1. Comverge Comments on NPRR555 ©2012 Comverge – Confidential and Proprietary 1 08.8.13 Colin Meehan 512-537-2169 cmeehan@comverge

2. Comverge Introduction Comverge is a leading provider of both Residential/Small Commercial and C&I Demand Response. On the Residential side: –Over 5M devices in the field –Recruited over 1.25 M customers for Direct Load Control Programs –Installed 220,000 devices in a single year –Provided control to 32 GW of peak energy in 2012 –Achieved penetration rates over 30% of addressable market Currently active in ERCOT ©2013 Comverge – Confidential and Proprietary 2

3. Summary Comverge supports the foundational concepts that underlie NPRR555 We don’t anticipate the current draft of NPRR555 will attract new DR resources to the market We support NPRR555 only as a first step toward attracting economic DR ©2012 Comverge – Confidential and Proprietary 3

4. Benefits of NPRR555 Aides price formation in the market during scarcity conditions Provides market with more visibility into DR operations Increases market efficiency ©2012 Comverge – Confidential and Proprietary 4

5. Changes Needed to Attract new DR to the Market Allow Demand Response Aggregators (DRAs) to participate directly in the market Allow DR providers to offer to sell their resource into the market (not just bid to buy) Re-evaluate LMP-G methodology, which adds substantial complexity to the current Loads in SCED approach ©2012 Comverge – Confidential and Proprietary 5

6. Response to Staff Questions Under the current construct in which a load can only submit a bid to buy the customer already has every incentive necessary to perform in the energy market. Since the benefits of NPRR555 accrue to the market and the load receives little if any direct benefit under this proposal, imposing penalties is likely to deter any load from participating. Comverge recognizes that there may be a need for additional penalties for loads participating in ancillary services. Those penalties should at a minimum be no more stringent than existing penalties for generation and may need some additional flexibility. ©2012 Comverge – Confidential and Proprietary 6

7. In Conclusion… Comverge supports this concept, but the proposal has several flaws that mean the current iteration will not attract new load to the market Additional steps are needed, particularly removing the barriers to entry for DRAs Changes to this draft should seek to attract more participation in the market rather than exclude some loads from the market ©2012 Comverge – Confidential and Proprietary 7

8. Thank you! Colin Meehan Director, Regulatory and Market Strategy 512-537-2169 cmeehan@comverge.com ©2012 Comverge – Confidential and Proprietary 8