Presentation for:Energy Advancement Leadership Conference

Demand Response Programs & Technologies

Frank A. MagnottiPresident, Global Sales & Marketing

President, Comverge Enterprises

November 17, 2004

Confidential Information

The “Peak Demand” Problem

$300(PJM East - Summer 2000)

$250

$200

$150

$100

$50

$00% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Cumulative Percentage of Hours

$ / M

Wh Hourly Wholesale

Cost to Supplier

Average Retail Price

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“Old-Think”

ADD DISTRIBUTION- Build more lines- “Punt”

ADD SUPPLY- Build more infrastructure- Buy wholesale

Supply constraints

PEAK LOADCHALLENGES

Unhedgeable Transmissioncongestion bottlenecks

Confidential Information

“New-Think”

Supply constraints

PEAK LOADCHALLENGES

Unhedgeable Transmissioncongestion bottlenecks

ADD SUPPLY- Build more infrastructure- Buy wholesale

PROACTIVE DEMAND MANAGEMENT- Cost effective- Advanced technology and business models

ADD DISTRIBUTION- Build more lines- “Punt”

- “Cleaner” than renewables- No line loss or degradation

Confidential Information

Question!

Are Demand Response and Load Management programs technologically, environmentally and economically viable?

Are they large enough to make a difference?

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Programs Greater than 100 MWSoutheastern Region

FPL; FPC; Oglethorpe; Duke; Gulf PowerNortheastern Region

PEPCO; BGE; PSEG; JCPLMidwestern Region

ComEd; Buckeye; NSP; DTEWestern Region

SCE; SMUDComverge is the supplier to over 90% of these Programs

– Five Gigawatts

Major Turnkey Virtual Peaking Capacity (VPC) ProgramsUtah Power, SDG&E, HL&P, ISO-NE I, ISO-NE II

Comverge is the owner/operator of 100% of these Programs – 300 Megawatts

Comverge’s Large Scale Programs

Confidential Information

RealTime

TOU

FlatNone

RA

TE

S

CONTROL BY CONSUMER Full

Maingate™ Home

SuperStat™

Maingate™C&I

6DiNETTM

DCUOne-Way Load Control

Bi-Directional Load Control & AMR

Advanced C&I Metering

Virtual SCADA & Real-Time

Systems

5,000,000INSTALLED

TOU/CRITICALPRICING 120MW

6,500 METERS

100MW

Product Spectrum

Confidential Information

Environmental Impact "Gen-Stack"

So

lar

Win

d

Geo

ther

mal

Gas

-Fir

ed C

om

bin

ed C

ycle

Gas

Pea

kers

Nu

clea

r

Bio

mas

s

Co

al-F

ired

Oil

-Fir

ed

Dem

and

Res

po

nse

/DS

M

Neg

ativ

e Im

pac

tP

osi

tive

Im

pac

t

Increasing Environmental Impacts

Positive Environmental Impact

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Traditional Model: Direct Sale to UtilityHardware and Software PurchaseMass marketing campaignInstallationMaintenanceFinanceUtility accepts all project risk

Virtual Peaking Capacity (“VPC”) Business SolutionUtility ONLY pays for available capacityComverge provides complete turnkey solutionComverge accepts all project riskStructured as a long term “power purchase type” agreement

Two Comverge Load Management Models

Confidential Information

VPC Programs

First Non-Utility Residential DLC Program

Acquisition of HL&P DLC Program

60 MW

First Major VPC Contract Utah Power

90 MW

*Second Major VPC Contract

San Diego Gas & Electric

70 MW

*Third Major VPC

Contract

ISO-NE

48 MW

*Fourth Major VPC Contract ISO-NE

12 MW

* Bid and Won in an All-Source Competitive Bid

(Supply & Demand)

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Overview

Demand Response and Load Control Programs are:

Technologically Viable

Environmentally Viable

Economically Viable and

Large Enough

To Make a Significant Impact as Part of a Portfolio Approach in an Integrated Resource Plan.

Confidential Information

Thank you!

For our high school and college students in the audience – I would like to encourage entering this exciting and rewarding field!

Any questions??