Introduction to Echelon and the Networked Energy Services

Introduction to Echelon and the Networked Energy Services (NES) Advanced Metering Infrastructure Bob Warden VP Corporate Accounts

Company Overview l A networking infrastructure company – Pioneering machine-to-machine (M 2 M) and embedded Internet technologies – Providing standards-based hardware and software products l A “green tech” company in a “green” era – Enabling energy efficiencies throughout its product lines l Two main product lines – LONWORKS® Infrastructure – Networked Energy Services (NES) 2

Echelon Is A Pioneer and World Leader in Advanced Metering l Nearly two decades of experience in device networking l Supplier of networking infrastructure to world’s largest AMI deployment – 27+ million meters using Echelon’s products & technology l 3 Over 1 million advanced meters — all based on IEC & ANSI standards — being deployed today

Selection Criteria and Guiding Principles 1. Networking infrastructure project, not just AMI or AMR 2. Standards-based hardware and software products 3. Operational and business decisions should not be constrained by infrastructure choices 4. Guiding principles include: – – Ability to choose products and services from best in class companies Communication network can carry information from any device Standard connections with minimal integration efforts Ability to remotely upgrade and adapt devices

Next-Generation Systems Enable New Utility Business Processes Business Process Changes delivering ROI Smart Grid • Energy Management Services > Residential, Commercial Smart Meters • Home Area Network gateway • Solid-state platform > PLC (i. e. LONWORKS®) • Integrated communications > RF (i. e. Bluetooth) • Integrated disconnect switch • Web-based applications > Remotely disconnect > Demand Response > Remotely connect Advanced Metering > Prepayment • Power quality data Infrastructure (AMI) > Load Control > Voltage readings > Revenue Protection > Current readings • On-demand reads > Web Move in/out > • Programmable load intervals Power Factor > Frequency • Distribution Automatic Meter • Bi-directional and net > Detailed power outage data > Load profiling / Reading (AMR) metering engineering • TOU, RTP, CPP pricing • Advanced theft detection • Remote programmable > Phase balancing • One-way or two-way options • Remotely upgradeable > Transformer • Demand response Manual meter reading • Monthly k. Wh reads • Internal expansion port optimization • Interval data • Gas & water metering > Future functionality > Energy forecasting • Basic theft detection • Monthly k. Wh reads > Outage detection and • Outage/Restoration Detection GIS > Restoration automation > Work Force Opportunity Cost of Investment Cost 5

Networked Energy Services NES Architecture & Components 6

NES Meters Market-leading advanced functionality l Detailed electrical measurements l Extended information & alarms l 200 A disconnect under glass l “Virtual IP” card in every meter l Remote firmware download support Designed for >20 year life with <0. 3% annual failure rate Traditional, compact form-factor l l 7 – Active and reactive energy – Import and export metering – Flexible time of use metering – – Multi-channel data recorder Power quality data and alarms Tamper and theft detection Connectivity to other meters and devices – On/off – Load limiting/service upgrade to any level – Prepay – Share a single physical IP connection – Communicate to in-home devices

NES System Software Web services interface based network operating system l NES network operating system – Enables choice of off-theshelf applications – Supports quick development of custom applications and integrations l l Redundant architecture l Backward-compatible l 8 Scalable to millions of devices Standards-based Utility Software Web services Web events NES System Softwar IP WAN

Fundamental Design Principles l l Use best-of-breed standards l Network-grade, end-to-end security is essential l 9 Leverage the power of networks “Never visit the meter again”

Fundamental Design Principles Leverage the power of networks l l Advanced metering networks should too – Spread cost of “expensive” components (e. g. , modems, backhaul connection) across many meters and devices l The NES system is not a “PLC” system l The NES system is not an “RF” system l 10 Data networks share expensive resources to reduce cost per connected point – Networked printers, networked servers, shared broadband connection, … The NES system is a networked system – Leverages the strengths of each to lower deployment cost, lower operating costs, and lower life-cycle costs

Fundamental Design Principles Use best-of-breed standards l Each element of the system uses standards optimized & proven for that application domain Ø Meters built on proven metering standards l ANSI C 12. 18, ANSI C 12. 19 Ø Networks built on proven networking standards l ANSI 709, TCP/IP Ø IT interfaces built on proven enterprise standards l XML/SOAP (Web services) l l 11 Leads to highest quality & security Drives down cost of network connectivity, IT integration – The largest contributors to total cost of ownership for an advanced metering system

Fundamental Design Principles Network-grade, end-to-end security is essential l l Security begins in the factory l Security is multi-layer l Keys are random – For example, knowing the unique key of one meter gives you no information for finding the unique key for another meter l 12 Everything is secured – No manufacturing “back doors” around security – Devices are always in a secured state – All communication in secured end-to-end Unique keys never have to be distributed to field employees

Fundamental Design Principles “Never visit the meter again” l l Enable/configure functionality remotely instead of replacing products – Built-in, firmware controlled disconnect in every meter – Hourly metering and multi tariff in every meter – Prepay support in every meter – Power quality in every meter – Multi-channel data logger/load profiling in every meter –… l Remote upgrade rather than replacing products – All components support remote firmware upgrade l 13 High level of “base” functionality built into every meter Long-lived, reliable products – Designed for >20 year life with <0. 3% annual failure rate

Next-Generation Systems Have Already Taken Hold in Europe — Powered By Echelon Technology Smart meters, Mr Conti believes, will give Enel an edge “for the next 20 or 30 years”. — Fulvio Conti, CEO Enel, from The Economist magazine “…during the tender process, a generation change in technology took place…” — Göran Lundgren, CEO of Vattenfall distribution, from Ny Teknik magazine 14

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AMRELVA 3 System Features In addition to AMR All meters have: • Remote disconnect – Move in – Move out – Summer houses – Future pre-pay • Load control relay • Power outage recording and reporting including phase loss • Power Quality – Voltage , current, frequency monitoring • Hourly load profile About 12 meters/concentrator Over 300, 000 meters read every night Adding over 5000 meters per week © Vattenfall AB

Market Strategy l Deliver a complete system infrastructure – – l Highly reliable Low cost Broad functionality Globally applicable Establish it as a multi-vendor standard – Open to any company; equal terms for all – Open interfaces to allow innovation and customization at both ends of the system – meters and applications software – Guaranteed standard and interoperable network infrastructure l 17 Create a “future-proof” platform for utilities

The Only Advanced Metering System Available Today From Multiple Sources l l Differentiated solutions l 18 Common advanced metering infrastructure Interoperable applications

NES is a Platform for Smart Grid Distribution Automation Networks Open Web Services API Network Operating System TCPIP WAN or LAN NES Smart Meter with IP NES System Servers Database Data Collection Configuration Security Building Automation Networks Home Automation Networks PLC A Band for Utility Open HAN RF Meter Expansion Port LONMARK® i/f + RF NES Smart Meters 19 IP HAN Gate way

Summary l l Next-generation systems deliver substantial benefits to utilities and consumers – Dramatically more beneficial than just AMR with two-way communications l Next-generation systems enable in-home applications l 20 Next-generation systems are the future of metering and the utility industry – Only enabled by using truly smart meters – Require a network-centric approach to reliability, security, and scalability Next-generation systems provide the infrastructure for meeting today’s requirements and the platform for delivering future applications