DISRUPTING THE STATUS QUO

1. DISRUPTING THE STATUS QUO DIGITALIZATION OF THE RENEWABLE ENERGY CREDIT SUPPLY CHAIN

2. OUTLINE Background NAESB - Today Distributed Ledger Technology Solution REC DLT Standards Setting Process Challenges

3. CADE BURKS FOUNDER AND CHIEF DIGITAL OFFICER BIG DATA ENERGY SERVICES A Digital Asset Management company processing over 100 million usagereads per day and over 25 million business transactions a month in the energy space. Vice Chair of North American Energy Standards Board (NAESB)

4. The North American Energy Standards Board (NAESB), originally the Gas Industry Standards Board (GISB), serves as an industry forum for the development and promotion of standards which will lead to a seamless marketplace for wholesale and retail natural gas and electricity, as recognized by its customers, business community, participants, and regulatory entities. • GISB est. 1994 / NAESB est. 2001 • Strong relationship with the Federal Energy Regulatory Commission (FERC), National Association of Regulatory Utility Commissioners (NARUC), Department of Energy (DoE), North American Electric Reliability Corporation (NERC), Department of Commerce (DoC), National Institute of Standards and Technology (NIST), National Petroleum Council (NPC) and various state regulators. ORIGIN AND SCOPE: NAESB - TODAY

5. Wholesale Electric Market Standards: ~2,000 • Wholesale Gas Market Standards: ~600 • Retail Market Standards: ~1,700 • Other Products • The Electric Industry Registry • e-Tag Functional Specification • Common Coding System for Interstate Pipelines ORIGIN AND SCOPE: NAESB - TODAY

6. North American Energy Standards Board 2018 – NAESB 101 Webinar Organization by Quadrant and Segment:

7. Certificate of Incorporation • Bylaws • Quadrant Procedures • NAESB Operating Practices • Board Motions and Resolutions • Various Memoranda of Understanding CORPORATE STRUCTURE & GOVERNANCE DOCUMENTATION:

8. North American Energy Standards Board 2018 – NAESB 101 Webinar • American National Standards Institute (ANSI), established in 1918, is the primary organization for fostering the development of technology standards in the United States. • The process followed is ANSI accredited -- ANSI accredits organizations as Standards Development Organizations (“SDO”) based on their adherence to ANSI’s cardinal principles of standards-setting. • The process is open and any interested party can participate and contribute to the standards development regardless of membership in NAESB. • Non-member Meeting Participation Fee STANDARDS DEVELOPMENT PROCESS:

9. Department of Energy • Surety Assessments • Data Privacy Standards - DataGuard Department of Defense • Defense Logistics Agency Department of Interior • Bureau of Land Management National Institute of Standards and Technology • Smart Grid Standards White House Office of Science and Technology Policy • Green Button Standards National Petroleum Council • Gas-Electric Coordination General Services Administration OTHER EXAMPLES OF COORDINATION:

10. Data Base Data Base Data Base Data Base Data Base Data Base Data Base Data Base Application Application Application Application Consumer D Business Logic Business Logic Business Logic Business Logic Current peer-to-peer technology Over 30 different REC Markets. Exchanges are different for every market Generator A Each REC has a unique identifier and can only be owned by one entity Broker B Utility D

11. Node D Node A Node C Node B Smart Contract Smart Contract Smart Contract Smart Contract Distributed Ledger Technology (DLT) Ledger C Ledger B Ledger D Ledger A Generator A Consumer D Utility C Broker B Blocks written to Distribute Ledger Node A Node C Node D Node A Node B Node C Node B Node D Node A Node B

12. How Distributed Ledger works A Distributed Ledger (also called a Shared Ledger, or Distributed Ledger Technology, DLT) is a consensus of replicated, shared, and synchronized digital data spread across multiple sites, countries, or institutions. It can be a Public or Private DLT. All received REC data must be verified by the entities transacting the REC. Each data point is issued a synchronized “Hash #” creating an unique data file that is difficult to change.

13. How do I pick the “right” DTL platform Deciding in the correct DLT is not about picking winners and losers like choosing between Betamax and VHS. Think of DLT being like sharing a common database across the REC Supply Chain without having to agree on common software.

14. Smart Contracts represent digital protocols that execute predefined processes without the need for a third party verification. • Smart Contracts are a collection of if/then statements, that greatly reduce the time to execute transactions, eliminating technical errors, and cost. Smart Contracts

15. Smart Contract use case DLT and specifically smart contracts allow users to write sophisticated transactions thus creating invoices that pay themselves through notification of transfer or any pre-set condition is received. Smart contacts can store meta data on generation/project locations, NA Renewable Registry, Attestation and Retirement times and changes to contracts specification. Utilities and End-Use Consumers can complete and reconcile as transactions take place reducing the time of verification and eliminating redundancies

16. Smart Contracts put the pieces together

17. Identify Scope of Work, including REC Markets • Identify and document standard data sets • Identify and document process flows • Develop Smart Contracts • Develop Proof of Concept from REC Generation to Retirement • Define what Success Looks like when rolled out NAESB Standards Setting Approach

18. Lack of understanding by industry - Lots of education required • Market by Market differences and competing solutions • Regulatory knowledge, understanding, and monitoring CHALLENGES