Utilities and Big Data: Accelerating the Drive to Value July 22, 2013 Last year’s title: Big Data, Bigger Opportunities: Plans and Preparedness for the Data Deluge

Contents Introduction 3 Methodology 4 Executive Summary 5 Findings 6 Our Take 18 Contents

Introduction Oracle’s “Utilities and Big Data” study is the second annual in a series examining how North American electrical utilities are using increasing volumes of smart grid data. The 2013 “Utilities and Big Data” study picks up where the 2012 “Big Data: Bigger Opportunities” study left off: examining how utilities are using data to improve operations and the customer experience. Today, more utilities say they are completely prepared to deal with the big data influx, but most still grapple to manage, analyze and fully leverage the information. The “Utilities and Big Data” study explores: Preparedness to handle the big data influx How data is being used to improve operations and customer service Future short- and long-term plans to use smart grid data The potential of cloud-based solutions for data management and analysis Where utilities will derive the greatest value from predictive analytics The resulting report is based on the views of more than 150 North American senior-level electrical utility executives surveyed by Oracle.

Current Smart Meter Status Methodology Oracle conducted telephone interviews with 151 North American senior-level electrical utility executives in April and May 2013. The sample consists of 136 U.S. and 15 Canadian responses1 Current Smart Meter Status 29% Completed a pilot program 24% Completed a partial rollout 47% Completed a full rollout to all customers/service points 1This report has a margin of error of ±7.95% at a 95% confidence level (NOT for external distribution) 2013 Survey: Utility Size by Number of End-User Metered Customers 15% Fewer than 100,000 customers 43% 100,000 to 499,999 customers 15% 500,000 to 999,999 customers 27% One million customers or more 2012 report smart meter status question: Has your utility implemented at least one smart metering pilot program? Yes No (terminate) Unsure (terminate)  

Executive Summary The Good News: The Opportunity: Utilities are making some progress in preparing for the smart grid data influx. More utilities say they are completely prepared this year compared to one year ago. Utilities are accessing valuable data from a variety of sources in addition to smart meters, including outage management systems, supervisory control and data acquisition (SCADA) history and customer data and feedback. The Opportunity: While utilities are using more data today, significant opportunity remains to harness data to improve grid performance and customer service. Less than half of utilities are using smart grid data to improve customer service today. Predictive analytics can help utilities boost the bottom line. Seventy percent of utilities said they expect predictive analytics to improve revenue protection, and 61 percent said they expect it to reduce asset maintenance costs. Most utilities lack sufficient data analytics expertise. Recruiting, training, and third-party solutions can help close the skills gap. More than 80 percent of utilities see potential benefits in cloud-based solutions. More than a quarter (26%) of utilities are either planning, implementing or maintaining cloud-based solutions for data management and analysis. Another 38% are in the initial discovery phase. More than 80 percent of utilities see potential benefits in cloud-based solutions: This statistic comes from the question, “What do you see as the most significant benefits to implementing a cloud-based solution for managing smart grid/smart meter data?”  More than 80% of respondents indicated they saw some benefit to cloud-based solutions.  The other two stats in the cloud computing bullet point above are from the question, “What is your utility's status regarding cloud-based solutions for smart grid/smart meter data management and analysis?”

Utilities Are Improving, but Underprepared While almost twice as many utilities say they are completely prepared for smart grid data today vs. one year ago, the majority still say they are underprepared. Utilities report slight improvements in information sharing and strategic decision making How would you grade your utility’s preparedness to manage the smart grid/smart meter data influx? Percentage who said completely prepared:1 2012 – 9% 2013 – 17% How effective is your utility in handling the data influx? Percentage doing an excellent job:1 2012 2013 Putting timely information into the hands of people who need it most 8% 20% Making strategic decisions based on the information 4% 11% Make Sure Strategic Decisions are Made on Data UTILITIES T AKE AWAY 1Those who rated their utility a 10 on a scale of 1 to 10, where 1 was very poor and 10 was excellent How would you grade your utility’s preparedness to manage the smart grid/smart meter data influx? Please rank on a scale of 1 to 10, where 1 is not at all prepared and 10 is completely prepared. On a scale of 1-10, where 1 is very poor and 10 is excellent, how would you rate your utility’s effectiveness in handling the data influx in the following areas: [Matrix format with 1-10 and N/A for each] Putting timely information into the hands of people who need it most Translating information into actionable intelligence Reporting on information Making strategic decisions based on the information Delivering useful information to our customers Ensuring storage capacity Securing/safeguarding data Finding/hiring the right talent to help analyze our data Visualizing data (showing data on a spatial map) Note for internal review: After reviewing the data by utility size, we are confident that the year-over-year changes displayed on this slide are not due to the change in sample composition. Results by utility size are as follows: How would you grade your utility’s preparedness to manage the smart grid/ smart meter data influx? Percentage who said completely prepared:1 Less than 100K = 22% 100-499K = 9% 500-999K= 18% 1mil+= 24% How effective is your utility in handling the data influx? Putting timely information into the hands of people who need it most: Less than 100K = 26% 100-499K = 12% 500-999K= 27% 1mil+= 22% Making strategic decisions based on the information: Less than 100K = 13% 100-499K = 6% 500-999K= 14% 1mil+= 12%

Multiple Data Flows Contribute to the Influx 95% of utilities gather valuable data from sources other than smart meters. They have significant potential to harness data to improve grid performance and customer service In addition to smart meters, which of the following data sources provide the most valuable information to your organization?1 64% 58% 54% 12% 11% Outage management systems SCADA2 history Customer data and feedback Alternative energy sources Social media Weather–monitoring systems Wholesale market data Other smart grid points Leverage Data from Reliability and Customer Services Areas of Business TAKE AWAY 1Respondents asked to name their top three additional data sources 2 Supervisory control and data acquisition In addition to smart meters, which of the following data sources provide the most valuable information to your organization? Please select the three most important sources. Other smart grid points such as smart appliances, in-home portals, or electric vehicles Supervisory control and data acquisition (SCADA) history, including advanced sensors, controls, and grid-healing elements Alternative energy sources Outage and distribution management systems Weather-monitoring systems Energy traders/wholesale market data Customer data and feedback Social media There are no other significant data sources Other, please specify: Unsure Full rollout Partial rollout Pilot Outage management systems 68% 61% 60% SCADA history 52% 67% 62% Customer data and feedback  48% 64% 57% Alternative energy sources 15% 17% 5% Social media 16% 6% 10% Weather-monitoring systems 13% 6% 12% Other smart grid points 10% 17% 7% Energy traders/wholesale market data 7% 17% 12% Overall usage stats: Outage management systems = 64% SCADA = 58% Customer data = 54% Alternative energy sources = 12% Social media = 11% Weather-monitoring systems = 11% Other smart grid points = 11% Energy traders / wholesale market data = 11%

Utilities Are Taking Advantage of Data Utilities are using more information today than one year ago.1 Utilities that are not using data from multiple sources can look to their peers for best practices 2 Data Being Used Year-Over-Year Data Shows Wider Adoption, but Additional Improvements are Possible TAKE AWAY 1Year-over-year changes are not statistically significant 2 Power quality data response option was not used in 2012 survey Of the smart grid data your utility collects, which of the following are you actively using to support business processes and decision making? Please select all that apply. Interval data Tamper events Voltage (including high/low voltage alarms) Outage Diagnostic flags Power quality data (including flicker and harmonics) [Other responses from Q2: Other, please specify] Unsure

Employ Data to Drive Greater Customer Value Fewer than half of utilities today use smart grid data to provide alerts or make other direct customer service improvements How are utilities leveraging smart grid data to improve customer service today?1 The average utility has taken just two of these steps. Use Data to Enhance Program Design for Customers to Ensure higher adoption TAKE AWAY 1Respondents asked to select all that apply Which of the following steps, if any, does your utility plan to take in the next five years to leverage smart grid data to improve customer service? For each, please indicate if you have already taken the step, plan to within the next year, plan to in 1-2 years, plan to in 2-3 years, plan to in 3-4 years, plan to in 4-5 years, plan to in more than five years, or if you do not plan to take the step. Use predictive analytics to minimize outages or improve service delivery quality/power reliability Implement demand-response programs Establish new pricing programs (i.e., time variable pricing) Provide customers with information about their usage patterns Alert customers of usage spikes Target customers for new programs (i.e., implementing renewable energy sources) Compare historical data to identify trends and forecast demand Improve compatibility with regulatory requirements Implement and/or improve conservation and efficiency programs

Reliability Improves with Data Analytics Currently, just half of utilities are fully leveraging smart grid data to improve customer service through forecasting, demand management and improved reliability How are utilities leveraging smart grid data to improve customer service today?1 The average utility has taken just two of these steps. Incorporate Predictive Analytics Capabilities in Overall Reporting Strategies TAKE AWAY Which of the following steps, if any, does your utility plan to take in the next five years to leverage smart grid data to improve customer service? For each, please indicate if you have already taken the step, plan to within the next year, plan to in 1-2 years, plan to in 2-3 years, plan to in 3-4 years, plan to in 4-5 years, plan to in more than five years, or if you do not plan to take the step. Use predictive analytics to minimize outages or improve service delivery quality/power reliability Implement demand-response programs Establish new pricing programs (i.e., time variable pricing) Provide customers with information about their usage patterns Alert customers of usage spikes Target customers for new programs (i.e., implementing renewable energy sources) Compare historical data to identify trends and forecast demand Improve compatibility with regulatory requirements Implement and/or improve conservation and efficiency programs 1Respondents asked to select all that apply

Percentage who gave themselves an “A” in the following measures:1 Data Analysis is Key to Operational Transformation Utilities grapple with each step of the data review and reporting cycle, especially extracting data value Percentage who gave themselves an “A” in the following measures:1 No difference since last year = Must Take Data to the Next Level TAKE AWAY !Those who gave themselves a 9 or 10 on a scale of 1 to 10, where 1 was very poor and 10 was excellent On a scale of 1-10, where 1 is very poor and 10 is excellent, how would you rate your utility’s effectiveness in handling the data influx in the following areas: [Matrix format with 1-10 and N/A for each]. Putting timely information into the hands of people who need it most Translating information into actionable intelligence Reporting on information Making strategic decisions based on the information Delivering useful information to our customers Ensuring storage capacity Securing/safeguarding data Finding/hiring the right talent to help analyze our data Visualizing data (showing data on a spatial map)

Percentage who gave themselves an “A” in the following measures:1 Data Analysis is Key to Operational Transformation Utilities grapple with each step of the data review and reporting cycle, especially extracting data value Percentage who gave themselves an “A” in the following measures:1 2 2 Utilities Must Take Their Data to the Next Level with Analytics TAKE AWAY !Those who gave themselves a 9 or 10 on a scale of 1 to 10, where 1 was very poor and 10 was excellent; 2 Did not ask in 2012 On a scale of 1-10, where 1 is very poor and 10 is excellent, how would you rate your utility’s effectiveness in handling the data influx in the following areas: [Matrix format with 1-10 and N/A for each]. Putting timely information into the hands of people who need it most Translating information into actionable intelligence Reporting on information Making strategic decisions based on the information Delivering useful information to our customers Ensuring storage capacity Securing/safeguarding data Finding/hiring the right talent to help analyze our data Visualizing data (showing data on a spatial map)

Necessary Expertise is in Short Supply Fewer than one in three utilities say they have sufficient expertise around smart grid data analytics or data science Do you believe your utility has a skills gap around smart grid data analytics or data science? 62% Yes    31% No 7% Unsure Utilities in all phases of smart meter rollouts are equally likely to have a data analytics skills gap Additionally, 58% of respondents who gave themselves a 9 or 10 in overall preparedness see a skills gap Have an action plan to Train Staff and Supplement Them With Data Analytics Solutions and Services TAKE AWAY Do you believe your utility has a skills gap around smart grid data analytics or data science? Yes No

Skills Gap Requires Internal, External Remedies To address the skills gap, utilities are combining training and hiring with packaged solutions and third parties Those with a gap: Which of the following steps is your utility taking to address this skills gap?1 Those that have closed the gap: Which of the following steps did your utility take to eliminate or avoid this skills gap?1 Training our current employees Hiring/building our internal capability Investing in pre-packaged analytics solutions Outsourcing analytics to a third party Training our current employees Hiring/building our internal capability Investing in pre-packaged analytics solutions Outsourcing analytics to a third party  Close the Skills Gap Through Recruitment, Training and Third-Party Solutions TAKE AWAY 1Respondents asked to select all that apply Which of the following steps is your utility taking to address this skills gap? Please select all that apply. Building our internal capability (i.e., hiring from schools and/or industry) Training our current employees Investing in pre-packaged analytics solutions Outsourcing analytics to a third party (analytics as a service) We are not taking any steps Other, please specify:   Which of the following steps did your organization take to eliminate or avoid this skills gap? Please select all that apply. Built our internal capability (i.e., hired from schools and/or industry) Trained our current employees Invested in pre-packaged analytics solutions Outsourced analytics to a third party (analytics as a service) We did not take any steps

Many See Potential in Cloud-Based Solutions Two out of three utilities are considering cloud-based solutions for smart grid/smart meter data management and analysis Those planning, implementing or maintaining: What do you expect to see as the top benefits of your cloud-based solution?1 #1 #2 #3 #4 #5 What is your utility’s status regarding cloud- based solutions for smart grid/smart meter data management and analysis? 38% Discovery 7% Planning 11% Implementing 8% Maintaining 36% None of the above – we are not currently considering cloud-based solutions Improved speed of service and application deployment (44%) Improved information security (38%) Increased flexibility/scalability to handle peak computing needs on demand (34%) Improved data storage capabilities/capacity (31%) Reduced IT capital expenditure (28%) Guerry needs to edit - Cloud offers the opportunity to collaborate; Leverage the Cloud for Growing Data Management and Analysis Needs TAKE AWAY 1Respondents asked to select all that apply What is your utility’s status regarding cloud-based solutions for smart grid/smart meter data management and analysis? Please select one. Discovery – we are learning about cloud-based solutions and how they can work for our utility Planning – we are preparing a business case and/or strategic plan for cloud-based solutions Implementing – we are currently in the process of adopting at least one cloud-based solution Maintaining – we have fully implemented at least one cloud-based solution None of the above – we are not currently considering cloud-based solutions Unsure What do you see as the most significant benefits to implementing a cloud-based solution for managing smart grid/smart meter data? Please select up to three benefits. Reduced IT operating expenses Reduced IT capital requirements Improved speed of service and application deployment Automatic software upgrades “Anywhere access” to documents and applications Improved information security Improved data storage capabilities/capacity Flexibility/scalability to handle peak computing needs on demand Do not see any benefits Other, please specify:

Predictive Analytics Can Boost the Bottom Line Utilities expect smart grid rollout and the corresponding implementation of predictive analytics to improve revenue protection and reduce asset maintenance costs In what utility processes do you expect to achieve the greatest value from predictive analytics?1 Improving revenue protection Reducing asset maintenance costs Reducing asset replacement costs Reducing infrastructure costs Analyzing distributed generation Reducing generation planning costs Reducing generation operations costs Assessing electric vehicle impact 70% 61% 57% 54% 50% 41% 39% 26% You now have the ability to see into the future are you structured to be a data- driven buisness?Improve Operations, Investment Planning with Predictive Analytics TAKE AWAY 1Respondents asked to select all that apply With the expected growth in predictive analytics associated with combined mash-ups of meter, SCADA, field sensors (i.e., dissolved gas analysis, line monitors, fault indicators), network connectivity, operations/reliability, weather, and economic data; in what utility processes do you expect to achieve the greatest value from predictive analytics?  Please select all that apply. Asset risk analysis – reducing asset maintenance costs Asset risk analysis – reducing asset replacement costs Asset risk analysis – improving asset performance and reliability Spatial load and renewables forecasting for transmission & distribution network planning – reducing capital infrastructure costs Long-range forecasting for generation planning – reducing generation planning costs Short-term forecasting for generation operations – reducing generation operations costs Distributed generation impact analysis Electric vehicle impact on load and infrastructure

Positive ROI Anticipated from Analytics More than half expect positive ROI within five years. Still, 22 percent are unsure. How long do you think it will take your utility to realize a positive return on its smart grid analytics investment? Re-examine analytics efforts to drive value quickly TAKE AWAY Given the benefits associated with smart metering and smart grid analytics, how long do you think it will take your utility to realize a positive return on investment? Within the year 1-3 years 3-5 years 5-10 years More than 10 years Unsure

Utilities Plot Short- and Long-Term Gains Smart grid infrastructure and data will enable more reliable energy, more intelligent usage information and custom pricing programs The average utility with more than one million customers will invest approximately $180 million in the smart grid and smart metering over the next five years Short Term: Utilities’ top three smart grid data plans for the next 1-2 years: Long Term: Utilities’ top three smart gird data plans for the next 3+ years: #1 #2 #3 Compare historical data to identify trends and forecast demand Provide customers with information about their usage patterns Use predictive analytics to minimize outages or improve service delivery and reliability #1 #2 #3 Alert customers of usage spikes Establish new pricing programs (e.g., time variable pricing) Use predictive analytics to minimize outages or improve service delivery and reliability Use Data Analytics to Better Manage Distribution Networks Stretched by Demand TAKE AWAY Which of the following steps, if any, does your utility plan to take in the next five years to leverage smart grid data to improve customer service? For each, please indicate if you have already taken the step, plan to within the next year, plan to in 1-2 years, plan to in 2-3 years, plan to in 3-4 years, plan to in 4-5 years, plan to in more than five years, or if you do not plan to take the step. Use predictive analytics to minimize outages or improve service delivery quality/power reliability Implement demand-response programs Establish new pricing programs (i.e., time variable pricing) Provide customers with information about their usage patterns Alert customers of usage spikes Target customers for new programs (i.e., implementing renewable energy sources) Compare historical data to identify trends and forecast demand Improve compatibility with regulatory requirements Implement and/or improve conservation and efficiency programs

Our Take … We’re Not Done with Smart Grid Yet: Most utilities still are not using their data as efficiently as possible. Make strategic plans and get on board. The time is now. Enhance Customer Value through Data: Utilities should expand efforts to use smart meter and smart grid data to improve customer service and the customer experience. They should seize opportunities to make direct improvements today and, to build lasting relationships, ask customers what information would be helpful in the future Use Data in Combination: Utilities are collecting data from multiple sources. Using that data in combination will deliver greater opportunities to improve smart grid performance and customer service Leverage the Right Talent: Fewer than one in three utilities have sufficient expertise in smart grid data or general data science today. A three-pronged approach will help close the gap: recruitment, training and third-party solutions Consider the Cloud: Cloud-based solutions can improve the speed, security, and scalability of data management systems. As data volumes grow, so will the need for cloud-based solutions for data management and analysis

For media inquiries, please contact: Caroline Vespi Oracle caroline.vespi@oracle.com 650-506-8920 Gail Repsher Emery O’Keeffe & Company gemery@okco.com 301-789-5340