Smart Grid Projects at NSTAR NE Electricity Restructuring Roundtable Doug Horton Project Manager, Smart Grid NSTAR Electric & Gas October 28, 2011

Agenda 1 NSTAR’s Smart Grid Projects 2 AMR Based Dynamic Pricing 3 Grid Self-Healing & Efficiency Expansion 4 Urban Grid Monitoring and Renewables Integration 5 Synchrophasor Measurement Installation 1 1

NSTAR is currently pursuing 4 new Smart Grid initiatives Description ARRA Grant Estimated Budget AMR-Based Dynamic Pricing Deployment of advanced technology to enable real-time measurement and two-way communication of energy consumption using existing AMR meters. SGDP Recipient 50% Grant $4.7M Grid Self-Healing and Efficiency Expansion Creates an “auto restoration” or “self-healing” capability on the distribution system, using modern sensing, communications and information processing based on digital technologies. SGIG $20.1M Urban Grid Monitoring and Renewables Integration Facilitates the interconnection of inverter-based distributed generation in a safe manner onto a secondary area network grid. $10.5M Synchrophasor Measurement Installation In conjunction with ISO-NE, install Phasor Measurement Units (PMU) in four substations to enable real-time phasor data applications. Sub-recipient for ISO-NE $1.6M Total $37.0M 50% DOE Funding $18.5M

Agenda 1 NSTAR’s Smart Grid Projects 2 AMR Based Dynamic Pricing 3 Grid Self-Healing & Efficiency Expansion 4 Urban Grid Monitoring and Renewables Integration 5 Synchrophasor Measurement Installation 3 3

AMR-Based Dynamic Pricing Overview Compliant with Massachusetts Green Communities Act Will include ~2,870 total NSTAR customers Integrates two way communications and near real time measurement of consumption data via Tendril Networks Home Area Network system Utilizes Time of Use Pricing by integrating interval data from Tendril to NSTAR back office systems Low-cost solution utilizing existing infrastructure Compatible with existing meters Compatible with existing billing system Utilizes Internet for communications back-haul 4 4

Tendril/NSTAR AMR-Based Dynamic Pricing All participants ERT Portal ERT Display Translate Gateway Zigbee Zigbee Half of the participants Load Control Switch Thermostat

All participants will receive real-time information on usage and cost All Participant Groups Load Control In Home Display Access to Web Portal Internet Gateway / HAN Programmable Thermostat Zigbee device Real-time power demand Billing period electricity consumption & cost Price of electricity View and manage household energy consumption online Receive messages from NSTAR Analyze historical usage patterns Home Area Network (HAN) to enable two-way communication between the customer and NSTAR Up to 4 programmable set points per day Controllable over the Internet via the Web Portal Critical Event management and control 6 6

Pricing Structures NSTAR will call no more than 12 Critical Peak Events during the course of the year, each lasting for up to 5 hours Peak Time Rebate customers will be eligible to earn a fixed rebate of $5 per event if the customer allows central air conditioning (A/C) load control TOU-CPP customers will experience steep price differentials, per the table below Illustrative TOU and CPP Rate Periods and Prices Period Summer Period (June - September) Winter Period (October - May) Illustrative Standard Electricity Price ($/kWh) Approximate Supply Price Ratio Illustrative TOU-CPP Electricity Price Critical Peak As called by NSTAR $0.16 10.62 :1 $0.90 On-peak Noon to 5pm non-holiday weekdays 4pm to 9pm non-holiday weekdays 2.23 : 1 $0.25 Off-peak All other times during the period 0.60 : 1 $0.13

Marketing & Recruitment Phase I: General Marketing Campaign Traditional marketing techniques Appeal to mainstream audiences Test/monitor receptivity “appetite and aptitude” Objectives Document outreach and results Demonstrate pilot attempts to reach all customers Complete non-participant and participant research Phase II: Targeted Marketing Objectives Secure sufficient pilot participants Complete non-participant and participant research Digital/Online

Direct Mail Targeted: 39,000 Enrolled: 1,450 Direct mail communication to eligible residents in Newton, Hopkinton, & Jamaica Plain Results Targeted: 39,000 Enrolled: 1,450 3.7% response rate. 3 week response time, on average.

Email Campaign – Initial Results Targeted: 7,500 Enrolled: 660 8.8% total response rate. Response is almost immediate.

Current Status Installed equipment in almost 1400 customer homes Integrated interval metering data into billing and CIS systems to produce Critical Peak Rebates and time-differentiated billing Called 5 Critical Events during the summer ~$3M project spending out of $4.7M total; 50% funded by US DOE 11

Agenda 1 NSTAR’s Smart Grid Projects 2 AMR Based Dynamic Pricing 3 Grid Self-Healing & Efficiency Expansion 4 Urban Grid Monitoring and Renewables Integration 5 Synchrophasor Measurement Installation 12 12

Grid Self-Healing & Efficiency Expansion Electric delivery network using modern sensing, communications, and information processing based on digital technologies Microprocessor-based measurement and control using remote sensors Current, voltage, KVA, temperature Circuit self-healing implementation (Auto-Restoration) Supervisory controlled overhead and underground switches with voltage and current sensors Interoperability standards using PI interface SCADA interface to recloser control cabinet 13 13

Three Operational Modes Mode 1: “Supervisory” mode Leverages remote control of switches Operator controlled sequences Mode 2: “Operational Acknowledgement” mode Computer-simulated restoration sequences Operator validation and execution Mode 3: “Self-Healing” mode Computer-determined restoration sequences No human intervention 14

Grid Self-Healing & Efficiency Expansion Over 1,700 SCADA Switches installed through the service territory and over 5,000 sensors monitoring the overhead electric grid 15 15

DA South 600amp Switch locations

DA North ASU locations

Smart Switch Equipment 18 18

Current Status Over 1700 smart switches deployed throughout our service territory Allow for remote switching by our SCADA operators to significantly reduce the amount of time our customers go without power 57,000 outages avoided in 2011 due to automated sectionalizing, with another 142,000 outages being restored in less than 5 minutes. Hurricane Irene: 506,000 total outages 232,000 restored in less than 1 hour 50,000 outages avoided ~$12.4M project spending out of $20M total; 50% funded by US DOE 19

Agenda 1 NSTAR’s Smart Grid Projects 2 AMR Based Dynamic Pricing 3 Grid Self-Healing & Efficiency Expansion 4 Urban Grid Monitoring and Renewables Integration 5 Synchrophasor Measurement Installation 20 20

Project Objectives Incorporate advanced sensing and monitoring equipment to test the integration of distributed resources onto a secondary area network Improve visibility into secondary area network grid using two different types of “nodes” or sensors Deploy sensors on the underground secondary network Refine methods suitable to scale broadly across urban areas nationwide Develop model to safely examine small inverter-based distributed resource integration Solar PV integration from downtown customers Potential for integration anywhere on the test grid Pave the way for other, inverter-based DR in the future 21

Demonstration Grid Location (Shown in Red) 22 22

Digital Grid Secondary Cable Monitoring CT’s

Current Status Finalized the award with the US DOE October 18, 2011 Preparing to order equipment and proceed with project as planned Initial installations of major and minor nodes planned for end of 2011 24

Agenda 1 NSTAR’s Smart Grid Projects 2 AMR Based Dynamic Pricing 3 Grid Self-Healing & Efficiency Expansion 4 Urban Grid Monitoring and Renewables Integration 5 Synchrophasor Measurement Installation 25 25

Synchrophasor Measurement Installation NSTAR is sub-recipient to ISO New England US DOE Smart Grid Investment Grant. Install Phasor Measurement Units (PMU) in four substations The project is an essential part of ISO New England's plans for infrastructure development based on the expansion of its PMU-based disturbance detection and monitoring system R&D project to provide real-time data to ISO NE every 1/60th of a second, rather than once every 10 seconds 26