1. Solving the Energy Puzzle Understanding the Rules of Energy Delivery Electricity Natural Gas Tariffs Solar Combined Heat and Power Generation Distribution Transmission Demand Response

2. EPS Approach to Energy Be Efficient When Using Energy Be Effective When Acquiring Energy Use Alternative Energy When Appropriate Be Efficient When Using Energy Be Effective When Acquiring Energy Use Alternative Energy When Appropriate

3. Understanding the Basics You Have Two Choices Or

4. Understanding the Basics What is Your Base Knowledge Compared to: Your personal healthcare? The local drive-thru? What is Your Base Knowledge Compared to: Your personal healthcare? The local drive-thru?

5. Definitions kWh kW Generation Transmission Distribution Tariff Riders Standard Service Offer Energy Provider vs. Distribution Company PLC –Peak Load Contribution

6. Reading An Electric Bill Key Points on Each Bill Meter Identification Location of the Meter Type of Service Electric Consumption (kWh’s) Electric Demand (kW’s) Historical Consumption (kWh’s) Actual Meter Reading Generation Rate Distribution Rate Key Points on Each Bill Meter Identification Location of the Meter Type of Service Electric Consumption (kWh’s) Electric Demand (kW’s) Historical Consumption (kWh’s) Actual Meter Reading Generation Rate Distribution Rate

7. What’s Not on an Electric Bill Average Cost Average Rate Why? Average Cost Average Rate Why?

8. The Reason is Demand The Reason is Demand and Demand Rates Total Electric Cost is a Function of: Understanding the Parts Explains the $$$ The Reason is Demand and Demand Rates Total Electric Cost is a Function of: Understanding the Parts Explains the $$$ Consumption Demand

9. In the Beginning… One Company: Made it Transmitted it Distributed it Known as: A vertically integrated utility

10. “Let There be Deregulation” Others

11. “Three Shall Equal Two” For Billing Purposes Combine: Generation component Transmission component Your generation cost always includes your transmission cost

12. “Three Shall Equal Two” For Billing Purposes: Distribution component stands alone Your distribution cost is always just your distribution cost

13. The Basics to Lowering Costs Do You Really Want to Lower Your Costs? Benefits Cost Worth the effort? Are you willing to leave your comfort zone? Do You Really Want to Lower Your Costs? Benefits Cost Worth the effort? Are you willing to leave your comfort zone?

14. The Basics to Lowering Costs Begin by: Looking at the Power Company Like the IRS Working with a Specialist Begin by: Looking at the Power Company Like the IRS Working with a Specialist

15. The Basics to Lowering Costs To Lower Costs: Analyze Each Component Understand That: Each Component Requires a Different Approach To Lower Costs: Analyze Each Component Understand That: Each Component Requires a Different Approach

16. 5 Ways to Buy Generation 1. The Local Power Company (Standard Service Offer) 2. Individual Energy Providers 3. Individual Brokers 4. Energy Consortium 5. Clearing House of Energy Providers 1. The Local Power Company (Standard Service Offer) 2. Individual Energy Providers 3. Individual Brokers 4. Energy Consortium 5. Clearing House of Energy Providers

17. What’s Your Generation Savings Plan It Should Vary Depending on Your Consumption Larger Users Clearing House Is A Proven “Best” Approach Smaller Users Individual broker who is independent It Should Vary Depending on Your Consumption Larger Users Clearing House Is A Proven “Best” Approach Smaller Users Individual broker who is independent

18. Generation: Other Issues Standard Service Offer The Most Expensive Way To Buy Electricity! Consortiums Who’s number 1? You or the consortium Municipal Electric Systems Few options available Standard Service Offer The Most Expensive Way To Buy Electricity! Consortiums Who’s number 1? You or the consortium Municipal Electric Systems Few options available

19. Transmission Savings Plan Demand Response Only Way to Save Here’s How It Works You commit to reduce demand by “X” kW You get paid cash if you do Demand Response Only Way to Save Here’s How It Works You commit to reduce demand by “X” kW You get paid cash if you do

20. Distribution Options Distribution Cost is Determined by Tariffs & Riders The Key is Understanding the Tariffs & Riders These Vary by Distribution Company Tariffs & Riders Are The “Law Of The Land” Tariffs Seldom Change Riders Constantly Change…Usually Upward There Is A “Best” Tariff For Each User Distribution Cost is Determined by Tariffs & Riders The Key is Understanding the Tariffs & Riders These Vary by Distribution Company Tariffs & Riders Are The “Law Of The Land” Tariffs Seldom Change Riders Constantly Change…Usually Upward There Is A “Best” Tariff For Each User

21. Distribution Tariffs 3 Basic Tariffs for Non- Residential Users Secondary (transformer owned by power company) Primary (transformer owned by user) Transmission (uses high voltage lines) Self Serve vs. Full Serve (Primary & Transmission) vs. Secondary 3 Basic Tariffs for Non- Residential Users Secondary (transformer owned by power company) Primary (transformer owned by user) Transmission (uses high voltage lines) Self Serve vs. Full Serve (Primary & Transmission) vs. Secondary

22. Distribution Savings Plan Use the “Best Fit” Tariff for Your Facility Combine Meters if Campus Setting Experience With Capital Investment Experience Without Capital Investment Use the “Best Fit” Tariff for Your Facility Combine Meters if Campus Setting Experience With Capital Investment Experience Without Capital Investment

23. Review Generation Costs Can be Lowered By active purchasing through “best” method Transmission Costs Can be Lowered Only through “demand response” Distribution Costs Can be Lowered Selecting and using the “best applicable” tariff Combining meters when appropriate Generation Costs Can be Lowered By active purchasing through “best” method Transmission Costs Can be Lowered Only through “demand response” Distribution Costs Can be Lowered Selecting and using the “best applicable” tariff Combining meters when appropriate

24. Turnkey Modification Services Proprietary Financing of Tariff Projects Through Effective Utility Services (EUS) EUS Replaces the Current Utility as the: Owner of transformer or substation (On or Off Site) Provider of maintenance on equipment installed Client Obtains Savings from Tariff Change Client “Profits” the Difference Proprietary Financing of Tariff Projects Through Effective Utility Services (EUS) EUS Replaces the Current Utility as the: Owner of transformer or substation (On or Off Site) Provider of maintenance on equipment installed Client Obtains Savings from Tariff Change Client “Profits” the Difference

25. Summary Our Goal Was to Educate…. Now, You Are an Educated Participant You Can No Longer be an Uniformed Victim…. But, You Can Still be a Victim Our Goal Was to Educate…. Now, You Are an Educated Participant You Can No Longer be an Uniformed Victim…. But, You Can Still be a Victim

26. Reducing the Cost of Generation

27. Best Practice for Generation Savings Larger Users > 2,000,000- kWh Clearing House Is A Proven “Best” Approach EPS can provide access to a electrical clearing house EPS is a channel partner of World Energy Larger Users > 2,000,000- kWh Clearing House Is A Proven “Best” Approach EPS can provide access to a electrical clearing house EPS is a channel partner of World Energy

28. Using a Clearing House Sign agreement with World Energy Specifications are prepared Usage and timeframe An auction date is set 30+ energy providers are notified Sign agreement with World Energy Specifications are prepared Usage and timeframe An auction date is set 30+ energy providers are notified

29. Auction Day at World Energy Wholesale side of providers bid You watch the auction in real time Providers watch in real time After auction closes….YOU DECIDE Who’s offer to take, if any Action by day’s end is required Wholesale side of providers bid You watch the auction in real time Providers watch in real time After auction closes….YOU DECIDE Who’s offer to take, if any Action by day’s end is required

30. What’s Different From Status Quo Buying from wholesale side of the provider Mitsubishi Example OE Wholesale beat OE Retail by $.004 Reach more providers World Energy is stabilizing force Providers can’t risk losing the marketplace Buying from wholesale side of the provider Mitsubishi Example OE Wholesale beat OE Retail by $.004 Reach more providers World Energy is stabilizing force Providers can’t risk losing the marketplace

31. Final Thoughts World Energy & EPS fees are paid by providers No commissions or handling charges are added The rate you see is the rate you pay You benefit by having EPS monitoring you account This approach has always resulted in a lower rate World Energy & EPS fees are paid by providers No commissions or handling charges are added The rate you see is the rate you pay You benefit by having EPS monitoring you account This approach has always resulted in a lower rate

32. FirstEnergy, Ohio Incentives for Energy Efficiency

33. Incentives Now or Incentives Later Incentives Paying Cash Now A Multitude of Incentive Programs Prescriptive or Calculated Lighting Custom Equipment HVAC & Water Heating Mercantile Incentives Paying Cash Now A Multitude of Incentive Programs Prescriptive or Calculated Lighting Custom Equipment HVAC & Water Heating Mercantile

34. Incentives Now or Incentives Later Incentives Avoiding Costs Later Mercantile DSE2 Avoidance Calculated Savings Projects Taking Cash Now or Avoiding Cost Later Can’t have it both ways Can vary project to project Incentives Avoiding Costs Later Mercantile DSE2 Avoidance Calculated Savings Projects Taking Cash Now or Avoiding Cost Later Can’t have it both ways Can vary project to project

35. Incentives Paying Cash Now Incentive rate varies with each program Only good for new equipment Limits on Incentives vary with each program Ranges from 5 to 8 cents/kWh reduced annually Requires pre-approval except under Mercantile 25% incentive reduction if filed w/o pre-approval Three year look back allowed Incentive rate varies with each program Only good for new equipment Limits on Incentives vary with each program Ranges from 5 to 8 cents/kWh reduced annually Requires pre-approval except under Mercantile 25% incentive reduction if filed w/o pre-approval Three year look back allowed

36. Incentives Avoiding Cost Later DSE2 is a rider in all tariffs until 2025 The DSE2 rider can be avoided A minimum consumption reduction required Consumption reduction determines avoidance length A three year look back is allowed No pre-approvals No reduction in incentive DSE2 is a rider in all tariffs until 2025 The DSE2 rider can be avoided A minimum consumption reduction required Consumption reduction determines avoidance length A three year look back is allowed No pre-approvals No reduction in incentive

37. DSE2 Value Fluctuations The value of the rider changes by tariff semi-annually Annual DSE2 avoidance from 1% consumption reduction One year ago = $0.2492/kWh Now= $0.000833/kWh (GP=$-0.001) Next year= ?????? PUCO approved reduction on your distribution rate The reduction is applied to all kWh consumed The value of the rider changes by tariff semi-annually Annual DSE2 avoidance from 1% consumption reduction One year ago = $0.2492/kWh Now= $0.000833/kWh (GP=$-0.001) Next year= ?????? PUCO approved reduction on your distribution rate The reduction is applied to all kWh consumed

38. Last Words on Incentives Pre-approvals Documentation Savings Certification Slow Response Long Time Horizon Pre-approvals Documentation Savings Certification Slow Response Long Time Horizon

39. Questions Generation Transmission Distribution Cash Incentives Mercantile (DSE2 Avoidance) Generation Transmission Distribution Cash Incentives Mercantile (DSE2 Avoidance)

40. Electricity Natural Gas Tariffs Solar Combined Heat and Power Generation Distribution Transmission Demand Response Effective Utility Services, LLC Glen Ginesi, Managing Partner, 419-602-0506, glen@bestuseofenergy.com