Executive Summary Perfect Power

1. Executive Summary Perfect Power Draft v2 September 21, 2011

2. Business Ambition • UL and the Galvin Electricity Initiative will create and launch a consumer-focused certification program to benchmark current grid performance, identify areas for improvement and provide a means for demonstrating achievement in four key areas: • 1. Safety, security and reliability • 2. Consumer empowerment • 3. Green grid/environmental performance • 4. Cost transparency and efficient use of capital. • The organization will become the de facto thought leader for certification, training and consulting in the arena of electrical generation, transmission and distribution. UL will generate $24 M by 2015 through four service offerings: project certification, personnel certification, training, consulting and product evaluations.

3. Opportunity Summary Opportunity Situation Complication • Introduction of Smart Grid has caused lines of demarcation between utilities and consumers to blur • PV, Wind, inverters, EV, storage & HEM changing the landscape and rules of engagement • Traditionally UL focused downstream on safety and performance of household appliances • Power outages and quality issues costing US economy $125B • Consumers concerned about cost, reliability, environment and lack of empowerment with their electric power • Lack of focus on performance outcomes and systems approaches slowing progress and innovation • Create a performance measurement system for grid modeled after LEED’s • Empower consumers, communities, businesses and regulators with tools to create dramatically better performance from power system • UL to partner with Galvin Institute to develop and implement Perfect Power Seal of Approval

4. Perfect Power Certification

5. Leverage a Proven Model • Program Oversight • Founding members • Industry leadership • Standards ownership • Membership funded • Program Administration • Project registration • Project certification • Component certification • Accreditation • Professional certification • Training • Consulting

6. Microgrid Growth Projections

7. Competitor Strengths and Weaknesses

8. Additional Opportunities – Home Area Networks

9. What is it and why are we involved? • Supported by a $10.4 million smart grid demonstration grant from the Department of Energy (and more than $14 million in matching funds from project partners), Pecan Street Inc. is leading a team of researchers from The University of Texas, National Renewable Energy Laboratory and Environmental Defense Fund to develop and test an integrated clean energy smart grid of tomorrow in the homes of today • UL will focus on: • A. Safety – electrical fire and shock hazards for Home Energy Management systems and appliances • Electro Magnetic Compatibility issues • Functional Safety • Tamper Resistant • B. Interoperability and cyber security • Looking on both sides of the meter • Striving for safe living and working environments • UL’s role in the project will include: • Develop metrics that define certification • Insure that products developed meet proper certification • Insure that interoperability can be achieved with both new and legacy products • Investigate Smart Grid protocols

10. Additional Opportunities – Quality Programs • “ A Path to Transformation” • Sponsors: • Purpose: Leverage proven quality methodology to achieve transformative performance improvements • Methodology: Four Stage Approach – 1. Continuous Improvement System 2. Integrated Operating System 3. New Value Creation System 4.Sustainability and Governance System • UL Opportunity: • Leverage UL Six Sigma Team to train and assist utilities in applying process improvement techniques • Develop relationships and demonstrate capabilities with key utility sponsors and leverage to additional program participants

11. Organizational Roles Perfect Power Institute • IP Owner • Board of Directors Bob Galvin, Mike Galvin, Kurt Yeager, John Kelly, Clyde Kofman • Executive Advisory Committee Paul O’Neil, John Rowe, John Estey, Brewster McCracken • Executive Director – John Kelly • Administrate standard development • Advise and administrate Certification Program development • Deliver project certifications, personnel certifications & training

12. UL Roles and Responsibilities • Underwriters Laboratories will provide substantial in-kind support through 2012 and serve as founding partner. Organizational development and support activities include: • Administrate development of Perfect Power standard • Lead development of Certification Program • Develop training & personnel certification program • Deliver training, project and personnel certification • Promote the Perfect Power concept and secure sponsors, project certification, professional certification, and services revenue. • Development of product and systems standards and performance certification programs (e.g. Home Energy Management Systems and in-home devices).

13. UL Team

14. Summary • PPSA identified as key commercial initiative, partnered with GEI, sponsored by Clyde • Strong fit with Second Century, both not-for-profit and for-profit • PPSA leverages seven years of technical development by GEI, strong fit with UL core competencies • PPSA development active with pilot training delivered in Q4-11 • Immediate need for Standard Development Lead • Immediate need for Certification Program Development Lead • For more information: • http://www.galvinpower.org/sealofapproval