Keynote address for Metering Latin America delivered Oct. 25, 2011 by Chris King, Chief Regulatory Officer, eMeter Inc.

1. Smart Meters: Global Regulatory Trends
Chris King, Chief Regulatory Officer
October 2011
Copyright © 2011 eMeter Corp. All rights reserved.

2. eMeter brief introduction
Company
C Business
B i
• Corporate headquarters in • Smart meter and smart grid
Silicon Valley software
- Teams in Europe, India, Asia-
d • O
Operates in utility b k
l back
Pacific (Australia/China) office
• Executive team average 25 • AMI/Meter vendor-neutral
y
years experience
p
• Embrace system integrators
- Enterprise software and other business partners
- Metering and communications
Slide 1 Copyright © 2011 eMeter Corp. All rights reserved.

3. eMeter s
eMeter’s customers: in production,
at scale around the world
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Slide 2 Copyright © 2011 eMeter Corp. All rights reserved.

4. Global utility industry
b y y
Utilities
• 2 7 billion electric, gas, and water meters
2.7 electric gas
• 12,000 electric utilities
• About 6,000 with more than 30k customers
,
• 12% automated with AMR or AMI
• 140 million smart meters – interval data, two-way
communications
Ownership – often a mix
• National governments
• Municipalities
• Investors (IOUs)
• Member cooperatives in U.S.
Slide 3 Copyright © 2011 eMeter Corp. All rights reserved.

5. Utility Core Drivers
y
“All politics is local”
• Politics
- Utilities -> Regulators -> Politicians -> Consumers
- “Reliable service at low cost”
- Reliability = both generation and distribution
• Managing political and financial risk
- Over-build
- Own and control
- Avoid headlines
• Ratesetting
- For expenses, dollar-for-dollar recovery
- For rate base, capital recovery plus ROE (IOUs only)
- Higher sales = higher profits
Slide 4 Copyright © 2011 eMeter Corp. All rights reserved.

6. Current regulatory drivers
g y
• Policy goals
- Economic growth/cleantech
- Energy security
- Utility efficiency and reliability
- Global warming
g
- Reliable energy at low cost
• Policies that drive smart grid adoption
- Renewable resource targets, including distributed generation
- Energy savings targets
- State/national deployment mandates
- Financial incentives for utilities
- Electric vehicles
• Th
These policies are l
li i largely i place
l in l
Slide 5 Copyright © 2011 eMeter Corp. All rights reserved.

7. Smart grid benefits for water utilities
How do advanced metering & meter data
management improve th system?
ti the t ?
• Improve accuracy & immediacy of metering information therefore
revenue & customer service
• Reduce Non-Revenue Water (NWR – about 40% in Brazil)
- Detect unauthorized consumption
- Detect leaks
- Identify failed meters and registers
• Life extension
• Lower investment requirements
• Tracking infrastructure cost
• P
Pressure management
t
Brazil Water Regions

8. Smart meter market drivers
• North America
- U.S. state initiatives
- Renewable resources and energy savings targets
- Keeping up with the crowd
• Europe
- EU directives
- Renewable resources (e.g. Scandinavia, Spain,
Germany)
- Energy savings targets (e.g. UK)
- G id modernization and efficiency (Eastern Europe)
Grid d i ti d ffi i (E t E )
• China and India
- Global political positioning
- E
Energy th ft i India
theft in I di
• Latin America
- Supply adequacy (hydro risk, e.g. 2001 drought)
- Di t ib ti
Distribution reliability (16 h
li bilit hours per year)
)
- Energy theft
Slide 7 Copyright © 2011 eMeter Corp. All rights reserved.

9. Smart grid business case summary –
societal perspective
i t l ti
Annualized Savings and Costs for U.S.
$80
ons of Dollars
$70
$60
$50
$
D
$40
$30
Billio
$20
$10
$0
Source: eMeter Strategic Consulting
Slide 8 Copyright © 2011 eMeter Corp. All rights reserved.

10. International
• European Union
- New draft Energy Efficiency Directive this summer
- Provides concrete steps to achieve 2020 and 2022 goals for smart meters
• U.K.
- 100% rollout required by 2019
- Central data agency (“Data Communications Company”)
- Retailers moving forward now on “foundation” solutions
foundation
- Smart meter installation schedule begins second half 2012
• Scandinavia
- Norway: smart meter rollout by 2016
- Finland: by 2013
• France
- French regulator approved smart meter business case last month
- Government endorsed rollout last month; complete by 2018
• Germany
- New energy legislation in progress; smart meters being discussed
• Brazil
- Regulator planning decision/announcement soon
Slide 9 Copyright © 2011 eMeter Corp. All rights reserved.

11. Smart meter policy map – world
See U.S.
Rollout by 2020
100%
80-100%
50-80%
0-50%
0%
Slide 10 Copyright © 2011 eMeter Corp. All rights reserved.

12. Smart meter policy map – U.S.
Rollout by 2020
100%
80-100%
50-80%
0-50%
0%
Slide 11 Copyright © 2011 eMeter Corp. All rights reserved.

13. Consumers want information and
pricing choices
100%
80%
60%
40% Favor time‐based
prices
20% Desire more energy
D i
usage data
0%
Source: PSE, Accenture Power Perceptions, Zpryme, Genesis
Slide 12 Copyright © 2011 eMeter Corp. All rights reserved.

14. Information empowers choice
p
Enhanced information has been shown to help customers manage
energy with knowledge of the cost implications of their choices.
Relation of Value to Cost Control/ Options
Benchmarks
Slide 13 Copyright © 2011 eMeter Corp. All rights reserved.

15. PowerCentsDC smart grid survey
g y
Highest Interest is Usage
Consumers Want Data by Appliance
Pushed to Them
100%
81%
73% 76% 73% 75%
80% 71%
14% 56%
14% 60%
52% 40%
20%
20%
0%
arisons
pliance
Daily usage
Hourly usage
Daily cost
emails
y alerts
Weekly e
sage by app
Compa
Energy
With bill Mailed reports
Utility website Email
Us
Source: Smart Meter Pilot Program, Inc.
Slide 14 Copyright © 2011 eMeter Corp. All rights reserved.

16. Information feedback results
b
Results from 42 programs of different mechanisms, including in-
home displays, websites, bill inserts, and mailed reports.
Direct Indirect
Feedback Feedback
Programs Programs Total Programs Savings
3 3 20%
20% of peak,
1 1 weekdays
2 1 3 15‐19%, Mon‐Sat
8 6 14 10‐14%
11 3 14 5 9%
5‐9%
4 3 7 0‐4%
Weighted average savings 9.4%
Source: eMeter Strategic Consulting
Slide 15 Copyright © 2011 eMeter Corp. All rights reserved.

17. Pricing programs show energy
users reduce peak
g
11
10
9
8
Average of 20%
7
Frequency
6
5
4
3
2
1
-
0% to 2%
2% to 6%
6% to 10%
10% to 14%
14% to 18%
18% to 22%
22% to 26%
26% to 30%
30% to 34%
34% to 38%
38% to 42%
42% to 46%
46% to 50%
50% to 54%
54% to 58%
%
%
%
%
%
%
%
%
%
%
%
%
%
Source: Brattle Group Peak Reduction Range
Slide 16 Copyright © 2011 eMeter Corp. All rights reserved.

18. Smart meter data access
• Free access to one’s own data already being
collected
- Online access to backhauled data within 48 hours of
collection
- Real time access to meter via home/building area
Real-time
network (HAN) interface
• Ability to authorize third parties to receive the
y p
data
- Trusted energy advisor
• Data privacy and security protections
Slide 17 Copyright © 2011 eMeter Corp. All rights reserved.

19. Data access & privacy
Standards for data, price information, and control signals
Utility Data Center Authorized Third Party
Open
p
Meter Utility Utility Open ADE/ADR
Internet
Data Billing Web ADE/ Energy Energy
Mgmt & CIS Site ADR Info Mgmt
App App
Smart Network
Application Platform
Communication Network Head
End
Internet
Governed by
data privacy &
security rules
Home Router Laptop
p p
Wi Fi T-stat
AMI Radio Smart
Smart Meter Radio Phone
Communications HAN
Network HAN Radio HAN
(“Backhaul”) Radio Device
OpenADR HAN
Radio
Slide 18 Copyright © 2011 eMeter Corp. All rights reserved.

20. Synthesis: Consumer’s Perspective
y p
“All the pieces are needed to make the smart grid work”
Segments
• Savers
• Sustainers
• Technophiles
• I
Ignorers
Applications Consumers Applications
• Energy information
• Pricing choices
• Convenience of automation
Technologies Technologies
• Smart meters and
communications
• Smart thermostats, lighting,
appliances, equipment
pp , q p
• Software
Slide 19 Copyright © 2011 eMeter Corp. All rights reserved.

21. Policy recommendations
Policymakers should have common vision of Smart Grid benefits:
• Society
• Financial savings and higher reliability via improved load factor and system efficiency
g g y p y y
• Faster and wider adoption of renewable energy and electric vehicles
• Primary policy tool to achieve policy goals of reliable supply, energy savings, renewable
portfolio standards, and emission reductions
• Energy consumers
• Access to detailed energy information
• Voluntary time-based pricing options
• Widespread availability of automated appliances and devices
Policymakers should establish specific targets
• Installation – e.g., 80% of meters in European Union by 2020, 100% by 2022
• Meter functionality – two-way communications, interval data, daily reads, HAN
y y , , y ,
interface, disconnect switch, voltage & outage alerts
• Promote but not mandate standards
• Note: targets need to reflect country-specific requirements
g y p q