Peter Barsamian September 13, 2002

1. Serving our Customers Well in a Standard Market Design Peter Barsamian September 13, 2002

2. Agenda • The NSTAR Perspective • SMD customer impacts • People • Process • Technology

3. The NSTAR Perspective • Our mission is to serve our customers well • In Energy Supply matters, we act as the “agent of the customer” • Our Energy Supply goals are to: • Do a good job of buying power • Maintain stable prices • Advocate customer-oriented market rules • Facilitate Supplier Activity

4. As we analyze customer-oriented market characteristics, we know that: • Markets should: • Be efficient • Work as designed • Be free from market power • Be easy to understand • Avoid inequitable regional transfers • Not be susceptible to gaming When we have the chance to plan and design new markets, we need to anticipate the impacts of efficiency being the major driver.

5. Agenda • The NSTAR Perspective • SMD customer impacts • People • Process • Technology

6. From a customer perspective, SMD has both benefits and risks: • Efficiency may be gained • Market power/abuse may be an issue • Regional cost transfers will be created • Implementation will pose challenges at the retail level There is a great risk though of customer confusion and frustration during the transition to SMD.

7. Massachusetts is a recognized leader in successfully implementing a competitive market. • 25% of load is competitively served • Energy prices have reduced • Customer adoption of competitive supply continues to accelerate • Education on competitive markets has been successful • Infrastructure is in place to support currentenvironment. Our success is enhanced over time. Consumers need considerable time to absorb, understand and assimilate energy market changes into their operating models.

8. Communication and education on SMD impacts consumers and utility Customer Service Representatives. People success requires: • Employee training on SMD • Staffing to respond to increased inquiries • Questions on zones • Requests for load profiles • Supplier questions • Billing issues • Consumer zone changes • Ongoing training with further enhancements to SMD

9. Designing support processes will accelerate customer understanding of SMD. Process success requires: • Creation of standard scripts to ensure consistent messages • Creation of multiple access points for information (phone, web, print media, etc.) • Creation of FAQ’s and standard responses • Proactive and ongoing consumer education • Print media • Advertisements • Bill inserts

10. Technology is the key enabler for successful transition to SMD. Technology success requires: • Programming changes to major IT systems including: billing, customer information, load research, GIS, service order and others. • Increase IT data files to capture and store new customer data (zones, nodes) • Thorough system testing to mitigate post implementation issues • IT upgrades to support scripting, FAQ’s, Web and IVR enhancements

11. We need to evaluate and anticipate all real and perceived scenarios Doug’s Widgets $.10/kwh Pete’s Widgets $.06/kwh Zone A Zone B

12. NSTAR is committed to serving our customer well leveraging people, processes and technology. Our current competitive market success demonstrates how adequate time is needed for customers to understand and assimilate energy market changes. Let’s learn from our past experiences as we move forward with our SMD enhancements from a people, process and technology perspective.