AMI Meter Deployment Talquin Electric Cooperative, Inc. Talquin Water & Wastewater, Inc.

1. AMI Meter Deployment Talquin Electric Cooperative, Inc. Talquin Water & Wastewater, Inc. October 20, 2011

2. TALQUIN ELECTRIC COOPERATIVE, INC. Slide Title • Serving Approximately 43,444 Members Co-op Wide • 52,110 Active Electric Accounts • 48,382 Residential • 2,501 Commercial • 227 Large Power • Over 4,400 Miles of Energized Line • 11.9 Services Per Mile • 26 Substations • Winter Peaking System • Approx. 300 MW Demand • Content A • Content B 2

3. TALQUIN ELECTRIC COOPERATIVE, INC. Slide Title Serving Leon, Gadsden, Liberty and Wakulla Counties in NW Florida • Content A • Content B 3

4. TALQUIN WATER & WASTEWATER, INC. • 20,420 Active Water Accounts • 19,745 Residential • 664 Commercial • 4,357 Active Wastewater Accounts • 4,198 Residential • 159 Commercial • TWWI owns 18 Community Water Systems through the four county area • 630 miles of pipeline with 1,500 hydrants, 5,000 valves, 14 elevated storage tanks, 30 pressure tanks, and 44 wells providing an average of approximately 6 million gallons per day. • Tanks range in size from 100,000 gallons to 1,000,000 gallons for elevated tanks and 500 to 15,000 gallons for pressure tanks.

5. AMI Issues Unique To Talquin • Member-Read Residential Billing Process • True-Up of Unbilled Revenue Due to Member Read System • Absence of Existing Read Routes to Streamline Deployment Within Billing Cycles • TEC Employees Have Not Visited Accounts Monthly • Gaining Access to Property • Large Service Area & Diversity in Density of Member Accounts – Different Concerns of Members • Water Service • Territorial Agreement with City of Tallahassee

6. Initial Steps Towards AMI • Began Aclara PLC (TWACS) AMR Pilot - May 2007 • Two significant obstacles to overcome • How to read water meters via power line? • How to read electric meters not served by TEC distribution? • Change in management = change in direction • All of 2008 focused on AMI research • Site Visits, Technical Expos, and RFI’s • Must have an adequate and easily maintainable water solution. • Goal was to “future proof” Talquin for the still-developing and ever-changing Smart Grid requirements.

7. Evaluation Process • Evaluated five different AMR/AMI technologies • Aclara, Landis + Gyr, Sensus, Cannon, and Tantulus • Parameters by which all were evaluated, close to 30. • Meter Vendor Variety • Outage and Restoration Notification • Ability to Read Water Meters • Web-based Interface • “Pinging” Capability • Narrowed down to three and released RFP per RUS specifications • Not just lowest bidder, but lowest evaluated bidder. • Sensus FlexNetwas recommended and approved

8. Financial Case for AMI Cost/Benefit Analysis

9. Financial Case for AMI

10. Financial Case for AMI

11. Financial Case for AMI NPV - $12,842,669 IRR – 34% Profitability Index – 3.82 Breakeven Point – 5 yrs

12. Talquin’s AMI Deployment • Ten Tower Gateway Base Station (TGB) Sites In Service to Establish Fixed Wireless “Smart Grid” Canopy • Five on existing microwave towers, four on elevated water tanks, and one on a leased USFS tower • Over 37,000 Residential Meters Deployed to Date • Majority of Residential Exchanges Being Performed by Contractor, CMI Services out of Chipley, FL • Releasing RFP for Polyphase Meter Selection • Integration With GIS Mapping System • Integration With Outage Management System & Prediction Technology • Pilot Project of Sensus iPerlWater Meters in Service & Communicating

13. Member Awareness • Utilize Focus Group Concept to Identify Concerns of Members –Target Those Concerns • Hold Open Houses • Presentations at Community Events • “TEC-Meter” Identifier in Lieu of “Smart Meter” • Annual Meeting Booth • Articles In Talquin’s Monthly Publication to Members • Informational Posters in Area Offices • Created Informational Brochures • Postcards Mailed to Members – Advance Notification Immediately Prior to Deployment in Their Area • Signs Placed at Entrances of Subdivisions • Information Packets Delivered at Time of Exchange

14. IT & Integration Partners • Technical Nature and Required Integration With Other Critical Systems Mandates That IT Be Involved From Conception of AMI Selection & Planning Process • Participation From Vendors of Integrated Systems • Customer Information Systems • GIS Mapping • Outage Management • Highly Recommend a Meter Data Management System Maximize Use of Assets & Data Related to AMI

15. Deployment Tips • Clearly Define Responsibilities & Expectations of Contractor • Clearly Define Departmental Duties & Responsibilities • Test Sampling of Products Before Deployment • Install All Infrastructure In Initial Stages • Document Status of Meters – Photos of Existing & New • Document - Photo Condition of Member’s Electrical Service • Line Up Contractors to Respond to Emergency Repairs • Retain Meters for Minimum of Three Months – Billing Issues • Stage Full Promotion of “Bells & Whistles” With Timing of Functionality – Integration Requires Time • Be Prepared for Health Related Questions – EMF, etc. • Do Not Install Meters With Remote Disconnects on Critical Accounts – Traffic Lights, RR Crossings, MES Accounts, etc.

16. Issues Faced Since Deployment • Isolated Pockets of Meters Failing to Communicate – Very Limited in Scope - Required Installation of Repeater • Inaccessible Meters • Damage in Meter Bases Discovered During Exchange • Remote Disconnect Failures Due to Water Intrusion - Condition of Member’s Electrical Service • Simultaneous Outage Notification Alarms in Dense Areas • Discovery of PV Systems - Mechanical Meter Net Billing • Give Consideration Into Decision to Allow/Not Allow Opt-Out Option (Privacy, Security & Medical Concerns)

17. Actual Image of Map Displaying Meter Icons of Accounts Affected by Device Outage

19. In Conclusion: • Establish your Financial Goals and Targets upfront • Check the progress of the project against your objectives • Leverage fixed investment against inflationary annual costs of the current systems

20. For More Information Please Contact: 850-627-7651 Eugene Kanikovsky, Director of Financial Services eugenek@talquinelelctric.com Jeremy Nelms, Director of Engineering Services jnelms@talquinelectric.com