1 Demand Response Update April, 2011

2 Strategic Perspective Demand Response  Aligns with PGE’s Strategic Direction; helping to provide exceptional customer service, promote economic growth, and exhibit corporate responsibility.  Provides an alternative to peak capacity generation construction and associated transmission needs and environmental impacts.  Enhances the value of the Smart Grid and Smart Meter interval data provided to customers by empowering a response to market based rates [1][1] PGE, NewsLine, July 2010, 3 Questions featuring Jim Lobdell “I think a lot about the lack of electrical capacity in the region. In other words, about how we can be sure to meet the peak energy needs of our customers.” Jim Lobdell, VP Power Operations and Resource Strategy [1]

3 Strategic Alignment and Benefits

4 Example: No New SCCT Demand Response is needed in PGE’s forecasted 2015 resource stack. Generation Resources based on 2015 capacities, as stated in the Existing Resources section of the 2009 IRP. 100 MW of Short- and Mid-Term Market purchases based on 2009 IRP estimates for 2015 (p. 322). DSG follows with 120 MW, dispatching when the theoretic peak reaches over 3,000 MW. Demand Response is needed during extreme peaks.

5 Example: With Flex SCCT Demand Response is needed even with added generation.

6 Existing Pricing Demand Response  Time of Use – # of Customers 1800 Residential Customers 300 Small Business Direction Smart Meters improved cost effectiveness (no one-off meters or associated meter read) Electric Vehicles are a natural fit –Increased marketing targeting EV purchasers –Program growth based primarily on EV sales projections

7 Existing Direct Load Control  Energy Partner SM– Schedule 77 Pilot 2 Customers 10 MW within 4 hours notice Direction Tighten the participation requirements Grow the program for process driven customers MW cap raised

8 Future Pricing Programs  Critical Peak Pricing Pilot – Flex Rate Program SM # of Customers – 1000 Residential Objectives Test take rate for PGE customers Utilize existing PGE systems to implement a CPP program by Nov., 2011 Measure and evaluate Direction Potential for adding an enabling technology for year 2 of the pilot Possible CPP pricing program after the pilot

9 Future Direct Load Control  Residential Pilot – Water Heater Direct Load Control Salem Smart Grid project area only pilot Customers must be on the test feeders involved with the project Less than 100 Water heaters will respond to radio signal PGE will dispatch the radio signal using a transactive control based on price signals from the Smart Grid project. August of  Automated Demand Response 3 rd party provides PGE a turn-key DR resource 50 MW within 5 years 30+ kW customers Status RFP in 2009 Contracting RFP winner Regulatory approval pending Potential to have 5 MW online in December

10 Limiting Resource Impacts  Web Management – Energy metering web portals, such as the PGE IDES system, will allow customers to access online their interval energy usage data; this data will help them respond to market based pricing in ways that benefit both PGE and the customer.  Corporate Communications – Communications to new customers to grow the participation numbers and to encourage existing customers to try new programs.  TCC – Customer service representatives (CSRs) could require additional call time to promote Demand Response. In addition to call time, CSRs will require training.  Billing – Larger Demand Response programs may request additional billing requirements beyond the basic bill that many customers now receive.  IT – IT resources will be required to automate Demand Response processes.

11 Scheduling  Flowchart 2: Schedule

12 Conclusion  DR meets the needs for the top 80 peaking hours of the year.  DR aids PGE in using resources as cost efficiently as possible.  DR improves customer satisfaction by empowering customers to use their interval data as a tool to control their energy costs.  Technologies (such as the Smart Meter) exist and are emerging that enable the DR component of the Smart Grid.

13  Questions?