Tim Roughan, Director of Distributed Resources

National Town Meeting on Demand Response and Smart Grid

July 14, 2009

National Grid’s Smart Grid Efforts

2 Confidential

Agenda

SMART Program Objectives

SMART Program Status Massachusetts Pilot New York Pilot Dept. of Energy ARRA

Near Term Objectives & Challenges

Proof Concept work

Customer Experience

Question & Answer

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National Grid SMART Grid Program Objectives

Be able to incorporate significant increases in Distributed and Renewable Generation

Confirm Benefit Expectations for Customers and Society

Improve Energy Conservation through Technology

Improve Grid Efficiency through Monitoring and Control

Improve Grid Reliability and Expedite Outage Recovery

Improve Customer Satisfaction

Create an Interoperable Foundation for Legacy-Today-Future

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SMART Grid needs to be able accommodate large amounts of DG

Applications by Year

0

100

200

300

400

500

600

700

800

2004 2005 2006 2007 2008

NSTAR

Unitil

NGrid (MA)

WMECO

Total

This represents 30 MWs of new DG since 2004.NGrid currently has 25 MWs of PV and 25 MWs of wind in the interconnection process for connection to 13 kV distribution.

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SMART Grid Status

National Grid has made filings in Massachusetts and New York Massachusetts is $57m

New York is $270m

Rhode Island will be filed shortly

A partnership with state regulators is vital to successfully compete for DOE funds.

Scope for the States is anticipated to be similar Common Smart Grid “Spine” and “Clean Energy Modules”

Customers will have the opportunity to participate in advanced tariffs and services that will reduce costs and energy use

National Grid intends to create “Flagship” projects in key cities also known as Pilots

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Massachusetts Overview

• Docket # 09-32 filed April 1st 2009• Response to MA Green Communities Act

• 15,000 electric only customers in Worcester

• $57M cost – “Spine” only

• Extensive media coverage

• Discovery process began on May 22

• Public Hearing and Procedure on-going

• Scope may expand as a result of ARRA matching funds– options include

• Use ARRA to help fund base pilot in Worcester

• Expand pilot in Worcester

• Undertake another pilot elsewhere in MA

Worcester

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New York Overview

• Case #09-E-310 filed April 17, 2009• Response to NY PSC request for

utility filings to support ARRA application

• 80,000 gas and electric customers – 40,000 in Syracuse and 40,000 in Capital District

• $270M total cost

• Met with NYPSC Staff to facilitate Commission action on July 16 before August 6th ARRA submission

• Expedited Discovery Process and updated information on-going

Syracuse

Capital District

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Near Term Smart Grid Objectives and Challenges

Obtain funding for Pilot Deployments

o Manage Regulatory Process in MA, NY and RI

o Develop ARRA Stimulus Funding Process to DOE

o Manage DOE funding process

Conduct a Proof of Concept to Validate Conceptual Design and Inform the Procurement and Vendor Selection

Design an End to End Smart Grid Solution (Business Processes, Information Technology and Customer Experience) to enable:

o Innovative tariffs and programs that provide Choice, Control and Convenience to customers;

o Changes in customer behavior that result in Min. 5% reduction in Peak Demand and 5% reduction in Total Consumption;

o Improved Grid monitoring and control that will accommodate significant penetration of Distributed Energy Resources (Solar, Wind, Storage, PHEV) on Grid to lower system losses, improve reliability, improve power quality and lower operating costs.

Mobilize a deployment team to begin implementing the solution upon approval of funding from the PoC to the Pilot(s) to Volume Deployment(s)

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Proof of Concept Goals and Objectives

Test key business events and processes on the anticipated solution architecture

Establish multiple PoC solution sets to prove technology viability

National Grid - Smart Technology Centre (STC) in Liverpool, NY

Phase1: Stand up and Test solutions to inform the selection process of pilot vendor partnerships

Phase 2: Center of Excellence: Evaluation, Demonstration, Innovation, Training

Current Phase Focus on “Spine”

Communications

Information Systems

Home Devices

Grid Devices

PoC will develop into Demonstration and Training facility

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Customer Experience Goals and Objectives

Educate pilot customers and other key external stakeholders on

The concept of Smart Grid

How it can be beneficial to them and the environment

What options they have for pricing / tariffs

What options they have for Smart technology inside their homes and businesses

Work with regulatory stakeholders to manage the process of customers control groups

Track customer behavior over the course of the pilot(s) and course correct as necessary

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Customer Experience Approach / Key Activities

A comprehensive marketing plan for Smart pilot customers with the following key objectives

Create awareness of the Pilot and the information and options it provides.

Educate customers about the benefits, to them and to society, of a Smart Grid.

Encourage customers to take advantage of the new information and capabilities offered by the Smart Grid.

Motivate customers to permanently change their energy usage behavior.

Inspire customers to become advocates of energy usage modification.

The plan will be primarily for the “Spine” of the project

The plan will be applicable for MA, NY and other jurisdictions

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Questions?

Tim Roughan

Director of Distributed Resources

781-907-1628

timothy.roughan@us.ngrid.cpm