“Transforming at the Speed of Value” Steven Hauser Vice President, GridPoint

1. Smart Grid Progress “Transforming at the Speed of Value” Steven Hauser Vice President, GridPoint President, The GridWise Alliance August 4, 2008

2. GridPoint Mission Making the Smart Grid a reality by aligning the interests of electric utilities, consumers and the environment. Vision Values Integrating every home and business into the Smart Grid. Turning resources at the edge of the grid into valuable operational assets. GridPoint provides a comprehensive platform for greatly enhancing visibility and control for both utilities and consumers of the assets at the edge of the grid. 2

3. The GridWise Alliance 3

5. A Smart Grid is when… … your teenage daughter, who snuck out last night with the PHEV, plugged it in to recharge this morning and pressed “override” on your “smart charger” – paying $1.00 per kWh for daytime electricity. …luckily, your rooftop PV is providing most of the energy to recharge, and the extra battery in your garage is working overtime to provide regulation services to the utility at a premium rate…resulting in an overall net zero cost to you. A grid is smart when… ...the grid provides value to the local utility …the grid provides value to the consumer …the grid provides value to the local economy …the grid provides value to the environment 5

6. The Grand Challenges… Transfer all traditional capacity reserve requirements to the demand side Increase overall asset utilization by at least 10% Ensure that all critical loads are served 100% of the time Integrate clean energy technologies to reduce CO2 intensity by at least 30% Proactively mine all utility and consumer efficiency improvements Accommodate a penetration of more than 30% PHEVs 6

7. SYSTEM CAPACITY 1,067,019 MW 15 % RERSERVE MARGIN 1,277,072 MW AVERAGE SYSTEM CAPACITY 602,585 MW Capacity Challenges

8. Capacity Challenges (cont’d) HOURS 8

9. The promise of wind… “…balancing-energy market prices in ERCOT's four market zones have ranged from negative territory in the west, where wind-generated power is abundant, to the market cap of $2,250 per MWh and even higher during times of transmission congestion.”- Reuters, 5 June 2008 2007 2008 (1st half) Data source: ERCOT 9

10. Power Reliability Boston Globe dailymail.co.uk 10

11. Power Quality Visibility at the endpoint provides distributed intelligence for monitoring and correcting grid power quality. 11

12. Energy Efficiency Services … While on vacation you receive a message that your hot water heater has been running full on since last night. Your “smart energy manager” dispatches a field service technician and discovers a broken water pipe. The utility shuts off your water heater remotely and the technician on site turns off the water, saving you several days of wasted consumption and property damage. 12

13. PHEV Smart Charging Utility managed smart charging of PHEVs with measurement and verification to reduce stress on the grid during peak periods and enable differentiated pricing – regardless of when the car is plugged in 13

14. Building the Smart Grid 21st Century Smart Grid Supply & DemandSelf-Optimization Self-Healing Grid Distribution Automation Grid-InteractiveVehicles Home & Building Automation AdvancedDemand Management Ancillary Services VISIBILITY CONTROL Time DifferentiatedRates REC Markets Customer Portals Demand Response AMI Today Load Curtailment Renewables Integration Outage Management Energy Management Systems AMR OPERATIONAL EFFICIENCY CLEAN TECHNOLOGY CAPACITY POWER QUALITY& RELIABILITY LOAD EFFICIENCY FOUNDATION / INFRASTRUCTURE 14

15. GridWeek 2008