1. Introduction to Echelon and the Networked Energy Services (NES) Advanced Metering Infrastructure Bob Warden VP Corporate Accounts

2. 2 Company Overview A networking infrastructure company –Pioneering machine-to-machine (M2M) and embedded Internet technologies –Providing standards-based hardware and software products A “green tech” company in a “green” era –Enabling energy efficiencies throughout its product lines Two main product lines –L ON W ORKS ® Infrastructure –Networked Energy Services (NES)

3. 3 Echelon Is A Pioneer and World Leader in Advanced Metering Nearly two decades of experience in device networking Supplier of networking infrastructure to world’s largest AMI deployment –27+ million meters using Echelon’s products & technology Over 1 million advanced meters — all based on IEC & ANSI standards — being deployed today

4. Selection Criteria and Guiding Principles 1.Networking infrastructure project, not just AMI or AMR 2.Standards-based hardware and software products 3.Operational and business decisions should not be constrained by infrastructure choices 4.Guiding principles include: –Ability to choose products and services from best in class companies –Communication network can carry information from any device –Standard connections with minimal integration efforts –Ability to remotely upgrade and adapt devices

5. 5 Next-Generation Systems Enable New Utility Business Processes Manual meter reading Monthly kWh reads Automatic Meter Reading (AMR) One-way or two-way Monthly kWh reads Interval data Basic theft detection Outage/Restoration Detection Advanced Metering Infrastructure (AMI) On-demand reads Programmable load intervals Bi-directional and net metering TOU, RTP, CPP pricing options Demand response Gas & water metering Smart Meters Solid-state platform Integrated communications Integrated disconnect switch > Remotely disconnect > Remotely connect Power quality data > Voltage readings > Current readings > Power Factor > Frequency > Detailed power outage data Advanced theft detection Remote programmable Remotely upgradeable Internal expansion port > Future functionality Smart Grid Energy Management Services > Residential, Commercial Home Area Network gateway > PLC (i.e. L ON W ORKS ® ) > RF (i.e. Bluetooth) Web-based applications > Demand Response > Prepayment > Load Control > Revenue Protection > Web Move in/out Distribution > Load profiling / engineering > Phase balancing > Transformer optimization > Energy forecasting > Outage detection and GIS > Restoration automation > Work Force Management > Automated Field Dispatch > Asset Management Investment Cost Opportunity Cost of Investment Business Process Changes delivering ROI

6. 6 NES Architecture & Components Networked Energy Services

7. 7 NES Meters Market-leading advanced functionality Detailed electrical measurements –Active and reactive energy –Import and export metering –Flexible time of use metering Extended information & alarms –Multi-channel data recorder –Power quality data and alarms –Tamper and theft detection –Connectivity to other meters and devices 200A disconnect under glass –On/off –Load limiting/service upgrade to any level –Prepay “Virtual IP” card in every meter –Share a single physical IP connection –Communicate to in-home devices Remote firmware download support Designed for >20 year life with <0.3% annual failure rate Traditional, compact form-factor

8. 8 NES network operating system –Enables choice of off-the-shelf applications –Supports quick development of custom applications and integrations Scalable to millions of devices Redundant architecture Backward-compatible Standards-based NES System Software Web services interface based network operating system Utility Software Web servicesWeb events IP WAN NES System Software

9. 9 Fundamental Design Principles Leverage the power of networks Use best-of-breed standards Network-grade, end-to-end security is essential “Never visit the meter again”

10. 10 Fundamental Design Principles Leverage the power of networks Data networks share expensive resources to reduce cost per connected point –Networked printers, networked servers, shared broadband connection, … Advanced metering networks should too –Spread cost of “expensive” components (e.g., modems, backhaul connection) across many meters and devices The NES system is not a “PLC” system The NES system is not an “RF” system The NES system is a networked system – Leverages the strengths of each to lower deployment cost, lower operating costs, and lower life-cycle costs

11. 11 Fundamental Design Principles Use best-of-breed standards Each element of the system uses standards optimized & proven for that application domain  Meters built on proven metering standards ANSI C12.18, ANSI C12.19  Networks built on proven networking standards ANSI 709, TCP/IP  IT interfaces built on proven enterprise standards XML/SOAP (Web services) Leads to highest quality & security Drives down cost of network connectivity, IT integration –The largest contributors to total cost of ownership for an advanced metering system

12. 12 Fundamental Design Principles Network-grade, end-to-end security is essential Everything is secured –No manufacturing “back doors” around security –Devices are always in a secured state – All communication in secured end-to-end Security begins in the factory Security is multi-layer Keys are random –For example, knowing the unique key of one meter gives you no information for finding the unique key for another meter Unique keys never have to be distributed to field employees

13. 13 Fundamental Design Principles “Never visit the meter again” High level of “base” functionality built into every meter Enable/configure functionality remotely instead of replacing products –Built-in, firmware controlled disconnect in every meter –Hourly metering and multi tariff in every meter –Prepay support in every meter –Power quality in every meter –Multi-channel data logger/load profiling in every meter –… Remote upgrade rather than replacing products –All components support remote firmware upgrade Long-lived, reliable products –Designed for >20 year life with <0.3% annual failure rate

14. 14 Next-Generation Systems Have Already Taken Hold in Europe — Powered By Echelon Technology “…during the tender process, a generation change in technology took place…” — Göran Lundgren, CEO of Vattenfall distribution, from Ny Teknik magazine Smart meters, Mr Conti believes, will give Enel an edge “for the next 20 or 30 years”. — Fulvio Conti, CEO Enel, from The Economist magazine

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16. © Vattenfall AB AMRELVA 3 System Features In addition to AMR All meters have: Remote disconnect –Move in – Move out –Summer houses –Future pre-pay Load control relay Power outage recording and reporting including phase loss Power Quality –Voltage, current, frequency monitoring Hourly load profile About 12 meters/concentrator Over 300,000 meters read every night Adding over 5000 meters per week

17. 17 Market Strategy Deliver a complete system infrastructure –Highly reliable –Low cost –Broad functionality –Globally applicable Establish it as a multi-vendor standard –Open to any company; equal terms for all –Open interfaces to allow innovation and customization at both ends of the system – meters and applications software –Guaranteed standard and interoperable network infrastructure Create a “future-proof” platform for utilities

18. 18 The Only Advanced Metering System Available Today From Multiple Sources Common advanced metering infrastructure Differentiated solutions Interoperable applications

19. 19 NES is a Platform for Smart Grid NES Smart Meter with IP Open Web Services API Network Operating System PLC A Band for Utility Distribution Automation Networks Meter Expansion Port TCPIP WAN or LAN NES Smart Meters L ON M ARK ® i/f + RF NES System Servers Database Data Collection Configuration Security Home Automation Networks Building Automation Networks IP HAN Gate way Open HAN RF

20. 20 Summary Next-generation systems are the future of metering and the utility industry –Only enabled by using truly smart meters –Require a network-centric approach to reliability, security, and scalability Next-generation systems deliver substantial benefits to utilities and consumers –Dramatically more beneficial than just AMR with two-way communications Next-generation systems enable in-home applications Next-generation systems provide the infrastructure for meeting today’s requirements and the platform for delivering future applications