1. National Town Meeting on Demand Response Focus on Pepcos Washington, DC Residential Smart Meter Pilot Program Presented By Steve Sunderhauf July 14, 2009

2. 2 Pepcos Washington, DC Residential Smart Meter Pilot Program SMPPI SITES

3. 3 Pepcos Washington, DC Residential Smart Meter Pilot Program The number of participants by rate type:

4. 4 Pepcos Washington, DC Residential Smart Meter Pilot Program CRITICAL PEAK PRICING Critical Peak Prices 15 Days per Year/60 Hours 12 Summer (June – Oct.) Days/3 Winter (Nov. – Apr.) Days 4 Hours Per Day Summer CPP Rates Critical Peak: $0.75 per kWh, 2 pm – 6 pm Non-Peak: $0.10 per kWh Winter CPP Rates Critical Peak: $0.70 kWh, 6 am – 8 am and 6 pm to 8 pm Non-Peak: $0.09

5. 5 Pepcos Washington, DC Residential Smart Meter Pilot Program There were 12 critical peak days called in Summer 2008, with 5 called in August. On critical peak pricing days, customers see higher prices from 2 pm to 6 pm. For all other hours, customers enjoyed a rate discounted by 5.5% from the regular summer residential rate.

6. 6 Pepcos Washington, DC Residential Smart Meter Pilot Program There were 3 critical peak days called in winter 2008-2009, with 2 in January. On critical peak pricing days, customers see higher prices from 6 am to 8 am and 6 pm to 8 pm. For all other hours, customers enjoyed a rate discounted by 8.9% from the regular winter residential energy rate.

7. 7 Pepcos Washington, DC Residential Smart Meter Pilot Program CRITICAL PEAK REBATES Rebates for Load Reductions During Critical Peak Hours Summer (June – Oct.): $0.66 per kWh Reduced Winter (Nov. – May): $0.36 per kWh Differences by Specific Residential Rates Individual Customer Baseline Consumption Used to Calculate kWh Reductions CBL Determined by Averaging Hourly Consumption Over 3 Separate High Use Days of the Billing Month Low Income Customers Restricted to CPR

8. 8 Pepcos Washington, DC Residential Smart Meter Pilot Program There were 12 critical peak days called in Summer 2008, with 5 called in August. The critical peak hours are the same as for the Critical Peak Pricing rate (2 pm to 6 pm) – only on Critical peak days. Customers earn a rebate for energy 'not used' during the critical peak hours in comparison to other similar days in the billing period. For kWh they do use, they pay the regular price.

9. 9 Pepcos Washington, DC Residential Smart Meter Pilot Program SMPPI SAMPLE RESULTS

10. 10 Pepcos Washington, DC Residential Smart Meter Pilot Program There were 3 critical peak days called in winter 2008-2009, with 2 in January. The critical peak hours are the same as for the Critical Peak pricing rate (6 – 8 am & 6 to 8 pm) – only on critical peak days. Customers earn a rebate for energy 'not used' during the critical peak hours in comparison to other similar days in the billing period. For kWh they do use, they pay the regular price.

11. 11 Pepcos Washington, DC Residential Smart Meter Pilot Program DAY AHEAD HOURLY PRICING Prices Derived From Day Ahead Hourly Pepco PJM Zonal Locational Marginal Wholesale Energy Prices Multipliers Used to Accentuate Price Signal 111 Percent Multiplier for Hourly Prices that Exceed SOS Prices If LMP > SOS Price Then HP Price = LMP x 1.11 If LMP SOS Price Then HP Price = LMP No Prices Set Below Zero Rate Multipliers Reviewed Quarterly to Ensure Revenue Neutrality

12. 12 Pepcos Washington, DC Residential Smart Meter Pilot Program For the average weekday in August, customers on the hourly price rate saw lower prices than customers on the regular rates most of their waking hours. Prices were higher in the afternoon and for one hour after dinner.

13. 13 Pepcos Washington, DC Residential Smart Meter Pilot Program For the average weekday in January, customers on the hourly price rate saw lower prices than customers on the regular rates for the entire days.

14. 14 Pepcos Washington, DC Residential Smart Meter Pilot Program LESSONS LEARNED Simplify Pricing Calculations Automate Bill Validation Hourly kWh Should be Collected in 10 Watt Increments to Avoid Zero Intervals Establish Detailed Processes for Handling Exceptions Test Daylight Savings Changes Avoid Scattered AMI Mesh Deployments