Aggregating Small Loads to provide Ancillary Services   Our system is under dual control - the consumer is able to better control and understand his own use of electric power and, concurrently, may grant the serving utility as much control as he wishes (and change it as often as he wishes) to help the utility deal with peak generation or distribution events, outages, or an economic event in which the spot market price of power is much higher than the contracted  price at which the utility purchases power. © CONSERT INC.

21,000 MW of Residential Summer Peak Load Residential Load is Almost Half of ERCOT Total Load at Peak. 21,000 MW of Residential Summer Peak Load 11  Source: ERCOT 2010 State of the Market Report © CONSERT INC.

Average kW Use/HVAC Unit Aggregating Residential Load Controls Significant Demand During Peak Periods. Mean: 2.99 kW Std Dev: 1.99 kW No. HVAC Hourly Reads Average kW Use/HVAC Unit Avg. kW Time of Day (PM) Based on HVAC units at 397 homes monitored across three TX utilities from 3PM to 7PM, June through September 2011. © CONSERT INC.

Next Generation DR Controls Over Half of the Load at the Home. 3.06 Mean kW/Gateway 11  No. of Hourly Gateway Reads Based on 397 Consert gateways located within three TX utilities from 3PM to 7PM, June through September 2011. Chart data is average hourly kW © CONSERT INC.

THE VIRTUAL PEAK PLANT™ PROCESS. 1. Load Management/Measurement Devices Are Installed Communicating meter with Consert gateway Load control device for water heater, EV, and other loads Thermostat for HVAC control 4. Data Center Built on IBM software platforms, including DB2, WebSphere and WebSphereMQ. Pass data in HHF format. 3. Public Wireless Network 3G & 4G wireless technology provides real-time communication between consumers and utilities. 5. 2. Consert’s Virtual Peak Plant Allows the utility to monitor, measure, and control disaggregated loads over a real-time, standards-based IP network. Consumers create energy use profiles Program, monitor and adjust household usage through web portal. SMART HOME © CONSERT INC.

CUSTOMER FOCUSED SOLUTION. Up to 20% Savings on energy efficiency Work within boundaries defined by the customer Opt out at any time Free Home Energy Management System Anytime, anywhere access © CONSERT INC.

MEASUREMENT & DEVICE CONTROL INSTALL MEASUREMENT AND DEVICE CONTROL. For Next Generation DR POOL PUMP With the Consert solution 40% to 60% of residential home energy consumption is under control and manageable. SMART HOME MEASUREMENT & DEVICE CONTROL Consert gives utilities and consumers a simple and reliable way to reduce energy consumption – mostly by eliminating loads that would have been otherwise wasted through traditional means. By simply being able to manage their own personal usage, a typical residence equipped with Consert’s Home Area Network will lower its energy usage 15-20%, while an average business will save 8% or more. Multiplied by hundreds or thousands of consumers, the result is actionable load resources for the participating utility. Installed capital expenditure on a per kilowatt basis is very competitive with traditional supply-side options. Plus, Consert enables utilities to implement time-of-use or other alternative pricing programs, as well as track and monetize load reductions as renewable energy and carbon credits, producing potential future revenue streams. Among the ways Consert allows utilities to significantly reduce operating costs is by performing AMI/AMR functions more efficiently, handling outage and tamper detection, reducing line loss and managing advanced demand management events. WATER HEATER HVAC © CONSERT INC.

INSTALL A SMART METER WITH THE CONSERT GATEWAY Smart Energy Gateway Zigbee enabled for HAN communications 3G or 4G modem for cellular public network communications Leverage legacy meter MV90 file for billing Sends 15 minute use data to utility in near real time © CONSERT INC.

INSTALL A SMART ZIGBEE ENABLED THERMOSTAT. Programmable thermostat controls the HVAC per home owner’s preferred profile and monitors HVAC energy usage in real time The thermostat communicates with the Consert gateway over the standardized Zigbee home area network (HAN) Home owners would set up their profiles and strategies Home owners can opt out at any time © CONSERT INC.

CUSTOMERS and Next Generation DR with Consert. “I like the way the whole program operates.” Data Source: High-Level Process Evaluation for DM Pilot Project Post Summer Curtailment Participant Study Results LCRA and Bluebonnet Electric Cooperative | October 2011 © CONSERT INC.

CUSTOMERS and Next Generation DR with Consert. “I feel like I want to proactively save money and save energy.” Data Source: High-Level Process Evaluation for DM Pilot Project Post Summer Curtailment Participant Study Results LCRA and Bluebonnet Electric Cooperative | October 2011 © CONSERT INC.

CUSTOMERS and Next Generation DR with Consert. “I’m able to better manage the temperature.” Data Source: High-Level Process Evaluation for DM Pilot Project Post Summer Curtailment Participant Study Results LCRA and Bluebonnet Electric Cooperative | October 2011 © CONSERT INC.

CUSTOMERS and Next Generation DR with Consert. Data Source: High-Level Process Evaluation for DM Pilot Project Post Summer Curtailment Participant Study Results LCRA and Bluebonnet Electric Cooperative | October 2011 © CONSERT INC.

“ “ Utility Has Complete Control of the CLR unit. Utilities have access to load management, and can see real-time power availability at any time. 11  Utility Control Center © CONSERT INC.

Aggregated Residential DR is a Reliable Load Resource. Pct. of Target Load Facts Event Participants Outside Temp Date 60% 75 102 8/3/11 80% 205 8/4/11 100% 64 100 6/14/11 Event Duration (in 5 min. increments) © CONSERT INC.

Most Customers Choose Not to Opt Out. Event Details Participants 205 Date 8/4/11 © CONSERT INC.

Current Efforts in ERCOT Scope of Pilots and POCs LCRA Bluebonnet Electric Cooperative: peak at ~212 meters/participants; 569 kW peak Power Available ICCP Telemetry 10 Second Device Data Pedernales Electric Cooperative: ~100 meters/participants; 276kW peak Power Available Grayson-Collin Electric Cooperative: under way with 200 installs planned CPS Energy Pilot: 89 meters/participants; 164 kW peak Power Available 2010 – 2011 Early Commercial Deployment: 500 installations ~1 MW peak power Full Deployment: 140,000 meters/participants; 250 MW peak Power Available Implementing ICCP Telemetry   Our system is under dual control - the consumer is able to better control and understand his own use of electric power and, concurrently, may grant the serving utility as much control as he wishes (and change it as often as he wishes) to help the utility deal with peak generation or distribution events, outages, or an economic event in which the spot market price of power is much higher than the contracted  price at which the utility purchases power. © CONSERT INC.

Current Efforts in ERCOT Proposed Uses for Consert Technology with MPs Reduced kWh consumption / energy efficiency of 10% - 20% Reduced 4 CP and TCOS Real Time MCP events for negative load/wholesale energy Load Resources Pre-POC/CLR: EILS Post-POC/CLR: Non-Spin, Responsive Reserve, and eventually Regulation   Our system is under dual control - the consumer is able to better control and understand his own use of electric power and, concurrently, may grant the serving utility as much control as he wishes (and change it as often as he wishes) to help the utility deal with peak generation or distribution events, outages, or an economic event in which the spot market price of power is much higher than the contracted  price at which the utility purchases power. © CONSERT INC.

Aggregated Load as a CLR Premise Consert believes it can provide value added Load Management Services into the ERCOT market by aggregating residential and small commercial load, and providing the load resource telemetry to ERCOT Consert is looking to get approved under the CURRENT Nodal Controllable Load Resource (CLR) Protocol and Operating Guidelines Consert plans to run a Proof of Concept (POC) with ERCOT emulating a CLR test plan History Consert has numerous pilots underway with ERCOT Munis/Coops for 6+ months Consert has been working with ERCOT to determine a path forward and any showstopper issues in order to perform a CLR POC Test Consert recognizes that potential future ERCOT protocol changes could optimize the tool’s use in the ERCOT market, but for now no ERCOT PRRs are planned   Our system is under dual control - the consumer is able to better control and understand his own use of electric power and, concurrently, may grant the serving utility as much control as he wishes (and change it as often as he wishes) to help the utility deal with peak generation or distribution events, outages, or an economic event in which the spot market price of power is much higher than the contracted  price at which the utility purchases power. © CONSERT INC.

Aggregated Load as a CLR In discussions with ERCOT staff, the following are baseline criteria for the Consert solution in the ERCOT Controllable Load Resource (CLR) market as defined by ERCOT protocols No Under Frequency Relay (UFR) is required Resource will have primary frequency response capability that automatically responds to frequency changes similar to a generator governor Aggregation of Load must be at a transmission physical load point as defined in the ERCOT network model Aggregated load must be modeled to 1, and only 1, transmission physical load point No resource rollover would be possible for Consert solution at this time due to network model limitations Aggregated load must be at least 100kW to offer into the ERCOT Ancillary Service CLR markets and qualify under the Nodal CLR test plan Aggregated load must follow ICCP operating guidelines and performance criteria Aggregated load must be base lined for M&V analysis and settlements   Our system is under dual control - the consumer is able to better control and understand his own use of electric power and, concurrently, may grant the serving utility as much control as he wishes (and change it as often as he wishes) to help the utility deal with peak generation or distribution events, outages, or an economic event in which the spot market price of power is much higher than the contracted  price at which the utility purchases power. © CONSERT INC.

Topics to Address Registration (RARF) AS Markets under consideration Day Ahead and Real Time (MMS, COPs, LFC, EMS) Telemetry (ICCP) Primary Frequency Response Measurement and Verification Other Considerations   Our system is under dual control - the consumer is able to better control and understand his own use of electric power and, concurrently, may grant the serving utility as much control as he wishes (and change it as often as he wishes) to help the utility deal with peak generation or distribution events, outages, or an economic event in which the spot market price of power is much higher than the contracted  price at which the utility purchases power. © CONSERT INC.

Summary Consert currently plans to conduct its Proof of Concept with ERCOT and MPs in late 2011 / early 2012 Data from POC will be provided to ERCOT for independent evaluation ERCOT has committed in providing recommendations for improvements in the ERCOT markets ERCOT has committed in updated processes and procedures for small load resources Again, we are not planning to submit any changes to the ERCOT protocols or operating guides at this time   Our system is under dual control - the consumer is able to better control and understand his own use of electric power and, concurrently, may grant the serving utility as much control as he wishes (and change it as often as he wishes) to help the utility deal with peak generation or distribution events, outages, or an economic event in which the spot market price of power is much higher than the contracted  price at which the utility purchases power. © CONSERT INC.

Discussion Challenges/Barriers Next Steps and Action Items   Our system is under dual control - the consumer is able to better control and understand his own use of electric power and, concurrently, may grant the serving utility as much control as he wishes (and change it as often as he wishes) to help the utility deal with peak generation or distribution events, outages, or an economic event in which the spot market price of power is much higher than the contracted  price at which the utility purchases power. © CONSERT INC.