1. Smart Grid Deployment in Texas Presented by:

2. Contents 1.Texas Market Overview – Barry Smitherman 2.Pecan Street Project – Brewster McCracken 3.CenterPoint Energy – Kenny Mercado 4.Reliant Energy – Bill Harmon 5.Retail Customer Products & Tools 6.Standards - Mark Carpenter, Tobin Richardson 7.Texas Grid of the Future – Barry Smitherman 2

3. Texas Is Unique There are 3 electric grids in the U.S.A. - the Eastern Interconnection, the Western Interconnection, and the Electric Reliability Council of Texas (ERCOT). Much of Texas’s grid is independently operated by ERCOT with the Texas Regional Entity ensuring compliance with national reliability standards. Small portions of Texas are part of the Western Interconnection or Eastern Interconnection and some of these areas are operated by multi-state entities, such as the Southwest Power Pool. 3

4. The ERCOT Grid ERCOT manages the flow of electric power to 22 million Texas customers. ERCOT manages 85% of the state's electric load. The ERCOT grid covers 75% of the Texas land area. 4 Transmission costs in ERCOT’s open-access system are allocated amongst all customers using a “postage stamp” methodology.

5. ERCOT’s Current Market Structure Generation Transmission and Distribution Competitive Production Regulated Open Access End Users Competitive Sales 5 Retail Electric Providers Retail Electric Providers

6. Pecan Street Project Best Buy Intel Landis + Gyr LG Galvin Initiative Oracle Sony Texas Gas Service Univ. of Texas HEMS deployments from 5 companies Trials of multiple pricing models Independent interoperability lab Standards consortium (as of 5/20) 6

7. CenterPoint Energy Smart Grid Project - $200M DOE Stimulus Grant 7 Advanced Metering System (AMS) $490 M from CNP and $150M from DOE – complete mid 2012 Accelerate installation of 2.2 million AMS meters from 2014 Progress to date:  Collects 1 million meter and 100 million 15-minute interval readings daily (posted to the Smart Meter Texas centralized database for easy customer access)  Eliminates 8,000 routine service visits daily saving $3,300 per day in fuel (Over 870,000 total service visits eliminated) – Most service orders completed by 9:00 AM (Reconnects within 1 hour)  For outages, implementing automatic notification from the meter to displace customer phone calls Providing consumers more control of their electric consumption  Completed In Home Display Pilot (70% of participants have taken steps to reduce consumption)  Consumer messaging capability enables retailers to offer Pre-pay products, Time of Use rates and Demand Response services Intelligent Grid (IG) $50M from CNP and $50M from DOE – complete mid 2013 Automate 15% of service territory with Advanced Distribution Management capabilities  Implement a “self healing” system that automatically identifies outages, isolates faulted sections, re-routes power, and improves overall reliability performance Allows pro-active alerts to customers via email, text messages and phone for issues such as outages and storm preparation Created or Retained 550 jobs

8. Objectives Insight Services Usage/Cost Email Web Portals Mobile Applications In-Bill Alerts Smart Appliances “Smart” Rate Plans “Smart” Payment Plans HAN Devices In-Home-Displays Smart Thermostats Reliant Energy Smart Grid Project “Smart Grid Enabled Consumer Participation” Accelerate delivery of Smart Grid enabled products and services to consumers. Demonstrate benefits of Smart Energy products and services for Texas consumers - education and online learning tools. Enroll 500,000 consumers on Smart Energy Products/Services by March of 2013. Cost: $44M from Reliant / $20M from DOE Timeline: 3 Years (Mar 10 - Mar 13) Cost & TimelineProducts & Services Key Partners Centerpoint ● Oncor ● GE ● SAP ● Best Buy PUCT/SMT Portal ● Control-4 ● Tendril Customer Enrollment Milestones 8

9. Smart Energy Customer Engagement Evolution… Insights, Choices, & Convenience More than 250K customers benefiting from at least one Smart Energy product or service 8 distinct Smart Energy products/ services (6 in production available to consumers, 2 in pilot). Products & services enabled by Smart Meter Texas portal. Created or retained over 60 jobs First electricity provider to host a booth at the Consumer Electronics Show (Jan-11, Las Vegas, NV) Competitive retail market drives innovation and customer focus Smart Energy Customer Engagement is an evolution…Insights, Choices, & Convenience In Market Products & Services Insights Services Emails, Alerts, and Web Portals providing customers digestible information, analysis, and tips on their cost & usage HEMs & Thermostats Real time usage insights & HVAC remote control enabled via Zigbee Smart Energy protocols Rate & Payment Plans Time of Use and Prepayment plans incenting customers to shift or lower usage and avoid upfront deposits Accomplishments & Key Learnings 9

10. Retail Products & Services In Home Devices are being installed in customers homes today: – Champion Energy – Direct Energy – TXU Energy – Reliant Energy – 500 IHD rollout – CNP – 500 IHD rollout – Oncor Usage Insights services Time of Use Rate Plans Electric Vehicles Retail Services provided remotely (avoid truck roll) – Switching from REP to REP – Disconnection, and Reconnection of Service 3 rd Parties – Customers in Texas can authorize a 3 rd Party to have their 15-minute data – Working with NAESB Data Privacy Task Force – Will finalize business rules in 2011 10

11. Smart Meter Texas www.smartmetertexas.com Smart Meter Data provided in a 15-minute, day after basis 300 Million data points per day (3 million customers / 15-minute data by June 2011) Service for Customers, REPs, 3 rd Parties Standard tool for all Utilities in ERCOT – different vendors, 1 format for data files Joining of In Home Devices for Customers, REPs, and 3 rd Parties 11

12. Texas is Moving Today and Staying in Sync With Tomorrow 12 (utilities working collaboratively for our customers to give them more control/choice)

13. PUCT Policy Considerations for ERCOT Promote a diverse portfolio of generation resources Reduce exposure to commodity price volatility Facilitate renewables Reduce/eliminate grid congestion Enhance grid reliability Facilitate retail customer choice Lower costs to consumers Improve air quality Promote national security Jobs, jobs, jobs 13

14. ERCOT’s Diversified Portfolio * 2011-2015 projections regarding wind energy and “other” energy are conservative because only facilities with signed interconnection agreements are included and hydro facilities are not included. Sources of underlying data: ERCOT’s 2008 Constraints and Needs Report, ERCOT’s 2008 - 2010 Demand and Energy Reports, and ERCOT transmission planning data. 14

15. Building the Grid of the Future in ERCOT The nodal market design has been implemented in ERCOT, allowing for more efficient pricing, dispatch, and siting of generation. CREZ is primarily designed to move renewable energy sources from remote parts of Texas to more heavily populated areas. A number of CREZ projects also will provide transmission necessary to meet the long- term needs of the growing area west of the I-35 corridor. More wind energy will further diversify the fuel portfolio of Texas’s generation resources. CREZ is primarily designed to move renewable energy sources from remote parts of Texas to more heavily populated areas. A number of CREZ projects also will provide transmission necessary to meet the long- term needs of the growing area west of the I-35 corridor. More wind energy will further diversify the fuel portfolio of Texas’s generation resources. Smart meters help improve reliability by pinpointing outages, give customers a tool to help control their energy use, allow REPs to offer innovative products, and facilitate EV deployment. Oncor is currently installing more than 3 million smart meters in its service area, CenterPoint more than 2 million, and AEP more than 1.1 million. 15

16. Appendix

17. Reliant Energy e-Sense TM Weekly Summary Email  At-A-Glance overview of Weekly Use & Costs *  Comparison to Previous Week *  Estimated Bill for the Month *  Graph of Daily Usage & Cost with Temperatures *  Energy Savings Tips * Enabled by Smart Meter Interval Level Data retrieved from Smart Meter Texas Portal 17

18. Reliant Energy e-SenseTM Account Management (Web Portal)  Estimated Cost To Date & Projected Bill For The Month *  Establish Preset Text & Email Alerts *  Monthly, Weekly, Daily Usage & Cost Graphs *  Standard Bill & Payment Functions  iGoogle Gadget Mini-Portal for “at a glance” * Enabled by Smart Meter Interval Level Data retrieved from Smart Meter Texas Portal 18

19. Reliant Energy e-SenseTM Home Energy Monitor & Programmable Thermostat (Thermostat in Pilot)  Real Time Usage & Cost Information *  Month To Date Usage & Cost *  Communicates with Smart Meter thru Zigbee Smart Meter Profile 1.0 Protocol *  Integrated Programmable Thermostat * * Enabled by Smart Meter HAN Functionality (Zigbee) reference: Tendril, Control-4 19

20. Reliant Energy e-Sense TM Alerts Preset Alerts  Bill Due  Cost Exceeds Budget *  Projected Bill Exceeds Budget *  Daily Usage Exceeds Threshold *  Usage Spiked By 25% * Text On-Demand  “BILL” – bill amount and due date  “EST BILL” – estimated bill amount *  “COST” – cost to date *  “USAGE” – usage to date * * Enabled by Smart Meter Interval Level Data retrieved from Smart Meter Texas Portal 20