Load Response Products from Constellation NewEnergy Constellation NewEnergy – New England Office 800 Boylston St., 28th Floor Boston, MA 02199 (617) 772-7500 NewEnergy_ETS@constellation.com Call Amy Richard 617-717-7951 with questions

How Load Response Works Baseline $ $ MW Actual $ $ $ Our “internet-based communications system” (described later in the presentation) will estimate your baseline at all times so you will be able to see what you have to get down to. For the Demand Response program, you’ll figure out an amount you can reduce, and you’ll make sure during any emergency that you reduce that much against your baseline. Hour Baseline load shape predominantly determined from 10 prior business days Baseline adjusted (upward or zero) 2 hours before event to match actual usage conditions Curtailment is Baseline minus Actual usage Paid greater of floor price or market price for curtailed energy

Constellation NewEnergy and Load Response New England’s Load Response Program is run by the Independent System Operator-New England (ISO-NE)  ISO-NE: Organization responsible for operating and maintaining reliability of the New England power gird CNE has been a certified ISO New England Enrolling Participant since the inception of the Load Response program CNE has enlisted an extensive clientele ranging in curtailment size and type of participation. Including: Customers with load response ranging from 100 kW to 30 MW Customers who have enlisted load curtailment or emergency generation resources

Benefits of Participating in Load Response Energy cost reduction Earn regular payments for participation May reduce future supply prices by controlling usage patterns No charges for supply or distribution of energy curtailed Energy Information Real-time meter and price information system installation allows you to view up-to-minute energy usage and costs Compelling social benefits Prevent regional blackouts and brownouts Put downward pressure on prices- control “hockey stick” Environmental benefits gained by avoiding use of last-resort generators More about the energy information system later in the presentation.

Benefits of Participating in Load Response Real-life Examples of Load Response Benefits During the Emergency Event called August 2, 2006, curtailment reduced grid demand by 500 MW.  This is equivalent to an entire natural gas power plant that did not have to come online during period of peak prices ISO study found that if New England reduced peak demand by 5%, ratepayers could save almost $500 million/year.* * Peters, Mark. “Conservation Pays.” The Hartford Courant 14 January 2007, natl ed.: D1-D2.

2006/2007 Demand Response Earn substantial monthly payments for ability to curtail during ISO emergencies Backup generation or load reduction Calls occur during ISO-NE’s emergency OP-4 Procedure Only 3 of these emergencies have occurred since 2002 2-hour or 30-minute advance notice of curtailment call Monthly capacity payments according to avg. kW reduction (less administration fees): $3.05/kW-month, December 2006 to May 2008 $3.75/kW-month, June 2008 to May 2009 $4.10/kW-month, June 2009 to May 2010 Payments for energy during mandatory curtailments (less administration fees): Greater of real-time market price or $350/MWh for 2-hour notice Greater of real-time market price or $500/MWh for 30-minute notice This is the Demand Response program, the emergency one.

Demand Response Rules for Participation Calls can occur between 7 a.m. and 6 p.m. weekdays (non-holidays) Customer estimates how many kW can be reduced during an emergency Constellation can offer assistance with this determination During an emergency event, customer must achieve reduction of kW offered for at least 5 min during event, or future capacity payments are reduced to actual performance Reductions should occur within 30 minutes or 2 hours of call If there has not been any emergency by August 15 of any given year, there will be an “audit” event sometime between August 15 and August 30 You are under no obligation to curtail after 6 PM, though you will be paid for the energy if you do.

Example Customer Savings in Demand Response Savings per year for 500 kW of Curtailment 2-hr Demand Response Capacity Payment per year $18,300 Energy Price for Curtailed Energy x 3 hrs x 1 day per year (at $350/MWh floor) $525 Less CNE Admin. Fee (25%) -$4,706 Energy costs saved (at 10¢/kWh cost) $150 Net position per year $14,269

Expected Payments for Demand Response Demand Response participants will receive estimated annual payments according to the table below: Size (kW) 100 250 500 750 1000+ Capacity Payment $ 3,660 $ 9,150 $ 18,300 $ 27,450 $ 36,600 Energy Payment $ 105 $ 263 $ 525 $ 788 $ 1,050 Less CNE Admin Fee* $ (1,883) $ (2,824) $ (4,706) $ (5,648) $ (6,589) Energy Savings $ 30 $ 75 $ 150 $ 225 $ 300 Total Annual Payment $ 1,913 $ 6,664 $ 14,296 $ 22,815 $ 31,361 *CNE Admin Fee based on sliding percentage scale: 100-249 kW= 50%; 250-499 kW= 30%; 500-749 kW= 25%; 750-999 kW= 20%; 1000+ kW= 17.5%

Notification of Demand Response Events Unlimited contacts can be listed Automated voice calls to phone numbers Text messages to pagers or cell phones Emails

Internet-Based Communication System (IBCS) Installation is necessary for participation Log in via the Internet Receive info up to the latest 5 minutes: Your current power use Baseline usage Market prices See Load Response earnings right away Plus historical data for your analysis Data sent to the ISO-NE in real-time Used for grid management as well as settlements of payments

IBCS Installation Choices OPTION 1: Between utility meter and company’s Ethernet This is the best and most cost-effective solution OPTION 2: Between utility meter and wireless satellite This configuration does not require a connection to the customer’s server Requires strong Verizon wireless signal OPTION 3: Between utility meter and dedicated phone line with dial-up Internet account We can maintain the internet service provider account

What’s needed for an Installation A “KYZ Pulse output” from electric meter Most utility interval meters have this If customer does not have this, must be installed by utility Extra cost of approximately $300 Must be located within 10 ft. of IBCS installation 110 V, 3-prong power outlet Within 8 ft. of installation Data jack Ethernet (RJ-45) jack within 10 ft. If dial-up, phone (RJ-11) jack within 10 ft. Not necessary for wireless installation OR, if a customer already has real-time data being collected, we can send this data directly to the ISO

What’s Needed for Network Connection For Ethernet DHCP Server IP Address & subnet SMTP server For Wireless Verizon wireless network reception For Dial-Up ISP dial-up number and account Account maintained by customer or CNE