CenterPoint Energy Street Light Luminaire Replacement LED Street Light Conversion Program August 27, 2015

CenterPoint Energy LED Street Light Replacement The purpose of this presentation is to provide a brief description of CenterPoint Energy’s LED Street Light Conversion Program Introduce LED street lighting technology Provide information on the conversion project with City of Houston. Explain the future financial impact of an LED conversion 2

What is LED? Light-Emitting Diode: a semiconductor device that emits visible light when an electric current passes through it 3

Typical Lighting-class LED Package The LED Package provides: Protection for the LED chip from the outside environment Conductive path to carry generated heat away from the LED chip Reliability Lens & encapsulant systems should not discolor under UV and exposure to high amounts of luminous flux LED chip Substrate Lens, RI ~1.4 Wire Bond Phosphor 4

HID Lamp vs. LED Technology Technological Differences: –Directionality of generated light Omni-directional (HID) Directional (LED) –Means of evacuating generated heat Convection (HID) Conduction (LED) –Light Source Single (HID) Multiple (LED) HID lamps: Reflector (light) (heat) LEDs: 90°-140° viewing angle (light) (heat) (light) 5

Lamp Types  High Pressure Sodium  Amber/Orange in Color  Standard Installation  Economical – 8 year life  Metal Halide  White/Blue in Color  Not Economical – 2-3 year life  More Expensive  Mercury Vapor  White/Blue in Color  Restricted Availability  1,000 left in system  LED – Light Emitting Diode  White/Blue in Color  Highly Efficient – 8-10 Years 6

HID Light Pattern vs. LED Light Pattern - 150W HPS 7

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HID Light Pattern vs. LED Light Pattern 9

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Traditional Street Lights vs. LED Luminaires 11

Traditional Street Lights vs. LED Luminaires 12 Operate – A Culture of Safety – High Quality White Light

Traditional Street Lights vs. LED Luminaires 13 Serve – Customer Focus – Societal Benefits such as Dark Sky Initiative Los Angeles Skyline – 2008 Los Angeles Skyline – 2012

LED: Advantages and Disadvantages CenterPoint Energy has been conducting pilot testing of the technology for the previous six years ADVANTAGES Energy efficient: 80% of the electricity used by an LED is converted to light, compared to just 10% for incandescent bulbs. Long and predictable life: LEDs last up to 100,000 hours or more; substantially longer than High Pressure Sodium and Metal Halide lamps Excellent CRI (color rendering index): LEDs can produce a high quality of white light that allows the eye to detect colors more effectively. Environmentally friendly: LEDs emit very little infrared radiation and contain no mercury. Directional lighting: LEDs focus light in a particular direction, making them useful for spotlight and other applications. Quick turn on and off: LEDs come on with full brightness instantly. Unlike mercury vapor, metal halide and sodium vapor lamps (commonly used in street lighting), LEDs do not have a problem restarting immediately (hot ignition) following a brief power failure or inadvertent turn off. LED luminaires may provide up to approximately 60% kWh energy savings for the end-use customer DISADVANTAGES Cost: LEDs are currently more expensive than other conventional HID sources. Heat: LEDs are very heat sensitive. Correct dissipation of heat is necessary to light output and lifespan of the fixture. 14

Equivalent LED Luminaires 15 LED LuminairePercent of CNP LampsAlternative For 45 Watt~75% 100W MV* 100W HPS* 70W HPS 100W MH* 95 Watt~10% 175W MV 150W HPS 175W MH 115 Watt~14% 250W HPS 250W MH 180 Watt~< 1% 400W MV 400W MH * MV = Mercury Vapor, HPS = High Pressure Sodium, MH = Metal Halide

CNP Approved LED Street Lights 16 45W, 4800 lumen LED Luminaire Allowable Range: 45 – 56W 4400 – 5400 lumens Vendor A 95W, 7900 lumen LED Luminaire Allowable Range: 85 – 105W 7110 – 8690 lumens Vendor B 115W, lumen LED Luminaire Allowable Range: 102 – 125W 9850 – lumens Vendor C **All approved fixtures are required to have a minimum 10 year warranty

Street Light Luminaire Replacement in the City of Houston 17 CenterPoint Energy is replacing approximately 175,000 mercury vapor, high pressure sodium, and metal halide luminaires with LED alternatives The anticipated time frame for completion of the project is within five years *Time schedule is contingent upon workforce availability and vendor production constraints Estimated kWh savings to the City of Houston: Over 70 million kWh annually CenterPoint will continue to work toward identifying LED replacement luminaires for the approximate 8,000 City of Houston street lights not covered by the four LED luminaires to be added to the Tariff No upfront cost to the City of Houston Initially customers will continue to pay the same monthly CNP tariff rate as current technology; however LED rates will change in the future. Year 1Year 2Year 3Year 4Year 5 20%25% 15%

LED Conversion Program 18  The LED conversion program includes Removal of existing HID luminaire and Photoelectric Relay (PER) Installation of equivalent LED luminaire Installation of “hardened” Photoelectric Relay (PER) Notes:  LED luminaire costs have decreased significantly over time and are expected to continue to decline  Increased life of the LED luminaire, coupled with the “hardened” PER is expected to reduce street light outages

LED Conversion Program 19 Municipalities will be required to enter into an installation agreement. Some of the terms & conditions included are:  Deployment Schedule The deployment schedule will be based on the number of lights and current workload  All new street light installations, including the 6% allotment, will be LED technology  Agreement to the recently accepted LED tariff rates, and the potential of increased LED tariff rates in the future

Financial Impact 20  LED fixtures average 1 ½ to 3 times the cost of standard HPS fixtures  Additional capital labor required to replace existing lights  Undepreciated HPS fixtures remain in the streetlight asset base  Energy consumption will decrease by as much as 50% (Retail Provider)  Monthly fixture charge paid to CNP will likely increase substantially  CNP plans to recover LED costs through DCRF annual filing  In rate case, project costs will move from DCRF to rate base

21 Questions?