1 The Tipping Point macro forces are converging to create a revolutionary “Tipping Point” within 5 years change will be fast – and disruptive to the existing order enormous societal wealth will be created Site Controls will be a key player in the revolution – and one of the primary beneficiaries of the wealth created.

2 Converging Forces renewable (but intermittent) energy sources renewable (but intermittent) energy sources carbon constraints carbon constraints grid T&D congestion grid T&D congestion power generation gap power generation gap increasing coincidental peaks increasing coincidental peaks Market Changes Technologies Constraints capacity markets capacity markets social responsibility social responsibility demand response monetization options demand response monetization options price transparency price transparency demand management & generation parity demand management & generation parity Tipping Point public price signals public price signals consumption transparency consumption transparency energy storage technologies energy storage technologies energy management interfaces energy management interfaces low – cost, two – way comms low – cost, two – way comms low – cost, intelligent, networked controls low – cost, intelligent, networked controls

3 The Electric Industry Dilemma: Supply Cannot Keep Pace with Demand Sources: (1) International Energy Agency, (2) The Center for Smart Energy, (3) Electric Power Research Institute Generation GapAmount Increase in U.S. Electricity Generation Required during the next 10 years (1) 19% Increase in U.S. Electricity Generation Scheduled during the next 10 years (1) 6% Transmission & Distribution GapAmount Increase in U.S. Electricity T&D Required during the next 10 years (1) 20% Increase in U.S. Electricity T&D Scheduled during the next 10 years (1) 5% Projected Infrastructure ImplicationsAmount U.S. & Canadian Infrastructure $$$ Required from 2003 and 2030(1) $1.6 trillion U.S. & Canadian Capacity Required from 2003 and 2030(1) 758,000 MW Demand Response ImplicationsAmount U.S. Demand Response Market (Annual)(3) $4.2 billion U.S. & Canadian Capacity required to serve less than 80 hours per year(2) 10%

4 Market Impact of Power Shortages

5 CO2 concentrations increasingly significantly and … Power generation currently creates approximately 38% of the CO2 generated by the United States.

6 Carbon situation gets darker still Virtually all of the generation capacity additions are projected to be coal plants. Power generation is projected to account for approximately 42% of the CO2 generated by the United States in 2030.

Where do we go from here? It’s time to change the world! 7

Q&A Chris Hickman President, Energy Services