Offering Overview Smart metering and beyond 28 January, 2011

1. Doug Scheller, Global Smart Metering and Beyond Solution Leader Cheryl Linder, Global GBS Offering Leader Offering OverviewSmart metering and beyond28 January, 2011 GBP03036-USEN-00

2. Agenda • E&U Value Chain • Smart metering & beyond Components • SM&B Point-of-View (POV) Highlights • SM&B Experience • SM&B Tools, Accelerators and Assets

3. Traditional electricity value chain End-usecustomers Electricdevices andappliances Energyservice(retail) Power generation and trading Powertransmission Powerdistribution Emerging electricity value chain Distributed resources (generation, storage, electric vehicles) End-usecustomers Electricdevices andappliances Energyservice(retail) Power generation and trading Powertransmission Powerdistribution Information and services platform owner Information services Information devicesand appliances Power flow Information flow Value Chain An information value chain has emerged where meters are the gateway and infrastructure for enabling deeper customer engagement While the traditional value chain stopped at the meter to the premises, the new value chain will integrate devices beyond the meter and the actions of customers themselves.

4. Traditional industry value model: Emerging industry value model: Value to customers (continuous) Value to customers (continuous) • Power • Reliability • Universal service • Environmental impact reduction • Cost saving • Personalization • Information • Services • Revenue • Information • Services • Environmental impact reduction • Revenue • Power • Reliability • Universal service • Revenue Reciprocal value from customers (intermittent) Third- party product/ service providers • Information • Personalization • Services • Cost savings • Environmental impact reduction • Revenue • Information • Connections/ personal networks • Power • Demand response Reciprocal value from customers (intermittent) Value Chain In the expanded value chain, the customer has more to offer power providers and other participants than just payment for energy At the same time, customers are becoming more demanding; they actually have much more to offer in reciprocal value to energy and other product/service providers.

5. Value Chain Mapping out strategies now to take advantage of the new value chain are required “table stakes” Who invested in broadband infrastructure? Who benefited most from it? Lesson from telecom: those who build major infrastructure aren’t a lock to be the ones that will profit most from its presence

6. Agenda • E&U Value Chain • Smart metering & beyond Components • SM&B Point-of-View (POV) Highlights • SM&B Experience • SM&B Tools, Accelerators and Assets

7. Smart metering and beyond solution offering components IBM’s Energy and Utility Solution Portfolio addresses a utility’s business and technology needs across the full energy value chain END USERS DELIVERY OPTIONS POWER GENERATION OPTIMIZATION (PGO) CORPORATE SUPPORT SERVICES TRANSMISSION & DISTRIBUTION OPERATIONS CUSTOMER OPERATIONS TRANSFORMATION (COT) Customer Care Customer Management Customer Systems • Mobile Workforce Mgmt • Asset Lifecycle Mgmt • Supply Chain Mgmt Plant Operations Fleet Optimization Supply Expansion Human Resources Accounting Payroll INTELLIGENT UTILITY NETWORK (IUN) IUN Communications Networks IUN Security Smart Metering & Beyond Grid Operations Emerging Areas PHYSICAL AND CYBER SECURITY SOLUTION ARCHITECTURE FOR ENERGY & UTILITIES FRAMEWORK (SAFE) INFRASTRUCTURE Servers, storage, communications network and equipment and associated services

8. Smart metering and beyond solution offering components The Smart metering and beyond offering includes:

9. Smart metering and beyond solution offering components IBM Smart metering and beyond cross brand capabilities WHAT SHOULD I DO ? HELP ME DO IT MANAGE ITFOR ME Pilots and First-of-a-Kind Projects RESEARCH BUSINESS CONSULTING Smart Metering Planning Systems Integrator Application Management TECHNOLOGY CONSULTING Technical Services Provider Smart Metering Technology Planning Hosting and Service Management SOFTWARE AND HARDWARE Joint SolutionDevelopment Software and Hardware Solutions

10. Smart metering and beyond solution offering components Smart metering and beyond Research offering components Solution Driven Strategy Joint research and pilots • Committees and standards • Smart grid enablement • Real-world aware systems-of-systems architectures • Modeling, analytics, and optimization • Renewable and EV integration, optimization • Demand response • Interoperability frameworks and messaging • Cyber-physical system security • Social computing • Compute and storage clouds, HPC • Intelligent buildings and green data centers • Photovoltaics (PV) • Battery storage for EV • Chip and server systems power management • Regional Demonstrations • National Labs • Universities • Industry / client partners, technology consortia • Smart grids, Batteries, Plug-In Vehicles • First of a kind projects • DOE GridWise Architecture Council • NIST SG Working Groups • ISO, IEC, IEEE, …

11. Smart metering and beyond solution offering components Smart metering and beyond GBS offering components These service components support the Smart metering offering in accordance with Intelligent Utility Network (IUN) methodology. • Smart Grid strategy development • Smart Metering strategy development • Project Planning & Project Management • Business Case Development and Review • Business Process Redesign and Requirements Identification • Technology Validation and Testing • Systems Architectural Planning • Vendor Evaluation • Selection • Contracting and Management • Pilot Design and Execution • Systems Integration • Communications Network Planning • Deployment • Management & Security • Regulatory Strategy and Support • AMI Operations Planning • AMI System Management & Security • MDMS and Head End Application Management • Managed Application

12. Smart metering and beyond solution offering components Our IBM GTS portfolio covers a full range of IT offerings supporting the Smart Metering & Beyond Infrastructure Smart metering and beyond GTS offering components Enterprise Services Workplace Services Business and Application Services Data Center Services Strategy & Design Transition, Implementation, & Transformation Service Management Life Cycle Managed Operations

13. Smart metering and beyond solution offering components Smart metering and beyond SWG offering components SAFE Framework for Asset Lifecycle Management

14. Smart metering and beyond solution offering components Smart metering and beyond STG offering components IBM can analyze, size and deploy the right infrastructure for Smart Meter Deployments. Information compliance availability retention security

15. Agenda • E&U Value Chain • Smart metering & beyond Components • SM&B Point-of-View (POV) Highlights • SM&B Experience • SM&B Tools, Accelerators and Assets

16. SM&B POV Highlights Demand reduction is emerging to drive smart metering deployments in developed countries; replacing operational efficiency drivers Grid Efficiency Drivers North America & Western Europe • Efficiencies • Grid automation • Competitive markets Grid Efficiency Drivers Latin America, Asia & Pacific Demand Reduction Drivers • Governance model • Policy agenda • Energy independence • Demand reduction • Renewable energy integration Demand Reduction Drivers Reliability Drivers 1st Generation 2nd Generation Reliability Drivers • Growth capacity • Electricity theft reduction • Access • Energy demand growth • Reliability 3rd Generation

17. SM&B POV Highlights Benefits realization is immature, but examples demonstrate value in key areas Revenue enhancement • Cash flow • Fewer estimated bills • Shorter billing cycles • Loss Identification • Tamper alarms • Load balancing • Move-in detection • Loss response • Load limiting • Remote and virtual disconnect Distribution operations / reliability • Outage detection and restoration • Identifying “single-light-out” situations • Asset optimization • Asset loading • Emergency response • Emergency load shedding • Estimation rate reduced over 85% from the non-smart meter estimation rate: • Non-smart meter estimation rate => 1.75%: Smart meter estimation rate => 0.25%2 • Reduced truck rolls to confirm service after outages. • Avoiding 2,000 truck rolls per storm, which was not in the original business case.1 • Smart meter data indicated more electricity theft “than anticipated.”1 • Electricity theft arrests double and $1.6 billion in electricity payments recouped sooner over a two year period3 Customer service • Better customer information for Customer Service Representatives • Reduced customer call volumes Demand management • Time-based pricing (TOU, CPP) • Energy profiling and analysis • Online energy audits / analysis • Load control extensions • Reconnect time – 36 minutes, 05 seconds2 Sources: 1IBM Analysis for 1 million meter deployment; 2Smart Grid News, Sept 17, 2010; 3 Jacksonville Electric Authority (JEA), smartmeters Research Store, Dec 7, 2010

18. SM&B POV Highlights The mainstream media is focusing primarily on initial stumbles and perceived threats to the consumer ACCURACY • Texas Regulators Order Smart Meter Accuracy Check - Power Market Today, 8 March 2010 • Petition to suspend PG&E's program, "until questions about their accuracy are fully resolved.“ - The Wall Street Journal, 9 Sept 2010 PRIVACYand DATA SECURITY • Data a "treasure trove" for hackers, thieves or marketers - The Windsor Star, 20 August 2010 • Smart Meters are the entry gates for hackers - SPIEGEL, 30 March, 2010 • Once hacked, the devices could infect the UK's entire smart grid - SC Magazine , 2 September 2010 VALUE • Expensive "savings" with Smart Meters - SPIEGEL, 16 August, 2010 • The business case for smart grid is a bit tough to build - South China Morning Post , 28 June 2010 • The consumer is “not prepared topay a premium for metering” –New Zealand Herald, 11 Aug 2010 Smart meter deployment IMPLICATIONS HEALTH • Protesters Halt Smart Meter Installation in Santa Cruz County – KSWB, Aug 27, 2010 • SMART-meter grievances have prompted a 600% rise in complaints - Herald-Sun, 26 June 2010 • PG&E customers allege “public health” risks from smart meters - Power Market Today, 8 Sept 2010

19. Larger smart meter deployments are driving change across the smart meter infrastructure and in the end-to-end network SM&B POV Highlights Customers and other stakeholders Data center – NMS and MDMS Data center – legacy apps Premise Last mile LAN WAN Office Network Backhaul Network Access Network Neighborhood Network Home Area Network Load control devices Meter communications:Standards are evolving. Meter Data Management System Retailers Displays CIS Web OMS Meters LAN Customer Home Energy Management System: Standards and architectures emerging. WAN ERP External data provision Data CollectionSystems GIS Integration with existing distributor systems Network protocols: Standards for the smart meter network layer are evolving toward Internet Protocol (IP). Smart Metering and Beyond offering from IBM

20. Agenda • E&U Value Chain • Smart metering & beyond Components • SM&B Point-of-View (POV) Highlights • SM&B Experience • SM&B Tools, Accelerators and Assets

21. IBM smart metering engagements span the globe SM&B experience North America: American Electric Power Austin Energy BC Hydro BELCO CenterPoint Energy Con Edison Consumers Energy CPFL Energia Entergy First Energy Florida Power & Light Hydro One Hydro Ottawa IESO (Ontario) London Hydro NV Energy Oncor Ontario Energy Board Pacific Gas & Electric Pacific Northwest National Laboratory PECO Pepco Holdings Inc Progress Energy Smart Meter Texas Southern California Edison Toronto Hydro Europe: A2A - AEM Torino A2A - ASM Brescia Alliander EDF (France) EDF Energy (UK) EDP EnBW Endesa Enemalta Enel ESB Networks Göteborg Energi MVV Energie AG Nuon Oxxio RWE npower Scottish & Southern Energy 30 Italian distributors Australia: Country Energy Energy Australia Western Power

22. IBM’s smart meter experience drives deeply into our offering areas SM&B experience

23. IBM has real, hands-on experience with most smart meter infrastructure and Meter Data Management System vendors SM&B experience

24. SM&B experience IBM’s smart meter experience includes end-to-end solutions as well as expertise in each area of smart meter programs Operations Implementation Strategy Planning and selection Pre-deploymentpreparation • Strategy development • Business cases • Technology pilots • Project planning • Vendor selection • Regulatory support • System architectures • System integration • Field trial planning and execution • Deployment • Vendor management • Software implementation • Hosting • Application management • Operations management IBM understands the key success factors, linkages and dependencies in smart meter programs through experience advancing projects through strategy, planning and deployment. • Number of projects: 9 • Meters represented: Over 20 million meters IBM strategic support incorporates deep industry and technical insight through ongoing stakeholder and partner engagement. IBM’s strategies and plans can be implemented because they incorporate lessons learned from hands-on deployment experience. • Number of projects: 35 • Meters represented: Over 19 million meters • Lead systems integrator: 9 • Number of projects: 25 • Meters represented: Over 35 million meters

25. Agenda • E&U Value Chain • Smart metering & beyond Components • SM&B Point-of-View (POV) Highlights • SM&B Experience • SM&B Tools, Accelerators and Assets

26. SM&B Tools, Accelerators and Assets Significant investment has already been made in harvesting and developing Smart metering and beyond Tools, Accelerators and Assets for Sales Enablement Value Driven Proposal Insert Solutioning Kit Client POV Presentation Quick Reference Guide Sales Enablement Package      Collateral/Solution Brief Training Course Internal Webinar/Podcast Demos Partner Ecosystem     All Smart metering and beyond Tools, Accelerators and Assets are accessible through the newly developed E7U industrySPACE Wiki here.  above indicates currently available. indicates in-development. http://w3.ibm.com/connections/wikis/home?lang=en#/wiki/W7376549beb2d_4d95_9d87_e11abbc90adb/page/Smart%20metering%20and%20beyond

27. SM&B Tools, Accelerators and Assets Investments have also been made in developing Delivery Tools, Accelerators and Assets Delivery Enablement Package Solutioning Enablement Package Architecture Overview Training Materials    

28. SM&B Tools, Accelerators and Assets Actions & Next Steps    • Roll-out • POV University call 17 Dec • Anchor Client Industry Framework and Solution Gap Workshop 11 Jan • CEE University presentation 24 Jan • Smart metering and beyond Launch on E&U Academy call 28 Jan • Sales Enablement University call Feb • Demo/Asset call early Mar • Global Community development and regular communication • Offering Wiki • Partner Ecosystem update • Contacts update • On-going Maintenance/Periodic update • Smart Metering and Beyond Component Detail • Deck for each component • At least 2 references per component • MDMS IBM Compatibility matrix • NAN/AMI IBM Compatibility matrix • Brand content coordination for Research, GBS, GTS, SWG and STG • Region/Customer Coordination • Theater quarterly call with E&U leadership on needs and customer focus • Anchor customer focus • Asset development/harvest focus customers 

29. SM&B Tools, Accelerators and Assets Assets in support of Smart metering and beyond    • Rapid Start Toolkit • IBM Program Work Center • eMeter Smart Grid Appliance • Network Operations Center • SAP to MDUS Integration • IBM ISV MDM Compatibility Matrix • Smart metering and beyond component detail artifacts (avail. For Centralized Meter Services) • eMeter Smart Grid Appliance support from RDS • GTS Maintenance & Technical Services packaged with Network Operations Center • IBM ISV AMI Compatibility Matrix • IBM Systems & Storage Collaboration

30. Formulate Define Design Deliver Assess Optimize Mobilize Smart meter business process planning tools Organizational frameworks Functional requirements and process maps SM&B Tools, Accelerators and Assets IBM Smart Meter Rapid Start Kit enables the rapidly definition and design of projects These toolkits allow IBM team members to leverage assets and knowledge at existing and new clients to accelerate delivery of business value. Solution frameworks and implementation plan templates Smart meter cost/benefit benchmarks Governance models Domain definitions

31. Formulate Define Design Deliver Assess Optimize Mobilize Benefices Rapides et Durables SM&B Tools, Accelerators and Assets … and includes business requirements accelerators, and interface inventory accelerators Scope of business requirement accelerators Over 20,000 functional and non-functional business related to Meter Installation, Meter to Cash, Customer Care, Distribution Automation, Network Operations, Demand Management, Home Area Networks and In Home Displays. Our accelerators span over 20 Smart Grid vendors Scope of interface inventory accelerators Over 500 interfaces identified with business data elements business related to Meter Installation, Meter to Cash, Customer Care, Distribution Automation, Network Operations, Demand Management, Home Area Networks and In Home Displays. Basis for accelerators: • Pacific Gas & Electric • Southern California Edison • PHI • Oncor • Progress • CenterPoint • Sempra

32. Formulate Define Design Deliver Assess Optimize Mobilize SM&B Tools, Accelerators and Assets To enable utilities to reduce risk, cut time out of the integration process, get access to experience and expertise for their Smart metering programs, IBM has teamed with eMeter to offer the Smart Grid Appliance: a pre-integrated readily scalable, bundled solution of all the server hardware, software and services needed to start a project out on the right track on day one. This appliance can help utilities cut smart grid implementation and test cycle time from a year or more to as little as six months and reduce implementation costs by as much as 60 percent. eMeter Smart Grid Appliance reduces risk, streamlines the integration process, and applies experience and expertise

33. Tivoli Security (TSIEM, TAM, TIM, TSPM, TCIM) AMI Servers Enterprise Application Interfaces Private / WebSphere DataPower XI50 • IBM Tivoli Netcool Omnibus • IBM Tivoli Netcool Impact Network Management Events Management Asset Management (Maximo EAM and TAMIT) • IBM Tivoli Network Manager • BM Tivoli Netcool Configuration Manager Dashboards, Analytics, Service Monitoring • IBM Tivoli Business Service Manager • BM Tivoli Monitoring and ITCAM • IBM Infosphere Stream Cognos and SPSS Outage Management (TSRM) SM&B Tools, Accelerators and Assets NOC - Smart Metering / AMI Network Management Solution *RED: Core Products in Solution Bundle *Blue: Adjacent/Secondary Products

34. Pune SAP IS-U harvesting Npower/SSE use case harvesting Tivoli Security WS ESB SAP PI IS-U ws CRM CIM IPS / Site Protector / PSIEM / … SM&B Tools, Accelerators and Assets SAP to MDUS (MDM ISV’s) Integration Template and Accelerator in La Gaude • Start from the La Gaude AMM set-up • Introduce SAP (IS-U/CRM/PI) as the ERP/call center engine needed for the new scenarios, as per SAFE guidelines • By leveraging whatever SAP asset that can be harvested from Pune • By leveraging npower/SSE use case requirements • And in parallel • Make sure that the Tivoli Security architecture defined by Sadu team can apply as-is on this set-up Metering Infrastructure ERP (substitute) WS ESB AMM console M C ws MDM ws M Metering Management C M EAM ws Monitor. FFA Enterprise Service Bus

35. Not part of product roadmap Developed, but not in production. Meets some of the functional scope Recently released and in limited production (e.g. pilots) Meets some of the functional scope In full production at least two sites Meets most of the functional scope Part of long-term product roadmap, but not developed Mature production in production at several sites Meets most or all of the functional scope SM&B Tools, Accelerators and Assets ISV MDM Linkage and Capability Accelerator - Functional Comparison Summary example

36. 10 server generic Web application solution • Load balancer • Web server • Web server (redundant) • Proxy server or Web seal • Application server 1 • Application server 2 • Lightweight Directory Access Protocol or directory or service registration server • Monitoring server • Database server • File or File Transfer Protocol or media or content server SM&B Tools, Accelerators and Assets RDS - The longer the deployment takes, the longer the middleware investment sits idle. Rapid Deployment Services (RDS) will extend this capability to the eMeter Smart Grid Appliance Asset The number of components multiply the deployment time. • Every virtual or physical server in the solution is a configuration item or a touch point for software installation and configuration. • For a simple 10-server solution, the manual effort will take approximately 92 steps, and hundreds of hours of labor. • A single solution contains at least eight different complex products and operating systems, requiring at least eight different high-level skill sets.

37. MTS - SM&B Tools, Accelerators and Assets Maintenance and technical support capabilities The following diagram illustrates how the maintenance and technical support capabilities are focused in the data center and across the WAN Existing MTS offering/capabilities Extension of MTS offering/capabilities To-be-developed MTS offering/capabilities Customers and other stakeholders Data center – NMS and MDMS Data center – legacy apps WAN Last mile LAN Premise 1 1 1 Hardware Main-tenance/ Software Support : networking equipment (minimum of L1/L2 support) Hardware Maintenance: networking equipment (minimum of L1/L2 support) Hardware Maintenance / Software Support: servers, storage, networking equipment, OS, middleware and SWG platforms 2 IBM Smart Grid Solution Support 3 Bundled Smart Grid Solution Support (i.e., eMeter-Power) 4 Technical Support Out-tasking (TSO) 5 End to End Support Management MTS core capabilities lie in supporting the data center

38. SM&B Tools, Accelerators and Assets MTS - Retail POS and Banking ATM/ABM present strong analog examples illustrating MTS’s capabilities to support a distributed network environment Data center – Legacy apps WAN Last mile LAN Premise Banking Automated Teller Machine (ATM)/ Automated Banking Machine (ABM) Support Overview Equipment Supported • MTS provides ATM/ABM technical support for a large number of banking institutions globally • Our Delivery teams not only provide remote support services to banks, but our SSRs enter the bank branch to repair and replace ATM/ABM machines and their parts • For two of the biggest banks in Canada, MTS provides ATM monitoring from a centralized deliver center, monitoring approximately 3,500 ATMs over a wide geographic footprint • ATM/ABM machines (remote and on-site support and repair) • Data center equipment (networking, servers, storage) KEY MTS L1.L2.L3 support MTS w/ partners

39. Smart Metering Opportunity: Data Processing & Management Intelligent Utility Network IBM Best Hardware, Software, Services Customer Management + Meter Data Backup and Recovery Storage & Archival Smart Metering Servers Systems Software Transmission & Distribution & Power Generation 2010 – 2015 and Beyond Energy Retail Additional Business Value Longer Term Benefits Meter Install Case Study 4M meters, 85% read 1/ hr, 15% read 1/15 mins Head-end & MDMS Data Tsunami Impact 2010- 2025 Storage case over 3 years • Data Strategy • Communication • IT Skills/Education • IT Management • Agility • Risk Management • Customer Focus • Modular Design • Integrated Solution • Scalability • Apps. Performance • Data Intelligence 137TBytes SMart (FIT-FOR-PURPOSE) Solution Partners Smart Metering Solutions Network Device Head End and Meter Data Management Operations Software Software 2010 - 2015 Meter Installation Penetration Rate: 55% North America 40% Europe 7% SE Asia Smart Meters Source: Pike Research ~ $19.5 Billion 250 million meters IBM => Support, Technology, Testing, Marketing programs, Delivery options, Differentiation, Analytics, & more Partners +IBM (HW, SW, Services) = SCALABLE,Integrated, GlobalSolution IBM => Support, Technology, Testing, Marketing programs, Delivery options, Differentiation, Analytics, & more

40. AEM - ARGUS

41. ELECTROMAGNETICA - ENERGSys

42. Landis Gyr

43. Landis + Gyr