Utility Perspectives on Electrification of the Vehicle Knut Simonsen Sr. Vice President, Strategy and M&A President, Energy Ventures November 15, 2009

Plug-in EV’s nothing new! 1900s – 2x EVs compared to ICE Detroit was the first American city to use electric taxi cabs Note curb-side charging port 1914 Detroit

Electric drive technologies Today Plug-in Electric Vehicles (PEV) Internal Combustion Engine (ICE) Engine Transmission Differential Engine Transmission Motor Batteries Differential Mechanical Coupling Hybrid Electric Vehicle (HEV) Differential Engine Transmission Mechanical Coupling Batteries Motor Plug-in Hybrid Electric Vehicle (PHEV) Engine Motor Batteries Generator Extended Range Electric Vehicle (EREV) Motor Batteries Battery Electric Vehicle (BEV) Miles Electric only: 10-20 ~40 100+ Larger battery and less emissions

Electric drive technologies and annual electricity consumption Annual Electricity Usage per Vehicle* (kWh) 75% of Americans drive less than 40 miles on their daily commute 40 miles electric only - achieves similar GHG reduction as BEV - Limited need for public charging BEVs will require faster charge rates and more daytime charging to address range “anxiety” - Needs public charging infrastructure * Assumes a vehicle drives 12,500 miles / day, PHEV and EREV electric usage varies depending on drive characteristics, Chevy Volt-type vehicle at 5 mi/kWh

In addition to technology advances, multiple factors are aligning to support a successful launch of PEVs U.S.A. Rest of World Policy $2.4 Billion in U.S. stimulus dollars directed at advanced automotive batteries European Union target of 95 grams of CO2/km by 2020 => 60 mpg Climate Significant activity in Washington on federal climate legislation China’s commitment to building 500,000/year hybrid and electric vehicles by 2012 Energy Security Push for a domestic fuel source and fear of the return of high gas prices Urban smog in emerging mega-cities

Plug-ins have a big fuel cost advantage … … but BIG upfront premium today ~$15,000 premium over regular car reduced by $7,500 tax credit but for now, disadvantaged on purchase price Plug-ins have a big fuel cost advantage … US example Fuel Cost Comparison* ($/Mile) $12,500 - $17,500 fuel savings over 10 years* * Gallon of gasoline equivalent price computed comparing ICE mileage of 26 mpg to PEV mileage of 5 mi/kWh at $0.10/kWh, 12,500 miles per year, undiscounted

Summary of current PEV incentives USA Goal of 1 million by ‘15 Up to $7,500 / vehicle Canada Ontario: up to C$10,000 / veh Green license plate: 5 yrs of HOV, special parking China 25 mil cars and 100 mil e-bikes! Most are 1st time car buyers 100% tax on reduced for PEVs 13 cities picked for roll-out $8,800 for taxi and gov’t Skip ICE tech to focus on PEV Japan PEVs ~$16,000 incentive plus reduced road tax and registration 8 cities picked for pilots France $2.2 B for 1 mil. charge points $7,500 / vehicle through ‘12 UK >$400 mil infrastr and auto $8,500 / vehicle, London lead

Electric drive reduces GHG emissions and our addiction to imported oil Freedom from petroleum: electricity a domestic resource 350 Future ICE Hybrid Coal Natural Gas Nuclear, Wind, Solar, etc. Gasoline Electricity (by source) * 204 lb/MMBtu CO2 emissions rate (no carbon capture), 9,500 heat rate coal plant, 7,500 heat rate natural gas plant, ICE engine at 26 mpg, Hybrid drivetrain between 30-45 mpg, electric motor at 5 mi/kWh Source: Argonne National Labs GREET Model, DTE Team Analysis

Infrastructure in place for broad PEV adoption ILLUSTRATIVE Impact of PEV on Typical Summer Load Profile (Ideal Case)* MW 10% market share** * PHEV is likely to also contribute to increased load during peak hours. Illustrative example of electric utility load – similar to Detroit Edison ** Estimated 600,000 cars and light trucks (does not include diesel trucks, buses, etc), 12,500 miles per year, 3.0 mi/kWh average efficiency, 75% electric operation Source: DTE analyses, EPRI/NRDC Report

25 kVA Transformer with Uncontrolled PEV Load* Uncontrolled charging could lead to localized outages if not properly managed Potential problems Voltage dips (dimming lights, damage to expensive electronics) Service interruption Transformer failure Measures to address these issues On-vehicle charging control (time/date control) Utility notified at time of PEV purchase SmartGrid technology Load shape for warm summer day – adding 3 PEVs to a neighborhood 25 kVA Transformer with Uncontrolled PEV Load* Summer Load 3 PEV @ 1.4 kW 3 PEV @ 3.3 kW Peak Capacity Design Capacity` * 8-12 smaller, older homes per 25 kVA circuit. Most homes without central AC.

Can PEVs absorb excess off-peak wind generation in the future? Windy Spring Day (~60% cap. factor) Generation and Load Profile in MISO – 2020 Estimate Illustrative Example MW The answer is yes – however: - Need ~10% of vehicles to be PEV by ‘20 - ’25 Wind tends to blow more at night when electric demand is at its lowest Creates carbon free transportation Wind generation Noon 6 PM Midnight 6 AM Noon April 11 April 12 * Assumes 20% RES requirement with 15% from wind (based on actual 2009 data – scaled up 5.4x for 2020)

US Utility industry pledge: Accelerate adoption of plug-in electric vehicles

What should utilities and regulators be working on today? Home Charging Streamlined process for customer is #1 priority MiniE/EV1 home install: 30-40 days average with up to $3,000 installation cost Integration with utility system planning can avoid localized transformer issues Develop PEV rates and capture benefits from flexible nature of demand Consider a “behind-the-meter” home charging station installation service offering Customer / Stakeholder Education Be ready to handle customer questions, carbon equation Update building codes to include 240V outlet in new home garages Work with state and local inspection agencies to create a streamlined permitting/inspection process for plug-in EV charging stations Public Charging How much, how soon? Form public / private partnerships to install high visibility charge spots Create pilot programs today to “work out kinks” while vehicle volumes are low