1. S MART M ETERS IN T EXAS Overcoming Barriers to Smart Grids & New Energy Services University of Texas Interdisciplinary Energy Conference Austin, Texas April 7, 2011 1

2. R ETAIL C OMPETITION IN T EXAS 6 million customers have choice of retail provider Separation of functions required: generation, delivery, retail sales Delivery service is regulated Distribution utilities perform metering Utilities transmit consumption data to ERCOT for settlement and to retailers for retail billing 2

3. A DVANCED M ETERS 2.5 million smart meters installed By end of 2013 over 6 million will be deployed Information tool for consumers and retail providers to track energy use, at www.smartmetertexas.com www.smartmetertexas.com Third parties authorized by customers will have access Home Area Networks (HAN) being deployed 3

4. P OLICY S UPPORT FOR A DVANCED M ETERS Statute permits surcharge and encourages deployment PUC rule prescribes required features and basis for approval of surcharge PUC has approved deployment plans for three utilities PUC involved in on-going stakeholder dialogue concerning implementation issues 4

5. K EY B ENEFITS Quicker service restoration after outages Reducing customer energy costs AMS data access Time of use pricing options More accurate assignment of costs to customers Remote service: switching providers, connection, disconnection, meter read Faster service, lower fees for customers Better pre-paid services 5

6. C USTOMER R ESPONSE P ROGRAMS Smart meters create opportunity for retail providers to engage customers in wholesale market Physical hedging—shifting consumption to avoid high-price intervals Deferring consumption during electric system emergencies 6