1. AMIT-DSWG Workshop ‘AMI’s Next Frontier: Demand Response Part 2’

2. 2 December 16, 2011 Review of Goal AMIT/DSWG Workshop See Project Goal document

3. 3 December 16, 2011 Update from each group – highlights, review of issues AMIT/DSWG Workshop ERCOT / DSWG (ISS-002) Jay Zarnikau, Frontier Associates

4. 4 ERCOT / DSWG assignments Update from each group – highlights, review of issues –ERCOT / DSWG (ISS-002) –Mass Market Loads in Energy & Ancillary Services markets Enable aggregations of loads with advanced metering to participate as Load Resources in SCED, and also participate in the Ancillary Services markets and be dispatched economically by SCED. –Near-term resource adequacy Create or modify demand side products or services that can make new DR capacity available quickly and potentially be counted in ERCOT's calculation of planning reserves. –Lessons from Capacity Markets Review best practices in capacity markets and modify them for the Energy Only Market Design. This recognizes that there is little interest in changing the energy-only design. Examine how demand resources are purchased in markets with ICAPs, etc. December 16, 2011AMIT/DSWG Workshop

5. 5 ERCOT / DSWG assignments - Continued –Advanced notification of wholesale prices In the current environment, Load Zone 15 minute prices are known after the settlement interval has expired. Ideally notification would be at least 90 seconds prior to the interval starting. –Customer acceptance of DR Lack of comprehensive knowledge of customer tolerance of Demand Response (frequency and type of deployments). –DR products with longer lead times (ramp periods). Current ERCOT DR products have 10 to 30 minute ramp requirements. Longer ramp periods could attract more customer participation, especially for smaller loads. December 16, 2011AMIT/DSWG Workshop

6. 6 ERCOT / DSWG assignments - Continued –Identify customers participating in DR/price response. ERCOT & TDSPs could benefit from knowing which customers are enrolled in DR/price response products. Could benefit load forecasting and grid operations. –Effects of price response (voluntary or passive load response) Need study to obtain a better understanding of existing price responsive load. December 16, 2011AMIT/DSWG Workshop

7. 7 December 16, 2011 Update from each group – highlights, review of issues AMIT/DSWG Workshop Market Design (ISS-005) Paul Wattles, ERCOT

8. 8 Market Design assignments Update from each group – highlights, review of issues –Market Design (ISS-005) Fragmented Benefits –No single entity captures sufficient benefits to justify investment in DR tools. Customer Churn (Choice) –Tendency of retail contracts to be short term (24 months or less) may not allow for REP cost recovery for products and services that include DR/Load management equipment. This barrier does not apply to products and services based purely on price incentives (IE, TOU) that rely on behavioral changes. Regulatory and Legislative Environment –Under PURA, DR-related products cannot be mandated and there is limited ability for policymakers & regulators to affect product design and stimulate DR-related products. December 16, 2011AMIT/DSWG Workshop

9. 9 Market Design assignments Update from each group – highlights, review of issues –Market Design (ISS-005) Lack of ability for customers to participate directly in wholesale energy market –Load Participation in SCED/Economic dispatch of Loads, based on energy offers, for ERCOT Ancillary Services would attract new DR participation Limits on access to AMI data –Revised rules for access to SMT data for DR providers and retail aggregators could lead to additional DR-related products Lack of tools to maximize DR in the short term for grid reliability –What incentives can be put in place to attract new DR participation in advance of summer 2012? December 16, 2011AMIT/DSWG Workshop

10. 10 Market Design assignments Update from each group – highlights, review of issues –Market Design (ISS-005) –Any new issues? New - Lack of time differentiation in T&D Rate Design –Current profiled, consumption-based T&D rates do not create incentives for small customer demand response December 16, 2011AMIT/DSWG Workshop

11. 11 December 16, 2011 Update from each group – highlights, review of issues AMIT/DSWG Workshop PUC (ISS-001) Christine Wright, PUC Staff

12. 12 PUC Staff assignments Update from each group – highlights, review of issues –PUC Staff(ISS-001) Energy Efficiency (SB-1125) and EILS rulemaking –Issues and language changes will be addressed during the respective rulemakings Need a vision on the direction of DR from the commission –Commissioners have been supportive of DR and believe it is important. They are able to act on individual projects when they come before the commission. The commission can only act on contested cases or by rulemaking. Coordinated approach between market participants is supported This electric market is a competitive market. The Commission has historically not been in favor of requiring REPs to offer certain products. If the market is competitive, and a product is desired, then REPs will offer it. Third Party access to data is being addressed with the SMT efforts underway. December 16, 2011AMIT/DSWG Workshop

13. 13 December 16, 2011 Update from each group – highlights, review of issues AMIT/DSWG Workshop AMIT Steering / TDSP (ISS-003, ISS-004, ISS-008, ISS-010) Andrea O’Flaherty, Project Manager, SMT

14. 14 AMIT Steering / TDSP assignments Update from each group – highlights, review of issues –AMIT Steering / TDSP (ISS-003, ISS-004, ISS-008, ISS-010) –Communication / data management »Operational models were developed to identify the support requirements - 7 models were discussed in detail »Common barriers / challenges across the models included »Cost of device »Cost of installation »Lack of universal access to high speed internet »Reliability of communication networks »Complexity of multiple roles and the coordination »SMT release 4.0 –Third party access to data »SMT third party initiative underway –Third party HAN provisioning »HAN Support initiative underway December 16, 2011AMIT/DSWG Workshop

15. 15 December 16, 2011 Update from each group – highlights, review of issues AMIT/DSWG Workshop Customer (ISS-006) Jay Foliano, HAN Development Oversight Coordinator

16. 16 Customer subgroup Update from each group – highlights, review of issues –Customer (ISS-006) Programs and customer acceptance are evolving Customer education strategy discussions are beginning, much work to be done in 2012 Sharing of ideas, many great references are available and being circulated among the group –2011 State of the Consumer Report – Smart Grid Consumer Collaboration –The National Action Plan Communications Umbrella-Action Guide –2011 IBM Global Utility Consumer Survey »“This year’s survey points to a need and an opportunity to go back to basics and educate consumers by using terms that they understand, behavioral triggers and channels they already use. People want to conserve energy; we just need to get better at showing them how.” December 16, 2011AMIT/DSWG Workshop

17. 17 GE Customer Survey presentation Insert J.T. Thompson’s presentation GE Appliances and Lighting Home Energy Solutions –Energy Perceptions and Usage Survey Results December 16, 2011AMIT/DSWG Workshop

18. 18 Comverge Customer Perspectives presentation Insert Ed Reyes’ presentation Comverge Inc. - –Ideas from Other Markets December 16, 2011AMIT/DSWG Workshop

19. 19 Afternoon session – what to expect Difficulty of each recommendation –High Examples: –Requires legislation –Requires PUC Rule –Millions of $ –Multi-year development –Etc. –Medium Examples: –Protocol / Guide Revision –Less than 2 years of development –Six Figure $ –Etc. –Low Examples: –Tactical –In scope of current market design –Budgeted or minimal $ impact –Etc. December 16, 2011AMIT/DSWG Workshop

20. 20 Afternoon session – what to expect Impact of each recommendation Impact on the objective: Accelerate the growth of demand response and load management among AMI customers leveraging this environment. Context: –6.5 million meters –68,000 MW grid Impact Options: –Significant –Incremental December 16, 2011AMIT/DSWG Workshop

21. 21 Break for lunch Lunch 11:30 – 1pm We will start promptly at 1pm! December 16, 2011AMIT/DSWG Workshop

22. 22 Review of Recommendations document Draft recommendations document – Jenina leads this Review approach for the idea of a column for impact on the goal – how do we accelerate the growth of demand response and load management for AMS customers December 16, 2011AMIT/DSWG Workshop

23. 23 Break –Break 3pm – 3:15pm December 16, 2011AMIT/DSWG Workshop

24. 24 Roadmap Interim report –White paper and accompanying slide deck Overview slides – Audience – TAC, Board, PUC When – Q1 Why – outline of recommendations, including those that need direction –Input from today’s meeting Next steps / future activities December 16, 2011AMIT/DSWG Workshop