Energy Axis AMR System Overview Proprietary and Confidential

Energy. Axis® AMR System Overview Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Presentation Overview 1. Elster Electricity – who we are 2. History and Experience 3. The Elster AMR Solution 4. Product/System Delivery Schedule 5. Detailed Discussions on: n MAS Communications Server n A 3 ALPHA Collector n REX Meter n RF Network Operation Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster Electricity – Who We Are Elster Electricity, located in Raleigh, NC, is the former Electricity Metering division of ABB Inc. and Westinghouse Electric Corp. Elster Electricity is a subsidiary of Ruhrgas Industries (RI), headquartered in Essen, Germany, which in turn is now owned by E. ON a large German conglomerate (over $35 B in revenues). In the USA, RI owns Elster Electricity, the former ABB Water Metering group, and American Meter Company (gas metering). Together, we are the world’s largest supplier of gas and water meters, and a leading supplier of electricity metering. Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

History and Experience – We are not new to AMR Our AMR, Load Management, & Distribution Automation experience began with Westinghouse and extends over 35 years § § § ü ü ü ü 1960 s Pilot-wire meter reading and Telephone AMR 1970 s Encoding meter registers 1975 -1980 EPRI trials of 2 -way carrier and 900 MHz radio 1982 EMETCON power line carrier system introduced 1980 s Solid state recorders & communications 1985 -1997 Load Management and Distribution control systems (Carrier, Ripple, VHF & FM/SCA RF) 1990 s Transtex. T home automation (Telephone & CEBus) 1990 s - Telephone, Cellular, CDPD, satellite and RF communications solutions for C&I metering 1999 AMR Server data collection and enterprise meter data repository 2003 Energy. Axis 900 MHz AMR system ü Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004 = Commercialized systems

Elster AMR Philosophy n Provide two-way options whenever possible n Favor meter data “from the meter” solutions Ø Direct electronic register reads Ø Billing data auditable at meter Ø NO intermediate pulse storage errors or network computations n Integrate meters and communications for costeffective solutions n Provide Meter Information solutions, not just “AMR” Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster Energy. Axis® System Technology to Empower Utilities Cust. Info. System Billing / Settlement Systems Work Order Mgt. / Inventory Engineering and Operations Outage Mgt. System Load Research Marketing Services Enterprise LAN / WAN Large System Coordination (fut. option) Data Collection Systems MAS-EE AMR Server MAS Comm Server Meter Data MAS Comm Server Telephone / Cellular / Paging WANs Meters & Communications Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004 Residential / C&I Fixed Networks MAS Comm Server

Energy. Axis AMR System Elements MAS Data Collection Systems ALPHA Meters with Communications REX Meters with RF Communications Commercial, Industrial, Residential, small Commercial Telephone or Cellular WANs Analog Cellular RS-232 with CDMA/1 XRTT or GSM/GPRS RS-232/ RS-485 Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004 Energy. Axis 900 MHz LAN A 3 ALPHAs with RF Communications Commercial / Industrial Future Water & Gas with RF Communications

NEW Elster Energy. Axis AMR System ¢ ¢ ¢ Entirely meter-based AMR system Residential, commercial, industrial Electric solutions, future Water and Gas Uses proven 902 -928 MHz unlicensed radio for local area networks and public Wide Area Networks New Elster-designed repeating RF “mesh” LAN architecture Elster MAS Data Collection systems on Windows 2000 PC platform can support up to 200, 000 meters each Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster Energy. Axis AMR System for Residential ü Integrates 900 MHz communications into REX and A 3 ALPHA electronic meters ü 900 MHz repeating RF LAN Solution for single-phase Residential and small Commercial applications Telephone Future RF WANs MAS Comm Server Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster AMR Functionality - Commercial & Industrial ü REX meters for single-phase Commercial available today ü Polyphase ALPHA meters with multiple WAN AMR options available today ü Polyphase A 3 ALPHAs with repeating RF LAN communications now available for energy & demand metering only Public Networks (Telco / Cellular) MAS Comm Server Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004 3 -ph A 3 ALPHAs Energy. Axis 900 MHz LAN 1 -ph REX Meters Small Commercial sites, Strip Malls, Shopping Centers, Large Industrial Sites Public Networks (Telco / AMPS / Digital Cellular / Paging) Single or 3 -phase ALPHAs

A Mesh Network Assumes Obstacles C n Mesh networks were developed for battlefield conditions where units are moving. n Every radio repeats every message it hears. n This is chaotic and can lead to interference when units are fixed. Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004 n Elster employs a ‘controlled’ mesh where the Collector meter sets up the meter/repeater network n Algorithms emphasize reliability to each meter and allow paths to change in an organized fashion when needed. n Network configuration and changes are transparent to the operator.

Elster AMR System – Key Differentiating Feature New Advanced Elster RF network § § § Proven 900 MHz unlicensed communications Intelligent 2 -way communications to all meters Mesh Network RF LAN architecture Ø Any meter can be a repeater Ø Mesh networks controlled by A 3 ALPHA Collector Meters § Architecture provides up to 7 Repeater Levels (8 ‘hops’ ) § Ø Allows communications around obstacles… fewer coverage “holes” Ø Expands Collectors’ coverage area… fewer units = lower costs System Algorithms: § § § Optimize communications reliability to each meter Support Automatic RF registration for “Plug and go” installs Allow Self-healing communications – Units will re-register via alternate paths when local RF conditions change Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Cost-Effective for Both Targeted or Mass Deployments High-cost, Hard-to-Access, Dangerous, or High-Turnover Areas Apartments Student or Military Housing Mass Residential and Commercial Areas Industrial Campuses Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

New REX Electronic Meter n New, all-electronic single-phase Elster meter n Supports Elster AMR communications on main board Ø Utilizes unlicensed 902 -928 MHz band Ø Frequency-hopping spread-spectrum communications Ø 1/4 -watt transmit power Ø Two-way communications support Scheduled & On-request reads of any meter n ANSI 0. 5 accuracy class (0. 2 except at temp. extremes) n Forms 1 S, 2 S, 3 S and 4 S (12 S in 2 Q 2005) n Voltage: 120 and 240 V + 20% n -40° to +85° C rating (inside the meter) n Class 20, 200, or 320 self contained Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster AMR System – Key REX Features ü ü REX meter supports flexible rates without costly equip-ment changes or site visits. Any meter can measure: Ø Energy (Delivered, Received, Sum, or Net) Ø TOU (4 Tier, 4 Season Energy) Ø Demand (Total + 1 Tier or 2 Tiers) Ø Real-Time / Critical Tier Pricing at any time Ø 15, 30 or 60 minute Load Profiling NO batteries needed for TOU or LP functions in most meters… time is kept by system and Collectors Lowers initial meter cost Ø Eliminates battery maintenance Ø Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster REX Meter – Other Key Features ü Tamper Detection § Outage / blink counts § Reverse energy always metered ü Meter failure statuses ü End-point Voltage data ü Utility-specific LAN ID in each meter allows overlapping service territories without operational conflicts ü Optional 200 A. Service Disconnect internal to the REX meter with demand limiting capability ü Outage and Restoration data Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

A 3 ALPHA with 900 MHz LAN Board n A 3 Nodes provide polyphase AMR metering functions with LAN operation similar to REX n Units can function as an RF network repeater and can reside on same Collector networks with REX meters n Currently available in Form 12 S n Forms 9 S, 16 S, 35 S, 36 S to be available 1 Q 2005 n Limited initial functionality n k. WH energy and k. W demand metering only n Future units will support TOU, LP, Reactive Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

A 3 ALPHA Collector Overview n A 3 Collectors can be either single-or polyphase meters Ø n Meets ANSI standards, including C 12. 18, 19 & 21 Consists of A 3 ALPHA meter with 2 internal boards: Ø WAN: Available with internal telephone outage modem; optional external CDMA or GSM cellular modem, other future RF options Ø LAN: 900 MHz RF Internal LAN Controller Board (ILC) n Manages LAN of up to 1, 024 meters, including autoregistration and re-registration processes n Includes a Lithium TOU battery to maintain LAN system time, which is broadcasted periodically to all AMR meters in the RF LAN n Maintains current and optional TOU Tier schedules for downloading to REX meters (up to 8) Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster AMR System – Future Flexibility Energy. Axis system adaptable for: Ø Broadcast messaging Ø In-home communications Ø Energy Management & Load Control Ø In-home Display for customer messaging (Rates, k. Wh, k. W, $) Ø Pre-pay metering services Ø Home Automation features Ø RF or PLC communications Ø REX unit supports up to 3 option boards S AGE S S E ER M M O T CUS ICING R P GY ENER In-home Display Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004 72 THERMOSTAT CONTROL

Elster AMR System – Future Gas & Water AMR Elster Energy. Axis RF LAN will support RF AMR modules for Gas or Water meters or other devices ü Units will operate one-way inbound to extend battery life ü Latest REX can store up to 8 gas or water messages forwarding to Collector ü Battery powered AMR Module development has begun with Elster sister companies AMCO Water and AMCO gas metering ü Prototype field test units will be deployed later this year ü Expected commercial release in 2 Q 2006 (water) and 2007 (gas) Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster Energy. Axis Systems Experience n Development started in 2000 n Field Testing started in 2002 n 227 REX Meters and 3 Collectors n System announced commercially in July 2003 n Elster has placed hardware at over 35 utilities n IOUs n Public power n US NW, SE, International n All installed systems are running at 100% success for daily reads n Several Trial systems now being expanded n SRP announced 125 K unit expansion 10 -04 Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Test Network Showing Repeater Levels All 227 REX meters registered using 5 hops All 227 REX meters (4 Repeater levels) registered using 7 hops 40 00 ft. (6 Repeater levels) 2000 ft. Active Collector Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004 Alternate Collectors

Salt River Project Installation 470 Meters. 5 mi. 230 Apartments Single-family Residences 120 Single Family Residences Apartments 120 Patio Town homes • Verified operation with stucco over wire construction • Demonstrated highly reliable daily AMR reads Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004 Townhouses

Portland General Electric Installation Planning for Backbone System Test (approx. 1200 Meters over 12 sq. miles) Testing networks of 80 -120 REX meter/repeaters per square mile using 1 Collector per square mile grid System will Provide ability to install AMR or TOU meter anywhere within the backbone network. Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Orlando Utilities – 480 Meter Apartment Complex 5 meters in Test Shed 0. 5 mi. 2300 ft. Apartment Complex with 480 Meters Collector Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

OUC Energy. Axis System Expansion Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster System Benefits – Metering Operations Reduce or eliminate: ü Manual meter reading costs ü Meter reading errors ü Site-related personnel injuries and liabilities ü Out-of-cycle manual reads for: Ø Move-outs / Move-ins Ø High turnover areas (apartments, military, colleges) Ø Estimated Reads at hard to access / Dangerous sites Ø Bill complaints requiring read verification ü Costs of service disconnect/connect Ø Allows Virtual or hard disconnect without visits Ø Possible extension to prepay system Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster System Benefits – Metering Operations ü Reduce costs of changing metering requirements Ø Energy, Demand, TOU, RTP, LP… selectable at any time Ø Allows truly random selection of load and rate research meters Ø Eliminate site visits to change meter to match needs Ø Eliminate site visits to update TOU calendar/schedules Ø Greatly reduces cost of TOU battery change-outs ü Reduce lost revenue through early detection of meter tampering and alarms Ø Reverse energy monitoring / summed energy Ø Outage counters Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster System Benefits – Rates/Load Research ü Eliminates cost of buying special purpose meters for load research ü Eliminates expense of moving meters when a new sample is required ü Allows truly random selection of load and rate research meter locations ü Allows new rates to be developed and applied without site visits Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster System Benefits – Distribution Operations üSystem Outage and Restoration data Ø Verify non-restored power areas for crew dispatch Ø Outage / Blink counts can pinpoint faulty equipment ü System Demands Ø Since all meters measure with time synchronized demand, it is possible to summarize demands for transformers, line segments, feeders, etc. ü Voltage monitoring Ø Improve customer service in low voltage areas Ø Improve system efficiencies due to lower system losses Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Maximizing Your AMR Investment n Buy from a stable supplier that invests in R&D to support and upgrade their AMR systems n Look for systems with increasing value and functionality Advanced features Connectivity Other Utility Metering DSM C&I Residential Alt WAN A 3 Node k. WH, k. W, TOU, LP CL 320 200 A Disc 2003 Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004 Fm 12 S Water Gas In-Home CTP Display 2007

Summary of Utility Applications The Elster 900 MHz Mesh Network AMR System is designed for: n Urban and Suburban service areas… not rural n Targeted AMR with high metering costs Ø Hard to Access meters Ø High turnover areas Ø Hazardous Ø Service n areas Disconnect applications Full scale AMR - when higher functionality is needed or anticipated Ø Residential Ø Energy, Ø Load Ø Gas and Commercial metering Demand, TOU, or Critical Tier rates Profile data and/or Water AMR Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Elster Product Release Schedule § AMR system available today with: Ø Form 1 S, 2 S, 3 S, 4 S REX meters w/ RF LAN Ø Form 2 S Class 320 REX Ø Form 2 S with Integral Service Disconnect Ø Single- and polyphase A 3 Collector Meters with Internal Telephone or external Cellular WAN & RF LAN Ø MAS 5. 1 Communications Server § Form 12 S REX 2 Q 2005 § A 3 ALPHA with 900 MHz LAN Card 4 Q 04 -3 Q 05 § MAS 5. 5 – A 3 Node support for TOU Load Profile 4 Q 2005 Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004

Electricity Meters and Systems Discover the value of the diamond Proprietary and Confidential to Elster Electricity, LLC. Not to be copied or reproduced without Elster’s written consent. © Elster Electricity, LLC – November 2004