1. Load Management Maximizing Demand Response Programs EUCI Conferences Westminster, Colorado October 8 & 9, 2003 On Call - 1,000 MW and Fifteen Years Later Ed Malemezian

2. EUCI Conferences Load Management October 8 & 9, 2003 Florida Power & Light - Today 9,600 Employees 8 million people Half of Florida 86 Generating Units 500 Substations 69,000 miles of transmission and distribution lines

3. EUCI Conferences Load Management October 8 & 9, 2003 Florida Power & Light - April 2003

4. EUCI Conferences Load Management October 8 & 9, 2003 Average Monthly Energy Usage per Customer (in kWh)

5. EUCI Conferences Load Management October 8 & 9, 2003 Peak Energy Use - Systemwide

6. EUCI Conferences Load Management October 8 & 9, 2003 Florida Power & Light - The 90’s FPL has added more than 900,000 customer accounts since 1990. In 2002 alone, FPL added nearly 94,000 new accounts for 2.4% growth Customer Accounts (million)

7. EUCI Conferences Load Management October 8 & 9, 2003 Remember the 70’s and 80’s ….. FPL was growing at annual rates of 3%, 4%, and above Remember the Arab oil embargo in 1973- 1974 Remember the sharp price increase in 1974 and again in 1979 (following the 1978 Iranian revolution) Remember the “Golden Age of DSM Programs” that followed

8. EUCI Conferences Load Management October 8 & 9, 2003 Remember the 70’s and 80’s ….. Supply could not keep up with demand …. Prices went up …. Something needed to be done ….

9. EUCI Conferences Load Management October 8 & 9, 2003 Demand Side Management Programs FPL (and other utilities) designed and implemented many different Demand Side Management (DSM) programs Existing programs served as the jumping off point for many new DSM initiatives These programs were designed to: u Reduce Energy Consumption and / or u Reduce Utility Peak Demand

10. EUCI Conferences Load Management October 8 & 9, 2003 Reduce Energy Consumption - kWh u Energy efficiencies - motors, A/C SEER, refrigerators, white goods, etc u Whole house efficiency programs u Lighting u Window film u Attic insulation u Energy audits u Many others

11. EUCI Conferences Load Management October 8 & 9, 2003 Reduce Utility Peak Demand - kW u All the previous energy savings programs take some kW off peak u Thermal storage u Time of Use rates u Real Time Pricing rates u Demand Response programs u Load Control - Direct and Indirect … note the lines get fuzzy...

12. EUCI Conferences Load Management October 8 & 9, 2003 The 70’s - Curtailable Rates - Indirect Provided demand reduction during times of emergency Curtailments were very labor intensive Power Supply notified FPL account managers via pager FPL account managers called customers by telephone The “right people” were sometimes elusive and tough to find

13. EUCI Conferences Load Management October 8 & 9, 2003 Curtailable Rates - continued The program depended on each customer to drop the proper amount of load Customers generally ran around turning off circuit breakers Customers sometimes did not comply, and thereby incurred penalties There had to be a better way ….

14. EUCI Conferences Load Management October 8 & 9, 2003 Objectives for New Load Control Programs Increase participation - get more MW reduction when required Simplify and automate the execution process Hard control vs. soft control Dependable MW’s translate directly to higher incentives available for customers Provide customers with additional choices

15. EUCI Conferences Load Management October 8 & 9, 2003 Why Direct Control ??? FPL needs to satisfy the Peak Demand for electricity Peak Demand occurs for only a few hours each year Historically, FPL built power plants to satisfy the Peak Demand Dependable - The MW’s are really there Simple, automated, and customer-friendly

16. EUCI Conferences Load Management October 8 & 9, 2003 Demand Reduction - Peak Clipping Through Direct Load Control Shapes the utility load curve Reduces Peak Load Growth Don’t need to build as many power plants Results in lower Electric Rates

17. EUCI Conferences Load Management October 8 & 9, 2003 Load Control Programs at FPL Commercial and Industrial - CILC & CDR u Direct Control - Bidirectional w/customer feedback u Wireless Public Network Communications System - CDPD / CDMA u Telephone units fill in coverage holes u First units installed in 1987 u 520 Customers u 450 MW Peak Demand Reduction u Customer savings: 5% to 20% typical

18. EUCI Conferences Load Management October 8 & 9, 2003 Load Control Programs at FPL Residential and Business On Call u Direct Control - Bidirectional u Powerline Communications System u First units installed in 1987 u 710,000 Customers u 815,000 Transponders u 1,000 MW in normal operation u 2,000 MW in an emergency - SCRAM u 460 Substations equipped for On Call

19. EUCI Conferences Load Management October 8 & 9, 2003 Residential and Business On Call LCT - Load Control Transponder Billing / CIS Client Workstations (PC) SCADA, Energy Management, Outage Management Systems and/or Other Platforms LMS Master Station Distribution Substation Voice Grade Communication Power Lines (unconditioned) Substation Communications Equipment Service To Home A/C & Heat Water Heater LAN / WAN Electric Meter (with or w/o AMR) Capacitor Bank

20. EUCI Conferences Load Management October 8 & 9, 2003 Major Components of TWACS Major Components of TWACS ® ® LMS - Load Management System - Master Station computer located in FPL’s System Control Center (EMS) SCE - Substation Communications Equipment - Computer and power equipment located in each TWACS equipped substation RCE - Remote Communications Equipment - Field equipment: Boxes and under-glass modules that do the work at each customer

21. EUCI Conferences Load Management October 8 & 9, 2003 The TWACS Technology The TWACS ® Technology OutboundCommunication InboundCommunication 1357 4268 Inbound Bit

22. EUCI Conferences Load Management October 8 & 9, 2003 Residential Load Control - On Call Appliances placed “On Call” u Central Air Conditioning u Cycle - 15 minutes off, every 30 minutes, for 3 hours u Extended - 3 consecutive hours off in 24 hours u 7 months: April through October u Central Strip Heat u Cycle - 15 minutes off, every 30 minutes, for 3 hours u Extended - 4 consecutive hours off in 24 hours u 5 months: November through March

23. EUCI Conferences Load Management October 8 & 9, 2003 Residential Load Control - On Call Appliances placed “On Call” - continued u Electric Water Heaters u Extended - 4 consecutive hours off in 24 hours u 12 months: year round u Swimming Pool Pumps u Extended - 4 consecutive hours off in 24 hours u 12 months: year round

24. EUCI Conferences Load Management October 8 & 9, 2003 Residential On Call Incentives Incentive Payments per Year u Air Conditioning Cycle: $42 old / $21 new u Air Conditioning Extended: $63 u Strip Heat Cycle: $10 u Strip Heat Extended: $20 u Water Heat: $42 old / $18 new u Pool Pump: $36 u Total per customer: Typical $80 old / $45 new New incentive $$ apply to customers signing up or changing after April 1, 2003

25. EUCI Conferences Load Management October 8 & 9, 2003 Business On Call Direct Expansion (DX) Air Conditioning u Cycle - 15 minutes off, every 30 minutes, for 6 hours maximum u 7 months: April through October u Must use AC from 3-5 PM, 4 days / week u Incentive: $2 per ton, per month u 20 tons per customer - typical today u 16,000 Customers u 42 MW in normal operation u 83 MW in an emergency - SCRAM

26. EUCI Conferences Load Management October 8 & 9, 2003 On Call Demand Reductions Attained

27. EUCI Conferences Load Management October 8 & 9, 2003 Substation Control Equipment Modulation Transformer Unit Outbound Modulation Unit Control & Receiving Unit (inside building)

28. EUCI Conferences Load Management October 8 & 9, 2003 Load Control Transponder - LCT u Remote Control of “convenience” loads to reduce peak demand u Two-Way to confirm receipt of commands u Monitors loads to measure effectiveness u Independent control of two appliances u Autonomous “cycling” of appliances u Downloadable addresses and shed strategy

29. EUCI Conferences Load Management October 8 & 9, 2003 Typical LCT Installation Thermostat Fan COOLCOOL ONON OFFOFF Load Control Transponder AUTOAUTO 24V120V Fan Control Cooling Control Power Supply Water Heater 240V Central A/C System

30. EUCI Conferences Load Management October 8 & 9, 2003 TWACS Also Does AMR at FPL TWACS ® Also Does AMR at FPL u Uses same communications infrastructure as On Call u 40,000 Meters today u Residential customers u Hard to read: Fences, dogs, inside meters, etc. u Safety concerns u In service for approximately 10 years u FPL is presently evaluating an AMR rollout

31. EUCI Conferences Load Management October 8 & 9, 2003 Customer Promotion In the beginning …. u FPL promoted On Call very heavily u Residential only u Print ads u TV u Bill inserts u Word of mouth u Very popular program u Thousands and thousands of customers signed up

32. EUCI Conferences Load Management October 8 & 9, 2003 Customer Promotion - continued Today …. u Business On Call - Targeted marketing u Residential On Call - No marketing u Number of MW is capped u Word of mouth u Friends, neighbors, relatives u 300 calls a week u Web site - 60 inquiries a month u Closure rate: 80% to 85% u Still very popular

33. EUCI Conferences Load Management October 8 & 9, 2003 On Call Savings - Web Information On Call is the easiest way to lower your electric bill. By going "On Call" you agree to let FPL occasionally cycle off select major appliances for short periods of time, only when absolutely necessary. Most likely, you won't even notice when the On Call program is activated. But you'll definitely notice the savings. That's because in exchange for making your appliances available to go On Call, FPL will credit your electric bill every month - even if the program is never activated. Only the appliances you choose will be enrolled in the program, which means you're in control of the savings

34. EUCI Conferences Load Management October 8 & 9, 2003 Customer Inconvenience The key to successful Direct Load Control is a proper understanding of customers and their feelings … Surprise … Surprise !!! Extensive, up front, research must be done to find out the points where u Customers notice your are controlling them u Customers get upset enough to exit the program very few customers ever drop out FPL does an excellent job - The proof is in the pudding... very few customers ever drop out

35. EUCI Conferences Load Management October 8 & 9, 2003 What Happens When Customer Moves u LCT remains in place u Immediately after the electric service is made active, the new customer is sent a letter... u “Congratulations”... you are very fortunate to have moved into a home equipped with On Call... u On Call details and credit amount are provided u “Thanks for your participation”... u You can request On Call be changed or deactivated any time you are unhappy with it

36. EUCI Conferences Load Management October 8 & 9, 2003 Customer Moves - continued The new customer’s response …. u Virtually 100% are happy to try out On Call u Very few ever call back later to get On Call deactivated u The customer is happy with the credit $$ u FPL is happy … it’s investment is preserved u Everybody wins … what a deal !!!

37. EUCI Conferences Load Management October 8 & 9, 2003 Demand Response or Direct Load Control ??? Demand Response is defined … u Pricing programs or rate structures, including time-of-use and real-time prices, which provide energy consumers with a price per unit of energy that varies according to the period in which the energy is purchased or consumed, to allow customers to vary their demand and usage in response to such prices, and manage their energy costs by shifting usage to a lower cost period, or reducing consumption overall

38. EUCI Conferences Load Management October 8 & 9, 2003 Demand Response Customers get to: u Choose how they respond u Choice is good - Freedom, the customer is in charge u Choice is bad - Decisions need to be made u Set the degree of “inconvenience” experienced Response can be manual to fully automated u Manual Response u Simple, less costly systems u Requires a customer response each time u Risky if the customer does not respond - not home

39. EUCI Conferences Load Management October 8 & 9, 2003 Demand Response - continued Response can be manual to fully automated u Automated Response u More complicated systems u Once set up, does not require any further customer response u Little risk - Response happens even if not there u Residential - These systems are starting to emerge u Commercial Industrial - Still a very big opportunity for practical systems to be developed & deployed u In my opinion, Automated Systems are the only way to go !!!

40. EUCI Conferences Load Management October 8 & 9, 2003 Direct Load Control - On Call Customers get to: u Choose to participate or not u Choose the devices controlled u Central Air Conditioning u Central Strip Heat u Water Heater u Swimming Pool Pump u Set the degree of “inconvenience” experienced u Cycling strategy u Extended strategy

41. EUCI Conferences Load Management October 8 & 9, 2003 Direct Load Control - continued Automated Response u Simple, relatively inexpensive system u Once installed, does not require any customer response u Little risk u Response happens even if customer is not there u Customer receives credit even when FPL does not control and they work very well !!! u Residential and Business On Call, CILC, and CDR are real... and they work very well !!!

42. EUCI Conferences Load Management October 8 & 9, 2003 Demand Response or Direct Load Control ??? Demand Response and Direct Load Control have a great deal in common u Both allow customer choices u Both are intended to reduce Peak Demand and associated high-priced, on-peak, energy costs u Both reward the customer for reducing utility energy costs u In many respects, Direct Load Control can be considered as a subset of Demand Response

43. EUCI Conferences Load Management October 8 & 9, 2003 Does On Call Work ??? Over 975 Megawatts Shed in 60 Seconds August 1995 Today Have 2000 MW Available for SCRAM On Call SCRAM

44. EUCI Conferences Load Management October 8 & 9, 2003 Does It Work ??? - Other Examples u May 5, 2003 - 52 MW - Turkey Point trips u Sept 9, 2002 - 138 MW - Manatee Plants trip u Jan 10, 2001 - 236 MW - 5 units derated u Jan 5, 2001 - 892 MW - Weather / Emergency sales u Jan 1, 2001 - 1200 MW - Inadvertent SCRAM u July 20, 2000 - 331 MW - Emergency sales u May 26, 2000 - 525 MW - 2 Plants trip u Sept 4, 1999 - 717 MW - Capacity shortage u July 29, 1999 - 639 MW - Emergency sales u … plus more … these were just some of the more notable examples …

45. EUCI Conferences Load Management October 8 & 9, 2003 Does It Work ??? - Other Examples Most On Call activations were in response to system capacity shortages created by: u Extremes in weather u Generating units tripping offline u Other emergencies - gas pipeline explosion On Call can be activated to relieve localized trouble u Transmission constraints - fires under 500 kV u Voltage / VAR / Stability problems u Individual substation overloading - outage and weather It works just as intendedthat’s a very good thing !!! It works just as intended … that’s a very good thing !!!

46. EUCI Conferences Load Management October 8 & 9, 2003 FPL-All Load Management Programs FPL actively works with customers to help them reduce their use of electricity and control their bills. These programs remain among the most effective in the nation In total, have reduced enough electricity demand to date (3,300 MW) so that FPL has been able to avoid building the equivalent of 10 (400 MW) power plants.

47. EUCI Conferences Load Management October 8 & 9, 2003 Conclusions Load Management remains a key component of the Utility Integrated Resource Planning process at FPL Load Management should include u Demand Response and Direct Load Control u Traditional DSM programs Each program fills it’s piece in the puzzle glitz Don’t abandon traditional ideas just because they lack some glitz ….

48. EUCI Conferences Load Management October 8 & 9, 2003 Questions ???? u 772-286-9831 u Ed@emalemezian.com