1. + Transactive Energy – Business Models and Value Realization Session Transactive Energy Conference and Workshop 2013 Portland, Oregon May 23, 2013 Dian Grueneich Principal, Dian Grueneich Consulting California Public Utilities Commission Commissioner Emeritus Dian.grueneich@grueneich.com

2. + Transactive Energy “[Refers] to techniques for managing the generation, consumption or flow of electric power within an electric power system through the use of economic or market based constructs while considering grid reliability constraints.” - GridWise Architecture Council’s Website (May 2013) Framework includes not just the grid, but connecting systems (buildings, EVs) 2

3. + A Possible Valuation Framework Reliability AffordabilitySustainability 3

4. + Transactive Energy – System Changes What are the changes in each of these areas due to transactive energy? Reliability – supplies more volatile, less grid operational control Affordability – potential for cost savings with new technologies; massive new investments needed; stranded costs; stranded consumers (?) Sustainability – energy efficiency, demand response, distributed energy resources, and IT have lower GHG emissions; firming resources matter; will system overbuild?; location matters 4

5. + Transactive Energy – Value Added How does transactive energy provide value in each of these areas? Reliability – means to incorporate new functions and controls; greater local and customer control possible Affordability – forward pricing structures enable customer-side investments; low barriers to participation; new IT provides automation and can lower cost Sustainability – societal benefits from large-scale clean DER adoption 5

6. + A Vision for TE Business Model and Value Realization Development Create scenarios balancing reliability/affordability/ sustainability (RAS) Develop open source, transparent modeling tools for analyzing scenarios Understand outcomes and tradeoffs Address changes needed in traditional regulatory framework to support changes in business and valuation models Movement from siloed to integrated policy making Development of enhanced analytical tools Research on development of new markets, particularly at distribution level and integrated distribution/customer/transmission transactions Facilitate uptake of new technologies (e.g., building automation, enhanced analytics using interval meter data) across market structures and players 6

7. + Questions? Dian Grueneich Principal, Dian Grueneich Consulting (510) 248-9788 Dian.grueneich@grueneich.com 7