Impact of Dynamic Pricing on AMR   Impact of Dynamic Pricing on AMR Patti Harper-Slaboszewicz Director AMR and Demand Response UtiliPoint® International, Inc. Patti Harper-Slaboszewicz UtiliPoint International 505-797-5475                                                                

Why the increased interest in Dynamic Rates? Restructuring of the wholesale market is here to stay Regulators report transmission congestion and high wholesale prices as significant concerns

Regulator Assessment of Congestion and Peaking Generation Bottom three are fully within the scope of state regulation.

Source: CEC_2002_2012_Electricity_Outlook_Report_Committee_Rpt Needle peak reduction Reduces needle peak occurring less than 100 hours per year Fewer peaking plants needed Less transmission congestion Source: CEC_2002_2012_Electricity_Outlook_Report_Committee_Rpt

Additional reasons for interest in Dynamic Rates All customer classes respond to dynamic rates by reducing % of energy used during critical peak periods. Customers appear to like dynamic rates

Residential participants responded across the board Source: Demand Response Research Center drrc_presentation SPP Results pp 24, based on State-wide Pricing Pilot, Summer 2003 Impact Analysis, CRA, Aug 2004

Small and medium commercial customers also responded Source: Demand Response Research Center drrc_presentation SPP Results pp 25, based on State-wide Pricing Pilot, Update of Results, CRA, Jan 2005

Residential participants in California statewide pilot preferred pilot rates

Commercial participants in California statewide pilot preferred pilot rates

Regulators reported investment in AMI and DR is higher priority than additional generation

Regulators in North America highly engaged in evaluating demand response

60% reported that these rates are very important or important Regulators are, in particular, supportive of time-of-use or dynamic rates 60% reported that these rates are very important or important

This is an incredible change from several years ago. Regulators are supportive of time-of-use or dynamic rates for residential customers This is an incredible change from several years ago.

What features are regulators looking for in AMR? Most regulators would like to see the AMR system provide critical peak period kWh.

How will this impact the AMI market? Most regulators are not now planning to follow the Ontario model.

Utilities specifying hourly data and/or critical peak data required What % of utilities expect AMR system to deliver information to bill critical peak pricing? Utilities specifying hourly data and/or critical peak data required

IOUs specifying hourly data and/or critical peak data required What % of IOUs expect AMR system to deliver information to bill critical peak pricing? IOUs specifying hourly data and/or critical peak data required

How many utilities expect to implement dynamic or TOU rates? North American Utilities

North American Utilities Installed AMR systems incompatible with future dynamic or TOU rate plans for many utilities North American Utilities

Many utilities are currently testing AMI

How many customer meters should be equipped with AMI?

Impact on AMR data management market

Summary Regulator interest in dynamic pricing is becoming a strong driver for investment in AMR Regulators must provide cost recovery for AMR supporting dynamic pricing since ratepayers receive many of the benefits

Thank you Any questions? Patti Harper-Slaboszewicz UtiliPoint International 505-797-5475