Comverge Qualifications

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1 Comverge Commercial Group National Demand Response Presentation Comverge Qualifications Public Company listed on the NASDAQ (Ticker: COMV) Largest Demand Response Provider 6.1 GW enabled through 5 million end points 3.7 GW owned and operated 1.1 GW of energy & renewable administration & certification (clean power REC markets) Supplier to 90% of the programs greater than 150 MW in size Over 2,100 sites covering 10,000 metering points Over 500 Utilities relationships Copyright All Rights Reserved. 1

2 Demand Response Introduction of Demand Response What is it? Capacity markets; Operate your assets differently for a short period of time, typically 2 to 4 hours Benefits to you? Generates substantial revenue Think of Demand Response as an insurance policy Social Responsibility Benefits? Subsidizes construction of new power plants, saves you costs on utility operational expenses and tax lines Decreases carbon footprint Ensures reliable energy delivery to you and your neighbors What makes Demand Response successful? Engineering Services Coordination between customer and CSP to ensure operational readiness Metering Data Transparency through hardware and software deployment How Demand Response works? Cycling and shutting off equipment and/or running generation to help the ISO or utility avoid a delivery issues or the costs associated with peaking plants Energy Usage Typical Energy Curve Copyright All Rights Reserved. 2

3 Why Demand Response? System operators & utilities need to avoid costs associated with the top few % points of the demand curve i.e. activating peaking emergency power plants As usage grows, alternatives to building new generations and peaking plants to match demand d are needed d Projected growth of electric usage in USA Demand Response Market Growth Copyright All Rights Reserved. 3

4 Demand Response Revenue Map Potential Capacity Program Payments ( ) ISONE ~$43k CAISO ~$43k - $53k APS $35k PSO $34k ERCOT ~$60k PJM $40k NYISO and ConEd Zone J - ~$105k ROS - ~$8k ConEd DLRP $18k $36k CSRP $30k Revenues all reflect value for 1MW of annualized curtailable load, and are before splits (if applicable) Demand Response Programs Capacity Markets - Provides demand reduction as a capacity resource in the forward auctions Energy Markets - Allows customers to reduce energy spend through load reduction associated with energy prices Ancillary Markets Ancillary Markets - Grid voltage reliability through Sync and Frequency Reserves Copyright All Rights Reserved. 4

5 What are the typical resources used for Demand Response? Lighting Control Actions Air Conditioning management Energy Management Systems Load Shedding Schemes (BAS / BMS) Generators Thermal Storage Systems Manual or Automated Load Drop Elevators and escalators Engineering Drive Social Responsibility Demand Response Provider (CSP) Critical to delivering and ensuring demand response behavior and positive interaction results Transparency of Data Copyright All Rights Reserved. 5

6 Engineering Report Establishes Precise Executable Curtailment Strategy Demand Response Program - PJM Copyright All Rights Reserved. 6

7 PJM Capacity/Summer Program Program Name Program Description Response to Event PJM Reliability Pricing Model Operating Months June 1 September 30 A demand response program where customers are paid a monthly incentive to reduce a predetermined amount of electric load. Mandatory to receive payment. Curtailment Window Event History * - Non BGE/PEPCO Event Notification Limits to the Frequency of Events Incentive Payments ( ) Penalties for Non- Compliance Contract Obligation 12:00pm-8:00pm, non-holiday weekdays; 6 hours maximum duration Events: 0 0 1* Tests: Minimum 2 hour notification Maximum of ten events in a control season Capacity = $40.16/kW-year (gross) Energy = $0.999/kWh (gross) Penalty Free, mitigated by Comverge Annual. Customers must be compliant and enrolled by March 15 annually. PJM Demand Response - If no actual events called by mid-august, PJM Mandated Test Event -1 hour in duration. Comverge will coordinate by EDC zone -If actual event after test event, actual event will serve for compliance purposes - PJM requires 15 minute interval data for settlement purposes - Comverge provides all settlement functions. Customers are paid on a monthly basis - Additional PJM Programs -Economic and Reliability -Ancillary programs that provide hours of opportunity to earn additional revenue - Minimum 100kW Nomination -Multiple sites can be aggregated Copyright All Rights Reserved. 7

8 Demand Response Program - NYISO NYISO Demand Response Program Program Name Installed Capacity / Special Case Reserve (ICAP/SCR) Program Description A demand response program, with day-ahead notification, that pays customers a monthly incentive to reduce electric load during times of peak demand. Response to Event Mandatory to receive payment Operating Months Summer Season: May 1 October 31 Winter Season: November 1 April 30 Curtailment Window 7:00am 6:00pm; 4 hours maximum duration Event History Events: (NYC Only) Tests: Event Notification 21 hour notification, 2 hour warning Limits to the Frequency No limit to frequency of events. of fevents Incentive Payment ( ) Zone J (New York City) ~ $105 - $112/kW-year (before split) ROS (Rest of State) ~ $5 - $10/kW-year (before split) ConEd DLRP ~ $18 or $36/kW-year CSRP ~ $30/kW-year Energy payments = $0.50/kWh Penalties for Non- Penalty Free, mitigated by Comverge Compliance Contract Obligation Customers can enroll year round. No set contract period required. Copyright All Rights Reserved. 8

9 NYISO Demand Response Program Test Events to verify contracted capacity in both Summer and Winter. Summer test event will be held between July 1 st and August 31 st. The test will last for at least one (1) hour, and customers will be provided a twenty-one (21) hour warning and a two (2) hour notice. Winter test event will be held between January 1 st and February 28 th. The test will last for at least one (1) hour, and customers will be provided a twenty-one (21) hour warning and a two (2) hour notice. Hourly interval metering is required for settlement and verification of contracted capacity. Comverge provides all settlement functions. Customers are paid on a monthly basis. NYISO has additional demand response programs that can provide supplemental revenue forthcoming (ancillary services) Minimum commitment to participate is 100kW, however Comverge can aggregate multiple customers or locations to reach the minimum. Demand Response Program ISO-NE Copyright All Rights Reserved. 9

10 ISO-NE Demand Response Program Program Name Real Time Demand Response (Reliability Program) Program Description A flexible demand response program where customers are paid a monthly incentive to reduce electric load. Response to Event Mandatory to receive payment. Operating Months Program offered annually June 1 st May 31 st. Curtailment Window 7:00am 10:00pm; 7 days per week. Event History Events: Tests: Event Notification 30 minute notification. Limits to the Frequency of Events Incentive Payment Penalties for Non-Compliance No limit to the frequency of events ~ $43.20/kW-year Penalty Free, mitigated by Comverge Contract Obligation Can register for individual control seasons. Deadline to register is May 1 st for June 1 st enrollment. ISO-NE Demand Response Test Events to verify contracted capacity in both Summer and Winter. Summer test event will be held within the first twenty (20) business days of June. Test will last up to four (4) hours and customers will have a minimum of thirty (30) minutes notice. Winter test event will be held within the first twenty (20) business days of December. Test will last up to four (4) hours and customers have a minimum of thirty (30) minutes notice. 5 minute interval metering is required for program participation. Comverge handles all settlement functions. Customers will be paid on a monthly basis. Minimum commitment to participate is 100kW. Copyright All Rights Reserved. 10

11 Demand Response Program - ERCOT ERCOT Demand Response Program Program Name Program Description Response to Event Operating Months Emergency Interruptible Load Service (EILS) A demand response program where customers can participate in different hourly blocks pending when their load is available. Mandatory to receive payment. Year is broken down into three (3) four (4) month contract periods. Curtailment Window Multiple daily time periods are available for participation. Event History Events: Tests (30 mins): Event Notification Customers must respond to curtailment within ten (10) minutes. Comverge has direct load control technologies to help enable response and participation Limits it to the Frequency ERCOT can call a maximum of two (2) events per contract t period for a Events maximum of eight (8) hours. Incentive Payment ~ $55/kW-year Penalties for Non- Penalty Free, mitigated by Comverge Compliance Contract Obligation Can be for single contract periods. Customers must be fully enrolled by May 1, 2011 for June 1, 2011 contract period. Copyright All Rights Reserved. 11

12 ERCOT Demand Response Program Annual thirty (30) minute test to verify contracted capacity. Customer must have required load available to be called 95% of the time. 15 minute interval metering is required for program participation. ERCOT provides all settlement functions, in addition to verifying the 95% compliance rule. Depending on the geographic region, some transmission companies have additional peaking programs that drive additional revenue. Participation in these programs is based on geographic location. Minimum Commitment to participate is 1MW. Comverge can aggregate multiple end-use customers to meet the minimum obligation. Demand Response Programs - PSO Copyright All Rights Reserved. 12

13 PSO Demand Response Program Program Name Program Description PSO Demand Response Program An exclusive summer-based demand response programs where customers are paid an incentive to nominate and curtail electric load. Response to Event Mandatory to receive payment. Operating Months June 1 st September 30 th Curtailment Window 1:00pm 7:00pm; non-holiday weekdays; 4 hour maximum duration. Event History 2010 Events : 1 Hours: 4 Event Notification Customers must curtail within two (2) hours of notification. Limits to the Frequency of Events Incentive Payment Penalties for Non-Compliance No more than one (1) event per day; nor three (3) events per week; nor four (4) events per month. Delivery season is capped at 61 hours. Capacity Payment = $33.48/kW-year Penalty Free, mitigated by Comverge Contract Obligation Annual Contracts. PSO Demand Response Program Customers will be paid based upon performance in PSO-initiated events. Customer and Comverge will perform mutually agreeable engineering assessment prior to enrollment. Customers must have PSO approved interval metering capability to participate. Comverge will perform all settlement functions associated with compliance. Customer will be paid directly from PSO. The minimum commitment to participate p is 100kW Copyright All Rights Reserved. 13

14 Demand Response Programs California AMD California Demand Response Program Program Name AMP Demand Response Program Program Description A flexible program where participants are paid a monthly incentive to reduce a pre-determined amount of load during an event. Response to Event Mandatory to receive payment. Operating Months May 1 st October 31 st Curtailment Window 11:00am 7:00pm, non-holiday weekdays Event History Events: Tests (2 hours): Event Notification Customers must curtail within thirty (30) minutes of notification. Limits to the Frequency of Events No more than one (1) event per day, 2 6 hours of curtailment. Maximum of 50 hours per year. Incentive Payment ( ) Penalties for Non-Compliance Capacity Payments = $53.52/kW-year Energy payments = $0.35/kWh Penalty Free, mitigated by Comverge Contract Obligation Annual. Customers much be enrolled by June 1 Copyright All Rights Reserved. 14

15 AMP Demand Response Program PGE can call up to two (2) test events, and each of those test events could last two (2) hours. Historically customers have been given at minimum five hours or greater notice for test events. Interval meter is required for program participation. PGE will provide if enabling technology is not currently in place. Comverge provides all settlement functions on behalf of the customer. There is no minimum commitment for participation. p Customers average peak load must be 200kW or greater to participate in the program. CBP California Demand Response Program Program Name Program Description Response to Event Operating Months CBP Demand Response Program A flexible program where participants are paid a monthly incentive to reduce a pre-determined amount of load with either a day-of or day ahead notification. Mandatory to receive payment. May 1 st October 31 st Curtailment Window 11:00am 7:00pm, non-holiday weekdays Event History Day-of Option: Day Ahead Option: Event Notification Day-Of Option: Up to 3hrs before the start of an event. Day Ahead Option: By 3:00 p.m. the day before an event. Limits to the Frequency of Events No more than 1 event per day, 1 4 hrs of curtailment. Maximum 24 hours per month Incentive Payment Day-Of Option = $49.86/kW Day Ahead Option = $43.35/kW Energy = based on market price Penalties for Non-Compliance Contract Obligation Capacity payments are reduced for less than full performance; penalties added for less than 50% of nominated load reduction. May participate on a month-to-month basis. Copyright All Rights Reserved. 15

16 CBP Demand Response Program Utility may call a test event if no real events have been enacted. Customer must have an interval meter to participate in CBP program. Comverge will provide all settlement functions on behalf of the customer. Customer will receive all revenue earned through participation by December 15 of each year. Minimum commitment is 100kW. Steve Dixon Director, Commercial & Industrial Sales sdixon@comverge.com Copyright All Rights Reserved. 16