1. June 29, 2009 Smart Grid, Demand Response & Consumers NASUCA – Boston 2009

2. 2 Agenda EnerNOC Overview What is the Smart Grid? The Smart Grids First Killer App: Demand Response Making the Smart Grid a Reality: What will it take?

3. EnerNOC Overview

4. 4 What is EnerNOC? - Big Largest Commercial & Industrial Demand Response Provider in North America, with more than 3,000 MW under management from over 2,000 end-use customers across more than 5,000 commercial and industrial sites. - Experienced EnerNOC is active in every major electric market in North America with DR programs and also has bilateral relationships with regulated utilities throughout the United States. - Thought Leader EnerNOC has received two US Patents for the aggregation of distributed energy and generation resources. We are active at NAESB, NERC and NIST in setting standards for M&V that ensure consumers get what they are paying for. - Smart Grid Operator EnerNOC operates its own Smart Grid connecting its 5,000+ sites across the United States and Canada to its Network Operation Centers in Boston and San Francisco.

5. 5 EnerNOC Demand Response EnerNOC Office ISO-New England (ISO-NE) PJM Interconnection (PJM) New York ISO (NYISO) Ontario Power Authority (OPA) Electric Reliability Council of Texas (ERCOT) PROGRAMS IN RESTRUCTURED MARKETS BILATERAL PROGRAMS – REGULATED UTILITIES Burlington Electric Department (VT) 10 MW, 4 year contract Idaho Power 65 MW, 5 year contract Pacific Gas & Electric 40 MW, 5 year contract Public Service Company of New Mexico 30 MW, 10 year contract Salt River Project 50 MW, 3 year contract San Diego Gas & Electric 25 MW, 10 year contract 25 MW expansion (pending regulatory approval) Southern California Edison 40 MW, 2 year contract Tampa Electric Company 35 MW, 4 year contract Tennessee Valley Authority 110 MW, 3 year contract Xcel Energy (Colorado) 44 MW, 8 year contract EnerNOCs Demand Response Footprint

6. 6 EnerNOC Growth 200820072006 2005 2009

7. What is the Smart Grid?

8. A Useful Analogy - What is the Internet? - Is it the network switches, server farms, and fiber optic cables? Or does the Internet, and the value it provides, come from the applications that sit on top of the enabling infrastructure? The Internets Killer Apps: email, social networking, the World Wide Web

9. Knowledge is Power – Sir. Francis Bacon The Smart Grid is ultimately about information – knowledge – but the true value – or power - of that knowledge lies in how it can be used. The Smart Grid can be a vehicle to hugely empower consumers PROVIDED It allows customers, or those they designate, to timely and directly access their information It prevents unauthorized parties from doing so – the systems are secure It provides an open foundation on which to provide services – that is, it is based on open, non-proprietary protocols, as the Internet is

10. The Smart Grid is not AMI -Advanced Meters and the Infrastructure that connects them are not inherently smart -The Smart Grid is more than meters and wires -Smart Meters and AMI enable smart applications -It is the applications that provide the real value -Demand Response / Price Responsive Load through smart rates -Energy Management -Grid Management As with the Internet, it is the applications we havent thought of yet, that will probably provide the most value to consumers

11. The Smart Grids First Killer App: Demand Response Demand response is clearly the killer application of the smart grid. - FERC Commissioner Jon Wellinghoff

12. 12 C&I Demand Response – The First Killer App - Most DR today isnt smart and comes in the form of Interruptible Tariffs (Press and Pray) and residential Direct Load Control, with little to no real-time visibility. - Aggregators like EnerNOC have enabled next-generation demand response without waiting for AMI/Smart Grid deployments – we make existing meters smarter and operate our own smart grid. - Post AMI deployment, there is still a crucial role for an Aggregator. C&I demand response will never be plug & play: –ZigBee chips may allow DLC for refrigerators and washing machines in the home, but that approach wont work for C&I loads. –If a meter cannot be successfully attached to loads, its communication and/or control functionality provides limited benefit.

13. 13 *As of 9/30/08 EnerNOCs DR Technology Network Operations Center (NOC) Our two NOCs, staffed 24x7x365, feature advanced technology and specialized staff to ensure that load reductions happen quickly, efficiently, and consistently for both the utility and end user. EnerNOC Site Server (ESS) The ESS is a gateway device that establishes communication with sites in our network and provides near-real time visibility into end-user energy consumption. The ESS also allows the NOC to remotely curtail loads in order to deliver demand response capacity. EnerNOC has invested millions in its highly-scalable technology platform, which provides a foundation for consistent and reliable DR event performance. PowerTrak® EnerNOCs web-based energy management platform, PowerTrak, monitors energy consumption and enables end-user load control. PowerTrak also provides end-users with a web portal and utilities with the ability to view load reductions during demand response events.

14. 14 Why is Demand Response Important? Annual Energy Demand 50% 100% WinterSpringSummerFall 75% 90% 25% In 2008, 10% of New Englands peak demand occurred in 46 hours.* * EnerNOC Analysis of ISO New England market data: http://www.iso-ne.com/markets/hstdata/znl_info/hourly/2008_smd_hourly.xls.

15. 15 Demand Response Benefits Ratepayers ISO-New England: Electricity Costs White Paper (2006) –Reducing electricity use by 5% during peak times will save consumers $580 million per year Brattle Group: Quantifying Demand Response Benefits in PJM (2007) –$138-281 Million of system benefits to PJM if load curtailed 3% during top 20 5-hour price blocks of 2005 Summit Blue: Demand Response Resources Valuation and Market Analysis (2006) –Forecast: Demand response will save $892 million in capacity charges over next 20 years (present value, 2004 $)

16. 16 What Do We Do? - Demand Response Actions CurtailmentSelf-Generation Examples of Processes that EnerNOC Controls Air handlers Anti-sweat heaters Chiller control Chilled water systems Defrost elements Elevators Escalators External lighting External water features HVAC systems Internal lighting Irrigation pumps Motors Outside signage Parking lot lighting Production equipment Processing lines Pool pumps / heaters Refrigeration systems Water heating

17. 17 Where Do We Do It? – Typical Providers

18. 18 0%50%100%150% How Do We Do It - Aggregation Customer 1 Customer 2 Customer 3 Customer 4 100% RISK0% RISK Customer 8 Customer 9 Customer 10 Customer 11 Customer 12 Customer 13 Customer 14 Customer 5 Customer 6 Customer 7 Customer 15 Customer 16 UtilityEnerNOC Portfolio Management is a key component of this Killer App, allowing participation from end-users who are too small to directly interface with a market or utility. 0% RISK

19. 19 How Do We Do It - Performance Coaching 4/23/09 (12:12) tatkinson@enernoc.com Bill will make sure his team shuts everything down. I will call him back in 10 minutes with an update. 4/23/09 (12:26) tatkinson@enernoc.com Called Bill again to indicate that they are making progress as of 1:20 reading, but still not all the way there. He is on it with his team, and he apologized that they werent on the ball at 12pm.

20. 20 Demand Response Benefits to Consumers RevenueCommunityEnvironment Performance coaching, coupled with portfolio management allows Aggregators like EnerNOC to guarantee performance to utilities and ISOs/RTOs without penalizing participating customers. Reliability is maintained and expensive and dirty new generation is avoided.

21. Making the Smart Grid a Reality: What will it take?

22. 22 Making the Smart Grid a Reality: What will it take? Customer/Agent access to meter data. –Customers need to own their own information and be able to access it on their own terms Interoperability and Open Standards. –The Smart Grid must be a platform that allows innovators to innovate Smart Rates –Information is useless if it is not actionable Proper incentives. -The enabling technology may be present, but without smart policies, disincentives still exist. -Policies are needed that level the playing field between DR and supply-side investments. -Decoupling addresses some disincentives associated with DSM, but mostly in terms of energy efficiency. -Carrots appear to work better than sticks at motivating changes in utility behavior.

23. 23 Energy Network Operations Center Aaron Breidenbaugh, Senior Manager of Regulatory Affairs and Public Policy 617-224-9918 abreidenbaugh@enernoc.comabreidenbaugh@enernoc.com