1. Leveraging Energy Infrastructure to Drive Revenue
November 13, 2017

2. Who is 5?
40 person team based in DFW with employees in Texas, New Jersey, New York, Maryland, Washington D.C. and Mexico
Team members include engineers, energy traders, quants and regulatory experts that cover a wide range of energy issues
Experts in deregulated energy markets throughout the United States, Canada and Mexico
Serving over 1400 clients throughout North America including commercial and industrial customers, as well as government entities
Founded by energy CEO’s, COO’s, corporate energy managers and commodity traders 2

3. Most Common Opportunities
Power factor correction (minimize billed demand) Demand ratchet management (minimize billed demand) Grid reliability programs:
Utility Commercial Load Management ($40 per KW per year) ERCOT ERS10/30 Demand Response ($50 per KW per year) ERCOT Load Resource ($100 per KW per year)
4CP demand management ($45 to $55 per KW per year)
Tier 2 versus Tier 4 – What you need to know 3

4. Power Factor Correction
KVA2 = KW2 + KVAR2
Power Factor (%) = KW / KVA As KVAR , Power Factor
Utilities like Oncor will increase billed demand as Power Factor drops
below 95% [billed demand = metered demand * (0.95/pF)]
Centerpoint delivery charges are based upon KVA, so any amount of lagging Power Factor increases demand costs
Simple to correct, typically less than 24 month simple payback 4

5. Demand Ratchet
Billed demand = greater of metered demand or 80% of max from prior 11 months
Low load factor meters can experience significant increases in delivery charges per kWh
Demand excursions can be the “gift that keeps on giving”
Operational issues that cause abnormal spikes in demand should be avoided wherever possible
Setting a separate meter for new loads can be costly when compared to
feeding from an existing service due to demand ratchet implications

6. Grid Reliability Programs Utility Commercial Load Management
Program mandated by the Public Utility Commission of Texas
Focused on only June through September, non-holiday weekdays from 1pm to 7pm
Curtailment events are 1 to 4 hours in length with 25 hours max during
June 1 to September 30 period
Requires one annual test, usually about 3 hours in length
Events usually mirror ERCOT ERS demand response events but may
not always
Cannot be enrolled concurrently in ERCOT ERS or LR
$40 per KW in Oncor service territory during the summer of 2017

7. Grid Reliability Programs
ERCOT ERS 10/30 Demand Response
Program sponsored by ERCOT to improve grid reliability
Year around program with no minimum load size; accounts with demands less 100 KW can be aggregated
10 minute or 30 minute notice to curtail (30 minute resources called
first)
3 enrollment periods: Feb 1 to May 31, Jun 1 thru Sept 30 and Oct 1
thru Jan 31
Six time periods for each enrollment period:

8. Grid Reliability Programs
ERCOT ERS 10/30 Demand Response
Participants can be curtailed up to 12 hours per program enrollment
period
Minimum of one test per year typically less than 1 hour in duration Participants are paid each year regardless of whether or not there is an
event
Generators can be used to curtail as long as certain emissions standards are met
Last event was in early 2014:
Approximate value is $50 per KW per year

9. Grid Reliability Programs ERCOT Load Resource
10 minute responsive reserve ancillary services program sponsored by
ERCOT to improve grid reliability
Year around program with 100 KW minimum; most participating meters are 1 MW and up
Two second demand metering and under-frequency trip relay are required by ERCOT
Curtailments can last several hours and affect all participants or a
subset of participants
Minimum of one test per year typically less than 1 hour in duration Participants are paid regardless of whether or not there is an event

10. Grid Reliability Programs ERCOT Load Resource
Generators can be used to curtail as long as certain emissions
standards are met
4 system-wide events and 11 local under-frequency events since 2011
Approximate value is $100 per KW per year 10

11. 4CP Demand Management
4CP KW/KVA is a component of ERCOT electric utility delivery charges that amount to about $45 to $55 per KW/KVA per year
Only applies to interval data recording
meters (typically over 700 KW)
4CP KW/KVA is calculated by the utility as follows:
Average of the 15 minute demands measured at the time of the monthly ERCOT system 15 minute peak demand for the months of June, July, August and September

12. 4CP Demand Management
Reducing 4CP KW/KVA demand by 100 KW would save about $5000 per year at each ESID
By minimizing load during non-holiday weekdays in June, July, August and September between 3:00 pm and 6:00pm, end users can significantly reduce delivery charges the following calendar year
Sample 4CP data summary:
ESID
Facility Name
2016 4CP
Value
Annual 4CP Cost
June
5pm
July
4:00pm
August
4:30pm
September
XXXXXX1
Pump Station #1
464
$ 23,839
1,093
200 58
504
XXXXXX2
Pump Station #2
133
$ 6,608
509 5 9 7
XXXXXX3
Pump Station #3 13
$ 669
XXXXXX4
Pump Station #4
519
$ 25,826
539
532
529
475
XXXXXX5
Pump Station #5 18
$ 908 21 19 16 17
XXXXXX6
Pump Station #6
104
$ 5,174 2
410
TOTAL ==>
$ 63,024

13. Tier 2 versus Tier 4 – The Basics
Tier definitions are tied to a 1996 EPA regulatory change that originally
addressed on road vehicles and non-road mobile diesel engines
Rules were extended to newly manufactured stationary diesel engines in July
of 2006 under EPA’s NSPS standards
At a high level, Tier 2 diesel engine/generators are only allowed to be used in
emergency applications (e.g. utility power outages)
In order to operate in non-emergency situations (demand response, 4CP avoidance, pre-storm operation, etc) engines must now meet the more stringent Tier 4 emissions requirements
Some Tier 2 engines can have emissions retrofits that will allow for non-
emergency operation
Permitting and annual run time limitations exist in both federal and state laws

14. Examples
They can all drive revenue for your organization as a part of a well
thought out demand management program

15. Thank You! Josh D. Coleman, PE L5E, LLC d/b/a 5
4545 Fuller Drive, Suite 412
Irving, Texas