Chris Hickman President, Energy Services chickman@sitecontrols 512-636-1382

1. “… focused on the part of the energy web that can be built out now, for profit, with near-term ROI and a growth path that could eventually produce macro-level network effects.” Chris Hickman President, Energy Services chickman@sitecontrols.com 512-636-1382 1

2. Overview • Founded in 2003 • Headquarters: Austin, TX • Deployed in 2,000 client sites (US, Canada, Europe) • Intelligent Load Management (ILM) program controls 220MW of Peak load with 135MW dispatchable load • Customers: Big Lots, Michaels, The Cheesecake Factory, FedEx Kinko’s, Ethan Allen, Chipotle, LA Fitness • Market Participation: Bi-lateral agreements , Utility Specific ‘Market’ programs for aggregators, Efficiency Programs. • Pilot Programs: Capital Efficiency through ILM, Renewable Balancing, Premium Power, Feeder Balancing. Site Controls creates value in energy by providing web-based enterprise-wide energy management, business intelligence, and grid efficiency solutions to retail and energy management businesses worldwide.

3. Global Benefits • Grid Efficiency • Energy efficiency • Load aggregation and control with no/low consequence • Individual controls for HVAC, lighting, refrigeration, etc. • Energy and Capacity • Fully Automated • “Always On” resource (24x7x365) – No DR Fatigue • Power plant equivalent resource (with no line losses) • Reduced need for peaking capacity • Environmental Stewardship and Sustainability • Measurable carbon reductions • Coincident peak load reductions • Reduced greenhouse gas emissions • Reduced energy consumption

4. EnergyWeb1 The integration of the utility electrical system, telecommunications system, and the energy market to optimize loads on the electrical network, reduce costs to consumers and utilities, facilitate the integration of renewable resources, increase electrical system reliability and reduce environmental impacts of load growth. 1 POWER SYSTEM Providers CLIENT Consumers Generation Residential • Connects all suppliers & users • Two-way, seamless network • Real-time management & optimization • Generation • Transmission & Distribution • Consumption (Device-by-Device) • Match supply & demand • Significantly reduce Carbon emissions Transmission Commercial Distribution Utility/ISO Industrial 1 Reference: Bonneville Power Administration Federal research initiative. www.bpa.gov/Energy/N/tech/energyweb/

5. The Energy Dilemma “you can’t get there from here” Demand Response Implications Transmission & Distribution Gap Projected Infrastructure Implications Amount Amount Amount U.S. & Canadian Infrastructure $$$ Required from 2003 and 2030 (1) U.S. Demand Response Market (Annual) (3) Increase in U.S. Electricity T&D Required from 1999 – 2009 (2) $1.6 trillion 20% $4.2 billion U.S. & Canadian Capacity Required from 2003 and 2030 (1) Increase in U.S. Electricity T&D Scheduled from 1999 – 2009 (2) U.S. & Canadian Capacity required to serve < 80 hours per year (4) 758,000 MW 5% 10% Generation Gap Amount Increase in U.S. Generation Required during the next 10 years (1) 19% Increase in U.S. Generation Scheduled for the next 10 years (1) 6% Sources: (1) International Energy Agency, (2) Pacific Northwest National Lab, (3) Electric Power Research Institute, (4) The Center for Smart Energy

6. What conversation are we having? “Please don’t fix the communication problems, our country couldn’t survive the unemployment problem.” • DR - What is it to you? • A panic button • Only available 4 times a year • Resource that exhibits fatigue with each additional call • Not worthy unless over 5 MW • Wholesale or Retail resource • M&V? Imagined? Somewhere in-between • Only if I have the button? • It’s too complex to manage in mass • Customers ? Oh yes, them, I forgot. • “They” won’t play • Everyone or no one! If you build it They will come

7. Efficiency Savings

8. Low (or NO) consequence DR

9. 2,000 Sites on Network

10. Helping the Grid & Market 5% DR = Real Grid Solution

11. ERCOT Power Emergency • 21% load reduction • 3.5 hours • no material negative consequences

12. Disaggregated Data

13. Evolution of ILM

14. Don’t lose sight of the big picture All DR is good! However, all DR is not the same nor should it be created, valued or utilized in the same fashion. There is not a silver bullet to solve the problems that our energy based economy faces today. We must recognize a blended approach is the answer, not focusing on only one thing. However, we must also recognize the reality of the timing in which these solutions can be delivered. • DR (Short-term: Months) • EE (Short-term: Months) • AMI (Mid-term: 1 to 15 years) • T&D Assets (Short, Mid and Long-term: Months to 15 years) • Generation (Mid and Long-Term: 3-20 years)

15. What conversation should we have? • Consistency • How many different programs do we really need? (Don’t let this turn into the next rate structure.) • Lower the barriers to entry • Metering • Requirements by size (0-50kW, 50-500kW, >500kW) • Requirements by use (Spinning reserve, capacity, energy) • Short-term ability to participate (Wait 5 years while I do AMI?) • Programmatic Paperwork - “National Certification”? • Pay for Performance – Like Accounting rules, you have to demonstrate continued performance to be recognized as a dependable resource. Let proof be in delivery, not paperwork. • ISO/LSE conflict resolution • Timing • We won’t have this opportunity to structure the market again • What do you want? Quit assuming it can’t be done!

16. Thank youChris Hickmanchickman@sitecontrols.com512-636-1382