GoodCents SELECT Advanced Energy Management Program Gulf Power Company Pensacola, Florida

Program Highlights 7200 Current Participants 96% Customer Satisfaction Rating <4% Churn Rate 2006 Goal – 3000 installations Moving into Multi-Family segment this year

What is GoodCents® SELECT ? GoodCents® SELECT is a residential advanced energy management system that gives customers control over their energy purchases by allowing them to program their central heating and cooling system, electric water heater and their pool pump to automatically respond to varying prices.

Overcoming Pricing Program Hurdles The “full cost” of responding to price changes is much more than the price difference. Customers must act in order to respond. These actions require time and effort. Lowering the incremental “cost” of responding should increase the amount of price response. An in-home, customer-programmed, automated energy management system lowers this “cost” that customers must bear.

Major Components SuperStat Communications Gateway RSVP Rate

Standard Residential Rate 8.0 cents Rate (RSVP) GoodCents SELECT Participation Charge $4.95/Month Standard Residential Rate 8.0 cents/kWh Price Per kWh* LOW 5.9 cents MEDIUM 7.1 cents HIGH 11.7 cents CRITICAL 32.6 cents * All prices are as of 04/01/05, excluding and/or participation charges and any applicable taxes. These prices are subject to change. Price per kWh Critical 32.6 (Limited To 87 Hrs/Yr) $0.20 Standard Residential Rate 8.0 cents $0.10 High 11.7 5.9 7.1

The MainGate® System WAN Architecture VHF Paging Signal Telephone Line Paging Gulf Power Company Telephone Line

Why is GCS good for Gulf ? Innovative Rate Offering (More Choice) Operational Benefits (Peak Shaving and Valley Filling) Customer Satisfaction FPSC/FEECA Rules

GoodCents Select – Program Economics Significant Real-Time Demand Reduction! Over 2 kW per subscriber per critical event  100 event-hours per year is O.K. Event durations of 1 to 3 hours These demand responses are exactly like quickly dispatchable capacity CTs or Hour-Ahead Spot Market Purchases 80 MW of available critical peak demand response will displace the need for an 80 MW bank of CTs or the need for 80 MW of hour ahead capacity purchases

GoodCents Select – Program Economics Load reshaping can be profit preserving Moving consumption from higher to lower priced periods reduces revenues and reduces costs but profits can be preserved Program facilitates the promotion of the most economically efficient electric end-use loads and technologies Off peak end-uses of electricity become relatively more economic – sales can increase

GoodCents Select – Program Evaluation GCS provides other benefits too. Customer Choice Not Utility Control Enhances Customer Satisfaction Reduces Policing Requirements vs. Direct Load Control Produces Reliable Peak Demand Reductions Requires No Utility Paid Incentive Customers Save by Acting and Reacting Customers Unwilling to Change Will Not Participate GCS is Equitable Heaviest Electricity Users are the Target Market Capacity Savings Benefit All Users

Choice, Control, Savings Utilizing rate and equipment menus allows customers choice over their energy purchases Provides customers with more control over their energy bills Customers want choice and control Customers save up to 15% annually Use 3.8% less energy

Consumer Pricing Safeguards Medium Tier Default Gateway programmed not to exceed 87 hours of Critical Pricing Annually 1 hour notification prior to Critical Price being Implemented (Indicator Light on T’stat)

The Primary Motivators GoodCents® SELECT The Primary Motivators Control and Savings

Timeless and Universal GoodCents® SELECT ARE Timeless and Universal

When Do We Call a Summer Critical? If Gulf Power interruptible load has been called If the RTP price for an hour exceeds a certain threshold OR if the daily forecast dry bulb temperature at the Pensacola Regional Airport is 95 degrees Fahrenheit or above for that day, call critical based on consultation with System Control If there is an expectation of an annual Gulf Power peak demand for the day

When Do We Call a Winter Critical? If Gulf Power interruptible load has been called If the RTP price for an hour exceeds a certain threshold OR if the daily forecast dry bulb temperature at the Pensacola Regional Airport is 32 degrees Fahrenheit or below for that day, call critical at either hour beginning 0700 or hour beginning 0800 based on consultation with System Control If there is an expectation of an winter Gulf Power peak demand for the day

Load Reductions August 2005 – 2 Critical Days (3 hrs.) Average Peak kW reduction – 14MW February 2005 – 2 Critical Days (2 hrs.) Average Peak kW reduction – 18.5MW

Load Research Results

Easy– Set it and Forget it….. 2/2/04 No Critical 0.0 1.0 2.0 3.0 4.0 5.0 1 5 9 13 17 21 Time kW

GCS Multi Family -

Questions?? Contact Me!!! Brian White Gulf Power Company 850-444-6438 BLWHITE@southernco.com