Today’s Smart Grid AMI Metering: Fundamental To Tomorrow’s Smart Utility

1. Today’s Smart Grid AMI Metering: Fundamental To Tomorrow’s Smart Utility Rich Creegan Vice President, Marketing and Strategy Itron Inc.

2. The Smart Grid • 7 Key Characteristics Defined: • Enabling informed participation by customers • Enabling new products, services and markets • Optimizing asset utilization and operating efficiently • Providing the power quality for the range of needs in the 21st century • Operating resiliently against physical and cyber attacks and natural disasters • Accommodating all generation and storage options • Addressing disturbances-automated prevention, containment and restoration * National Smart Grid Workshop, June 2008

3. The Technology Challenge • What we do is hard, but not all that difficult; the way we need to do it is • Environmentally Ruggedized • The same technologies from FL to AK • “Field Hardened to Military Specification” • Easily deployed and maintained • Low to no O&M • “Lights Out Operation” • Low Cost / High Quality • Useful life of 20 – 30 yrs • Annual failure rates of less that .03% • “Justified on today’s hard costs, not the way we might do business tomorrow” • Future Proofed • Capable of doing what has not yet been thought of • “Don’t strand the investment when the business model changes” • Low Risk • Incapable of forward investment • “Used & Useful”

4. We Have Options • Continue to look for the silver bullet Blow it up and start over Embrace the “Silver Buckshot”* * Bob Metcalfe

5. AMI Metering: Fundamental The Smart Energy Economy • Diversity of supply to achieve energy independence • Mission critical operations for reliable and flexible energy delivery Action Action Smart Grid Smart Home Knowledge Knowledge • Customer participation in managing energy usage and conservation Smart Customer Smart Utility Information Information Smart Grid AMI Metering Data Data If you don’t know what is going on, you can’t manage it

6. Smart Grid Application Set

7. Advanced Metering Infrastructure Architecture that provides the infrastructure to support two fundamental Smart Grid applications • Smart Metering to support complex metering & new rates • Home Energy Management for demand response & conservation • The applications define two unique technology requirements • Extend to and inside every premise • Potentially tens of millions of connected points • Both cost and longevity are primary considerations • Cost and access are major issues. “> 20 yrs & < $80 – 100 per premise” • But can’t we do more with it? “Yes” • While other devices may share the same overall infrastructure, it is unlikely that the AMI Local Area Network will support the full set of devices to deliver the complete Smart Grid at foreseeable costs: • Mobile Data Computing • Streaming RTU Data • Sub Second, Sub Cycle Latency • Deterministic Command & Control

8. The Smart Grid • The Smart Grid is a multi-tiered “Network Of Networks” effectively interacting to provide appropriate communications to meet a variety of application and data requirements • Wide Area Network (WAN) • Local Area Network (LAN) • Home Area Network (HAN) • Key considerations for each layer are: • Availability & Reliability • Latency & Throughput • Cost & Longevity

9. The Role Of Technology • Technology is one of five key components in the overall solution, but the one that seems to get the most attention • Defined objectives and revised target operating practices • Stakeholder education and adoption • Economic and risk model • Technology set and desired functionality • Deployment and maintenance strategy • In today’s environment none of these are static • Therefore they need to be pursued concurrently around specific application sets (AMI – ADO – ATO)

10. The Technology will advance • This requires a culture and an architecture which assumes transition, if we try and get it ALL completely right the first time we will likely do nothing • We have to work with what we have today to solve immediate issues • Parts of the architectural solution will be at varying levels of maturity • Implementation will likely be • Evolutionary rather than revolutionary • Incremental and transformational • This infers inherent risk and longevity assumptions which are much different than today’s model • Interoperability and transportability is key • No single vendor can deliver entire solution • Promotes an innovative ecosystem of solutions • Ensures simplified “technology refresh”, upgrades and expansion Take Advantage of the “Silver Buckshot”

11. Open Standards • Connectivity AND Communications • Open standards provide interoperability • Allow for applications not envisioned today • Open standards are best started at the “Application Level”

12. Open standards and multipurpose communication technologies are not without their challenges • Security • At the network, application and/or message level • Authentication / Authorization / Availability • Non-Repudiation / Confidentiality / Integrity • Network Management • Scalability • Prioritization

13. Remember: What we do is not hard? • We have done it before! • The Internet • Consumer Electronics • The Financial and Telecommunications Industries • Commercial & Industrial Energy Management Systems • We continue to struggle with how to do this for key infrastructure systems • Transportation • Medical • Energy • The challenge is in the way we need to do it • Environmentally Ruggedized • Easily Deployed and Maintained • Low Cost / High Quality • Future Proofed • Low Risk

14. Thank You