Tim Roughan, Director of Distributed Resources National Town Meeting on Demand Response and Smart Grid July 14, 2009 National Grids Smart Grid Efforts

2 Confidential Agenda SMART Program Objectives SMART Program Status Massachusetts Pilot New York Pilot Dept. of Energy ARRA Near Term Objectives & Challenges Proof Concept work Customer Experience Question & Answer

3 Confidential National Grid SMART Grid Program Objectives Be able to incorporate significant increases in Distributed and Renewable Generation Confirm Benefit Expectations for Customers and Society Improve Energy Conservation through Technology Improve Grid Efficiency through Monitoring and Control Improve Grid Reliability and Expedite Outage Recovery Improve Customer Satisfaction Create an Interoperable Foundation for Legacy-Today-Future

4 Confidential SMART Grid needs to be able accommodate large amounts of DG This represents 30 MWs of new DG since NGrid currently has 25 MWs of PV and 25 MWs of wind in the interconnection process for connection to 13 kV distribution.

5 Confidential SMART Grid Status National Grid has made filings in Massachusetts and New York Massachusetts is $57m New York is $270m Rhode Island will be filed shortly A partnership with state regulators is vital to successfully compete for DOE funds. Scope for the States is anticipated to be similar Common Smart Grid Spine and Clean Energy Modules Customers will have the opportunity to participate in advanced tariffs and services that will reduce costs and energy use National Grid intends to create Flagship projects in key cities also known as Pilots

6 Confidential Massachusetts Overview Docket # filed April 1 st 2009 Response to MA Green Communities Act 15,000 electric only customers in Worcester $57M cost – Spine only Extensive media coverage Discovery process began on May 22 Public Hearing and Procedure on-going Scope may expand as a result of ARRA matching funds– options include Use ARRA to help fund base pilot in Worcester Expand pilot in Worcester Undertake another pilot elsewhere in MA Worcester

7 Confidential New York Overview Case #09-E-310 filed April 17, 2009 Response to NY PSC request for utility filings to support ARRA application 80,000 gas and electric customers – 40,000 in Syracuse and 40,000 in Capital District $270M total cost Met with NYPSC Staff to facilitate Commission action on July 16 before August 6th ARRA submission Expedited Discovery Process and updated information on-going Syracuse Capital District

8 Confidential Near Term Smart Grid Objectives and Challenges Obtain funding for Pilot Deployments o Manage Regulatory Process in MA, NY and RI o Develop ARRA Stimulus Funding Process to DOE o Manage DOE funding process Conduct a Proof of Concept to Validate Conceptual Design and Inform the Procurement and Vendor Selection Design an End to End Smart Grid Solution (Business Processes, Information Technology and Customer Experience) to enable: oInnovative tariffs and programs that provide Choice, Control and Convenience to customers; oChanges in customer behavior that result in Min. 5% reduction in Peak Demand and 5% reduction in Total Consumption; oImproved Grid monitoring and control that will accommodate significant penetration of Distributed Energy Resources (Solar, Wind, Storage, PHEV) on Grid to lower system losses, improve reliability, improve power quality and lower operating costs. Mobilize a deployment team to begin implementing the solution upon approval of funding from the PoC to the Pilot(s) to Volume Deployment(s)

9 Confidential Proof of Concept Goals and Objectives Test key business events and processes on the anticipated solution architecture Establish multiple PoC solution sets to prove technology viability National Grid - Smart Technology Centre (STC) in Liverpool, NY Phase1: Stand up and Test solutions to inform the selection process of pilot vendor partnerships Phase 2: Center of Excellence: Evaluation, Demonstration, Innovation, Training Current Phase Focus on Spine Communications Information Systems Home Devices Grid Devices PoC will develop into Demonstration and Training facility

10 Confidential Customer Experience Goals and Objectives Educate pilot customers and other key external stakeholders on The concept of Smart Grid How it can be beneficial to them and the environment What options they have for pricing / tariffs What options they have for Smart technology inside their homes and businesses Work with regulatory stakeholders to manage the process of customers control groups Track customer behavior over the course of the pilot(s) and course correct as necessary

11 Confidential Customer Experience Approach / Key Activities A comprehensive marketing plan for Smart pilot customers with the following key objectives Create awareness of the Pilot and the information and options it provides. Educate customers about the benefits, to them and to society, of a Smart Grid. Encourage customers to take advantage of the new information and capabilities offered by the Smart Grid. Motivate customers to permanently change their energy usage behavior. Inspire customers to become advocates of energy usage modification. The plan will be primarily for the Spine of the project The plan will be applicable for MA, NY and other jurisdictions

12 Confidential Questions? Tim Roughan Director of Distributed Resources