R GreenChoice Marketing Green Power to Key Accounts Mark Kapner October 25, 2005 TM

R Austin Energy  Municipally-owned electric utility  Serves more than 700,000 population  Area > 400 sq. miles H Austin

R Customers  26% of energy sold to residential  70% to commercial  4% to municipal

R Generating Sources  3 gas and oil-fired plants1670 MW  1 coal-fired plant 570 MW  1 nuclear plant 400 MW  Purchase 212 MW of wind  Purchase 11 MW landfill methane power  Purchase 1 MW of Hydro

R Conventional Generation Mix by MWH  Coal 35%  Nuclear 30%  Gas/Oil 30%

R GreenChoice Background  Austin’s Strategic Goal: 20% of energy from renewables by 2020  By enrolling, customer causes change in AE’s generation mix  Customer benefits from the price stability inherent in renewable energy  GreenChoice price linked to actual cost of renewable energy TM

R GreenChoice Renewable Sources  Wind 79%  Landfill methane (17 % of MWH)  Photovoltaics and Hydro (4% 0f MWH) TM

R Wind Pros and Cons  Least expensive  (per kWh)  Little firm capacity  Transmission adequacy risk  Public acceptance- fairly high

R Landfill Methane Pros and Cons  40% more expensive than wind energy  Very high firm capacity  Public acceptance- moderate

R Solar Photovoltaics  Most expensive (about 7 times cost of wind)  Fairly high firm capacity  Public acceptance - extremely high

R How GreenChoice Works  All customers eligible  Commercial customers contract for min 5 years  Subscribers pay a fixed GreenChoice charge in place of a fuel charge that fluctuates depending on market prices of coal and gas; price lock for as long as 10 years  Green Choice charge = 3.5 cents per kWh  Fuel Charge is currently 2.8 cents per kWh  Commercial customers receive recognition proportional to level of participation TM

R Austin Energy Electric Bill  Base Rate 6.44 cents x kWh  plus Fuel charge = $0.028 x kWh  or  GreenChoice charge = $0.035 x kWh

R Promotion and Marketing  Stories in utility bill inserts  Ads in local newspapers  Billboards  Customized presentations to businesses  Speaking engagements  Letter from environmental groups to their mailing list  TV commercials

R Austin Energy’s Key Accounts  High Tech, Data Centers and Gov’t  Semiconductor  Commercial Real Estate  Schools, Hotels and Hospitals  Grocery and Restaurants  Communications, Light Industrial, Mfg, Residential Hi Rise

R Corporate Champions (use > 700,000 kWh per year) 3M Corporation 823 Congress Advanced Micro Devices (AMD) Ambion, Inc. Apple Computer BAE Systems BLOCKBUSTER Fisher-Rosemount Systems Four Seasons Hotel Austin G S D & M Ginny's + Merit Graeber, Simmons & Cowan Greenwood Towers Habitat Suites Hotel Heart Hospital of Austin Hyatt Regency Austin IBM Iron Cactus Kinko's La Quinta Inn & Suites LBJS Broadcasting Company Live Oak Development Maudie's Cafe Pier 1 Imports Samsung Austin Semiconductor Solectron Texas State Farm Insurance Texas Commission on Environmental Quality Texas Governor's Mansion The Rebekah Baines Johnson Center Tokyo Electron America

R Corporate Champion Ad Package  TV ad – features company logo  Billboards  List names twice per year in three newspapers  Company logo in EnergyPlus customer newsletter  GreenChoice logo available for company’s use in its advertising

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R Status (as of Oct 1, 2005)  GreenChoice launched mid-Jan 2000  Began billing April 2001  Over 6,500 residential customers enrolled  30 large commercial subscribers  170 small businesses  Green Energy = 300 million kWh/yr.