the and paid compensation to those employees totaling over $421.84 million. The economic activity created by BGE s demand for goods and services from local suppliers and BGE employees demand for household goods is multiplied throughout the BGE 2015 General Operations Total Service Area Economic Impacts Employment: 9,580 Labor Income: $922.60 million Output: $5.01 billion State & Local Taxes: $419.88 million regional economy. As shown in Figure 5, the total economic contributions resulting from BGE s 2015 general operations within the company s Service Area totaled approximately 9,580 jobs, $922.60 million of labor income, and $5.01 billion of output. Approximately $419.88 million of direct, indirect, and induced state and local taxes were generated within the. $422 million wages to employees jj~j11irej31j $583 million* payment for household goods and services $263 million wages ll~jlltb1:(1] $583 million* payment for household goods and services $1.07 billion payment for goods and services payment for goods and services *Induced impact is the total resulting from spending of both direct and indirect employees. 110 W Fayette Street, Baltimore, MD 21201 bge.com 9

General Operations Economic Impacts The economic impacts of BGE on its Service Area reflect fairly robust multipliers that show an increase of 2.45 jobs for every direct job supported by BGE s general operations and an additional 60 cents of output for every dollar of revenue directly generated by the company. BGE s economic impacts were distributed through nearly every industry in the service area, with Food Service, Real Estate Establishments, and Hospitals seeing the largest employment benefit. Construction, Wholesale Trade Businesses, and Real Estate Establishments saw the largest impact in output. The affected industries are influenced by the fact that BGE is a utility company with considerable operating expenses, capital investment, and labor income that circulates through the Service Area economy. BGE 2015 General Operations Direct and Total service Area output $3,135 Direct Output (Millions) Multiplier= 1.60 $5,014 Total Output (Millions) BGE is highly regarded among its customers for reliability and rapid service, which has steadily increased since 2008 to an alltime high in 2014. BGE saw its second best year for reliability and fast service in 2015. In 2015, BGE placed in the first quartile in reliability measures, indicating that BGE customers experience power outages less often than customers of peer utilities around the country. The frequency of power outages was the lowest on record in 2015. Reliability of power and a rapid response to outages are important, and have significant effects on the residential and commercial customers within the. However, the impact of BGE s commitment to reliability is not included in this study. It is best represented by the absence of lost revenue among its commercial customers and is therefore considered a direct effect of the companies that rely on BGE to maintain operations. It is important to consider that businesses and homeowners located in BGE s Service Area benefit economically and create new impacts due to BGE reliability and rapid response to outages such that BGE s influence on the regional economy is greater than what is outlined in this report. Figure 5 BGE General Operations Economic Impact, 2015 Study Area & Impact Direct Indirect Induced Total Employment Labor Income OutQut Maryland Employment Labor Income 2,773 $460,885,108 2,864 $262,966,579 $3,135,000,000 $1,295,811,877 2,817 3,313 $470,483,005 $280,234,663 3,943 $198,749,727 9,580 $922,601,414 $583,262,082 $5,014,074,113 4,081 10,211 $203,951,436 $954,669,103 Output $3,135,000,000 $1,427,962,204 $601,042,646 $5,216,130,162 Source: IMPLAN 2015 Coefficients based on EAGB analysis of BGE Data Note that `Labor Income` includes both employee compensation and proprietor income; also described in the Key Terms and Concepts. 10 110 W Fayette Street, Baltimore, MD 21201 bge.com

General Operations Economic Impacts State of Maryland and Greater Baltimore Metropolitan Area As the effects of BGE s general operations are followed through the State of Maryland, the company s economic impacts grow. Analyzing the whole of the state allows the model to include employees that reside outside of the service area, increasing the net impacts of BGE general operation activities. Additionally, a portion of what is considered leakage wages and spending that result from BGE outlays to firms located outside the study area is captured. At the statewide level, the economic impacts of BGE s general operations grow to support 10,211 total jobs, $954.67 million in labor income, and $5.22 billion of output. BGE generated an estimated $431.34 million in state and local taxes in 2015 alone through direct, indirect, and induced impacts of its general operations activities. Each job that BGE s general operations supported directly created 2.62 additional jobs in the Maryland economy, and each dollar of revenue that BGE generated led to an additional 66 cents of output in the state. Economic contributions to counties within the Baltimore MSA varied based on the level of BGE employment and activity within each county, as well as the size and structure of the local economy. BGE supported the greatest number of jobs and output in Baltimore County due to more of its employees residing within those municipalities and greater levels of spending in the area. The economic impacts of BGE on each of the counties within the Baltimore MSA are shown in Figure 6 on the following page. 110 W Fayette Street, Baltimore, MD 21201 bge.com 11

General Operations Economic Impact Greater Baltimore Metropolitan Statistical Area Figure 6 BGE General Operations Economic Impact, 2015 Study Area & Impact Direct Indirect Induced Total Anne Arundel County Employment 404 523 522 1,449 Labor Income $61,960,990 $45,131,784 $23,701,947 $130,794,721 Output $498,617,379 $274,760,147 $72,181,597 $845,559,123 Baltimore County Employment 1,080 469 1,021 2,570 Labor Income $169,992,840 $24,104,915 $45,901,649 $239,999,405 Output $798,440,672 $67,915,075 $132,657,392 $999,013,139 Carroll County Employment 239 32 165 436 Labor Income $36,358,364 $899,646 $5,946,364 $43,204,373 Output $3,218,284 $19,359,017 $22,577,301 Harford County Employment 482 27 313 822 Labor Income $73,325,238 $1,322,806 $11,662,155 $86,310,199 Output $3,266,613 $39,116,110 $42,382,724 Howard County Employment 127 198 152 477 Labor Income $22,014,685 $16,904,637 $7,710,653 $46,629,975 Output $340,273,976 $49,781,896 $24,094,127 $414,149,998 Queen Anne's County Employment 24 14 38 Labor Income $3,651,049 $419,935 $4,070,985 Output $867,915 $4,518,964 Baltimore City Employment 352 317 262 931 Labor Income $62,615,963 $40,289,129 $1 4,941,407 $117,846,499 Output $700,558,822 $177,810,065 $40,756,744 $919,125,631 Source: IMPLAN 2015 Coefficients based on EAGB analysis of BGE Data. No direct output was generated within Harford and Queen Anne s County as the counties do not have any BGE employment facilities in the area. Carroll County also generated no direct output as IMPLAN does not contain BGE s select industry profiles for that geography; however all direct effects for Carroll County were captured through spending and employment. Queen Anne s County had no indirect effects as it falls outside of the BGE service area, and therefore no direct spending occurred in that geography. 12 110 W Fayette Street, Baltimore, MD 21201 bge.com

Energy Management Programs Economic Impacts BGE offers a range of energy management incentive programs aimed at helping residential, commercial, and industrial customers reduce energy consumption and demand. These programs include demand-side management programs like PeakRewards SM targeted at reducing customer demand during peak hours, and energy efficiency programs that aid in customer investment in fixtures and appliances that use less energy. In 2015 alone, residential and commercial BGE customers saved a net total of $92.44 million through reduced energy consumption and incentive, rebate, and bill credit programs offered by the company. BGE administers energy management programs and is authorized by the BGE 2015 Energy Management Total Service Area Economic Impacts Employment: 792 Labor Income: $47.76 million Output: $227.04 million State & Local Taxes: $7.05 million Maryland Public Service Commission to charge a surcharge to cover the costs of rebates aimed at reducing consumption in support of the State's EmPOWER initiative. Energy cost savings realized through implementing energy efficiency measures reduce operating costs and increase industry output for commercial customers, and make available additional disposable income for residential customers that can be used for regular household consumption activities; and Residences and commercial and industrial customers that elect to take advantage of BGE s energy management programs spur additional economic activity themselves through the purchase of equipment upgrades, hiring contracting services, and various other expenditures to industries that produce goods and services that sell products associated with energy consumption; and Reduced energy consumption is beneficial to the regional environment by reducing greenhouse gas emissions and energy demand. BGE 2015 Energy Management Customer Saving and Total Service Area Output $227.04 $92.44 Every dollar of savings generates S2.46 of new output Customer Savings Total Output (Millions) (Millions) The direct economic activities resulting from BGE s customer energy management programs begin a new round of ripple effects in the regional and state economies through indirect and induced activities. 110 W Fayette Street, Baltimore, MD 21201 bge.com 13

Energy Management Programs Economic Impacts BGE offers customers a variety of ways to save money, energy, and benefit the environment that fall under the BGE Smart Energy Savers Program umbrella, including, but not limited to, the following: The PeakRewards SM program, which requires customers to install a smart thermostat or air conditioning device, cycles participants air conditioners during periods of high demand in order to reduce the likelihood of power outages and provides bill credits to customers participating in the program. BGE customers saved $23.68 million in 2015 alone through its PeakRewards program. The BGE Smart Energy Rewards program awards bill credits to customers who cycle their usage during periods of high energy use during the summer and requires only that customers have a smart meter installed. Rebates on high-efficiency heating and cooling equipment and services. Retrocommissioning, or adjusting and troubleshooting, electrical, mechanical, and control systems in existing commercial and industrial buildings to optimize energy performance. Nearly 438,000 PeakRewards systems are installed in the service area, and more than 72,000 customers chose to participate in other BGE s customer energy management programs in 2015. BGE continues to install smart meters, which has allowed the company to reduce operations and maintenance expenditures and pass savings along to its customers in the form of rates lower than what they otherwise would be in the absence of such programs on monthly utility bills. This analysis accounts for BGE s role as the administrator of energy management programs that rely on a partnership between customers, BGE, and EmPOWER Maryland and the direct, indirect, and induced effects of the company s Energy Management activities. For example, it does not take into account the economic impact of an industrial customer that takes advantage of a BGE energy efficiency program and hires a third-party contractor to install new equipment to do so. However, it is important to know that this separate, distinct wave of economic impact exists, and that BGE and utility customers can be considered prime movers in its inception. An additional caveat exists when estimating the economic impact of savings of commercial customers caused by introducing energy management measures. Each commercial and industrial customer operating within the BGE Service area may, and likely will, utilize these cost savings differently: one organization may pass its savings on to employees through increased compensation, another may dedicate savings to an expanded marketing budget, while a third may make a capital purchase with its savings. While each organization has benefitted from BGE s demand side management and energy efficiency programs, the impact of each on the local economy is quite different. 14 110 W Fayette Street, Baltimore, MD 21201 bge.com

Energy Management Programs Economic Impacts The total economic impacts of BGE s Energy Management activities shown in Figure 7 include estimates for employment, labor income, and output that recognize a significant variance in the way commercial customers elect to use the funds saved through BGE s programs that promote demand side management and energy efficiency. A large portion of the economic impact results from the induced effects, as households have greater expendable income as the result of the savings and wages passed down by employers. BGE s Energy Management activities, which include program administration, labor costs, and customer savings as a result of avoided energy use produce a significant economic multiplier when compared to the labor input. The activities of 24 employees within BGE contribute to 792 additional jobs in the service area. For every dollar of savings that BGE passed on to customers through energy management programs, $2.46 of output was generated in the Service Area economy. Providers of household goods and services see the greatest benefit of BGE s Energy Management activities by far: the annual increase in household income that these programs represent has led to significant expenditures in the food service, health care, and retail industries. Despite only staffing 26 people to facilitate the entire company s Energy Management activities, an estimated 24 of whom live in the and in the State of Maryland, BGE supports approximately $47.76 million in labor income. BGE s Energy Management activities also generated approximately $6.61 million in state and local tax revenue. A majority of the impacts of energy savings is realized in the form of induced effects. This is result accounting for the monetary savings from energy programs as an increase in net income of households and proprietors within the service area. However, some of the savings that were passed on to commercial customers is spent on business related functions that manifest in the indirect impacts seen below. Figure 7 BGE Energy Management Programs Economic Impact, 2015 Study Area & Impact Direct Indirect Induced Total Employment 24 Labor Income $3,797,861 Output $94,504,749 Maryland Employment 24 Labor Income $3,797,861 302 466 $20,214,816 $23,750,554 $62,589,295 $69,945,576 304 467 $20,266,273 $23,802,689 Output $94,504,749 $62,823,721 $70,154,765 Source: IMPLAN 2015 Coefficients based on EAGB analysis of BGE Data 792 $47,763,231 $227,039,620 795 $47,866,823 $227,483,235 I -~-.. I ' 110 W Fayette Street, Baltimore, MD 21201 bge.com 15

Energy Management Programs Economic Impacts State of Maryland and Greater Baltimore Metropolitan Statistical Area Expanding the study area to the State of Maryland shows an increased economic impact generated by BGE s Energy Management activities. Although there is no direct energy savings generated by the areas of Maryland that fall outside of the service area, the expanded geography captures more of the indirect and induced spending from the service area, and thus reduces leakage. Throughout the State of Maryland, BGE s demand side management and energy efficiency programs supports approximately $227.48 million of direct, indirect and induced output. Additionally, it generates $47.87 million in wages and 795 jobs. Figure 8 on the following page shows the economic impact of BGE s Energy Management on each of the counties within the Baltimore MSA that are served by BGE. Note that the total impact of the counties does not equal the total impact of the MSA, as the larger geography is able to capture the leakages of supplier relationships across county lines. 16 110 W Fayette Street, Baltimore, MD 21201 bge.com

Energy Management Programs Economic Impacts Greater Baltimore Metropolitan Statistical Area Figure 8 BGE Energy Management Programs Economic Impact, 2015 Study Area & Impact Direct Indirect Induced Total Anne Arundel County Employment 4 39 89 135 Labor Income $7,552,182 Out ut $13,214,906 $8,393,520 $12,640,561 $34,862,971 Baltimore County Employment 9 93 115 219 Labor Income $12,038,376 Output $27,612,767 $17,384,357 $15,617,499 $60,939,340 Carroll County Employment 2 8 20 30 Labor Income $1,414,002 Out ut $3,715,748 $1,272,789 $2,336,133 $7,418,547i Harford County Employment 4 24 38 65 Labor Income $3,331,401 Out ut $8,664,663 $4,949,245 $4,742,227 $18,492,877i Howard County Employment 1 26 59 87i Labor Income $5,486,354 Output $12,872,478 $6,784,206 $9,838,920 $29,323,699 Baltimore City Employment 3 76 56 134 Labor Income $9,822,823 Output $17,984,471 $16,345,236 $9,637,195 $43,235,005 Source: IMPLAN 2015 Coefficients based on EAGB analysis of BGE Data In order to protect employee privacy, employment and labor income are reported in total impacts only. Queen Anne s County is not included as it does not fall within the service area and is not the county of residence of any Energy Management employees. 110 W Fayette Street, Baltimore, MD 21201 bge.com 17

Charitable Giving Program Economic Impacts BGE supports the community in which its employees live and work through contributions to a variety of philanthropic causes, including education, the environment, community development, and arts and culture. In 2015, through its charitable giving programs, BGE BGE 2015 Charitable Giving provided $4.50 million to nonprofits in its Service Area to Total Service Area Economic Impacts advance efforts in improving education, the environment, Labor Income: $1.93 million community development, and arts and culture. Output: $8.09 million State & Local Taxes: $266,863 Funding provided by BGE s charitable giving helped to create and sustain valuable programs and services in the community provided by nonprofits, educational institutions, and local government entities as well as contributing to the regional economy through the jobs and spending associated with the funded organizations themselves. For the purposes of this analysis, it is assumed that all of BGE s charitable giving resembled that of the Grantmaking, Giving, and Social Advocacy industry. The funds allocated by BGE provided varying levels of support for internal programs and operations across an array of recipient organizations, which generated economic effects within the and the State of Maryland. The direct impacts shown in Figure 10 include the workers that BGE employees to manage its Charitable Giving activities. A majority BGE 2015 Charitable Giving Total Giving and Total service Area output $4.50 Total Giving (Millions) Every dollar of giving generates $1.80 of new output $8.09 Total Output (Millions) of the economic impacts of BGE s charitable giving are associated with their activities included within Grantmaking, Giving, and Social Advocacy. 18 110 W Fayette Street, Baltimore, MD 21201 bge.com

Charitable Giving Program Economic Impacts and State of Maryland BGE employees are personally committed to improving the community where they work and where they live through volunteering. In 2015, BGE employees provided 23,000 volunteer hours to local causes. Figure 9 Figure 9 shows how BGE employees volunteer their time, with community development, education, food service, and environmental areas of activism being the most common ways for BGE employees to donate labor. The time that BGE employees donate to myriad causes creates significant positive effects such as improved education outcomes, healthy and thriving communities, support for the arts, and relief efforts VOLUNTEERISM DISTIBUTION. Arts. Community Development Construction.Education. Emergency Response Environment Food Service Relief Efforts The direct, indirect, and induced effects of BGE s charitable giving within the Service Area generated an economic impact totaling more than $1.93 million in labor income, nearly $8.09 million of output, and $266,863 of state and local tax revenue. For every dollar BGE invested in grants, giving, and social advocacy, the Service Area s output expanded by $1.80, derived from the direct, indirect and induced effects. Figure 10 shows the impact of BGE s Charitable Giving Programs on employment, labor income, and output in the and the State of Maryland study areas. Effects of BGE s Charitable Giving Program are expanded when the larger geographic area of the State of Maryland is used. Again because of the capturing additional leakage, and the additional charitable giving, increased impacts can be traced back to BGE in the State of Maryland geographic scope. Figure 10 BGE Charitable Giving Programs Economic Impact, 2015 Study Area & Impact Direct Indirect Induced Total Labor Income $1,929,029 Output $4,495,144 $2,374,750 $1,217,591 $8,087,486 Maryland Labor Income $1,933,295 Output $4,535,920 $2,384,172 $1,222,447 $8,142,539 Source: IMPLAN 2015 Coefficients based on EAGB analysis of BGE Data 110 W Fayette Street, Baltimore, MD 21201 bge.com 19

Charitable Giving Program Economic Impacts Greater Baltimore Metropolitan Statistical Area The impacts of BGE s Charitable Giving activities on individual counties within the Baltimore MSA are shown in Figure 11. Figure 11 BGE Charitable Giving Programs Economic Impact, 2015 Study Area & Impact Direct Indirect Induced Total Anne Arundel County Labor Income $29,895 Output $142,500 $63,423 $16,468 $222,391 Baltimore County Labor Income $570,499 Output $878,180 $376,107 $315,902 $1,570,189 Carroll County Labor Income $6,646 Output $48,500 $17,585 $2,982 $69,067 Harford County Labor Income $238,699 Output $351 878 $128 418 $108 142 $588,438 Howard County Labor Income $22,576 Output $101,200 $46,051 $11,618 $158,869 Queen Anne's County Labor Income $287 Output $2,340 $817 $113 $3,271 Baltimore City Labor Income $513,813 Output $2,621,308 $851,232 $176,926 $3,649,466 Source: IMPLAN 2015 Coefficients based on EAGB analysis of BGE Data In order to protect employee privacy, employment and labor income are reported in total impacts only. Counties that were not estimated to contain Charitable Giving Program employees did not produce any direct output. 20 110 W Fayette Street, Baltimore, MD 21201 bge.com

Technical Notes EAGB utilized the IMPLAN input-output model with the 2015 data set to conduct the economic impact analysis. The model was built to reflect the counties of the, the State of Maryland, and individual counties within the Baltimore MSA, as well as specific BGE activities based on information provided directly by BGE for the year 2015. This analysis accounted for direct spending leakages out of the geographic areas as well as captured indirect and induced effects. EAGB also used the model-derived tax impact analysis to estimate the aggregated state and local fiscal impacts associated with the direct, indirect, and induced economic effects. BGE-provided background data for the impact model are shown in Figure 12 below. Due to rounding, some data contained within figures in this report may not sum to their totals. Figure 12 BGE Background Data Summary Factor Headcount Employment Labor Spending Non-Labor Spending Revenue Energy Management Program Savings: Residential Energy Management Program Savings: Commercial Charitable Giving Source: BGE Total 3,048 $463,821,647 $1,074,853,456 $3,135,000,000 $46,192,986 $46,247,951 $4,535,920 110 W Fayette Street, Baltimore, MD 21201 bge.com 21

Previous Study In 2014, the Economic Alliance of Greater Baltimore conducted a similar economic impact study for BGE to estimate the impact of BGE on the study areas during 2013. An updated methodology was used in calculating the 2015 impact compared to that of the 2013 study. This change in methodology should not be seen as a detractor from the accuracy of either model, as both models had sufficient data to build a complete and accurate model. Several factors contributed to this decision: The Service Area study area was altered to include the totality of each county that fell within the service area in 2015. In the 2013 study, specific ZIP codes were used in an Econometric Regional Purchasing Coefficient model, with an older version of IMPLAN that is no longer supported, to define the Service Area. In addition to the difference in geography, the previous service area model did not support a multi-regional analysis, which increased the amount of leakage that occurred throughout the model. IMPLAN Capability Changes: The 2013 model was produced using the 2012 IMPLAN data package, and was adjusted accordingly to reflect 2013. The current model was built using the IMPLAN 2015 data package. The new data package contained industry profiles that closely reflected BGE activities, which allowed a model to be constructed that utilized this built-in framework. Conversely, the 2013 model utilized custom industry profiles to accurately reflect the activities of BGE. The 2015 study was conducted using the same methodology for both the Service area and the State of Maryland geographies. The 2013 study used separate methodologies for the aforementioned study areas. Due to these adjustments, a direct comparison of the 2013 and 2015 results should not be analyzed. It would be inaccurate to consider any of the net changes between 2013 and 2015 results as a gain or loss in effects of BGE on the selected geographies economies. However, a general comparison of the levels of impact generated in both studies show that both methodologies produced highly comparable results. As point of reference, Figure 13 shows the summary results of the 2013 study. For full results, see Economic Impact of BGE: June 2014. 22 110 W Fayette Street, Baltimore, MD 21201 bge.com

Previous Study 2013 Summary Findings Figure 13 BGE General Operations Economic Impact, 2013 Study Area & Impact Direct Indirect Induced Total Employment 3,035 3,048 2,603 8,686 Labor Income $323,294,648 $173,809,528 $127,232,408 $624,336,584 Output $3,050,000,000 $418,774,834 $342,147,675 $3,810,922,509 Maryland Employment 3,100 3,384 2,669 9,153 Labor Income $330,218,586 $186,814,331 $130,663,644 $647,696,561 Output $3,050,000,000 $454,722,629 $351,273,601 $3,855,996,230 BGE Energy Management Programs Economic Impact, 2013 Study Area & Impact Direct Indirect Induced Total Employment 21 195 548 764 Labor Income $2,167,490 $10,960,832 $27,002,654 $40,130,976 Output $110,299,107 $25,855,414 $72,956,298 $209,110,819 Maryland Employment 21 215 561 798 Labor Income $2,167,490 $12,681,125 $28,387,276 $43,235,891 Output $110,299,107 $30,048,137 $75,726,216 $216,073,460 BGE Charitable Giving Economic Impact, 2013 Study Area & Impact Direct Indirect Induced Total Labor Income $1,170,308 Output $3,586,407 $1,247,067 $641,744 $5,475,218 Maryland Labor Income $1,339,257 Output $3,409,089 $1,617,909 $731,686 $5,758,684 Source: EAGB analysis of BGE Data 110 W Fayette Street, Baltimore, MD 21201 bge.com 23

Notes 24 110 W Fayette Street, Baltimore, MD 21201 bge.com

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Prepared for: Prepared by: An Exelon Company Economic Alliance of Greater Baltimore 110 W Fayette Street 1 East Pratt Street, Suite 200 Baltimore, MD 21201 Baltimore, MD 21202 bge.com www.greaterbaltimore.org 110 W Fayette Street, Baltimore, MD 21201 bge.com