Good Cents SELECT Advanced Energy Management Program Gulf

Good. Cents SELECT Advanced Energy Management Program Gulf Power Company Pensacola, Florida

Program Highlights • 7200 Current Participants • 96% Customer Satisfaction Rating • <4% Churn Rate • 2006 Goal – 3000 installations • Moving into Multi-Family segment this year

• What is Good. Cents® SELECT ? • Good. Cents® SELECT is a residential advanced energy management system that gives customers control over their energy purchases by allowing them to program their central heating and cooling system, electric water heater and their pool pump to automatically respond to varying prices.

Overcoming Pricing Program Hurdles – The “full cost” of responding to price changes is much more than the price difference. • Customers must act in order to respond. • These actions require time and effort. – Lowering the incremental “cost” of responding should increase the amount of price response. – An in-home, customer-programmed, automated energy management system lowers this “cost” that customers must bear.

Major Components Super. Stat Communications Gateway RSVP Rate

Rate (RSVP) Good. Cents SELECT Participation Charge $4. 95/Month Standard Residential Rate 8. 0 cents/k. Wh Price Per k. Wh* LOW MEDIUM HIGH CRITICAL 5. 9 cents 7. 1 cents 11. 7 cents 32. 6 cents * All prices are as of 04/01/05, excluding and/or participation charges and any applicable taxes. These prices are subject to change. Price per k. Wh Critical 32. 6 $0. 20 (Limited To 87 $0. 10 5. 9 7. 1 High Hrs/Yr) 11. 7 Standard Residential Rate 8. 0 cents

The Main. Gate® System WAN Architecture VHF Pa g ing Sign al Teleph Paging Telep Gul one Lin hone f Po Line wer Com pan y e

Why is GCS good for Gulf ? • Innovative Rate Offering (More Choice) • Operational Benefits (Peak Shaving and Valley Filling) • Customer Satisfaction • FPSC/FEECA Rules

Good. Cents Select – Program Economics • Significant Real-Time Demand Reduction! – Over 2 k. W per subscriber per critical event – 100 event-hours per year is O. K. • Event durations of 1 to 3 hours – These demand responses are exactly like quickly dispatchable capacity • CTs or Hour-Ahead Spot Market Purchases • 80 MW of available critical peak demand response will displace the need for an 80 MW bank of CTs or the need for 80 MW of hour ahead capacity purchases

Good. Cents Select – Program Economics • Load reshaping can be profit preserving – Moving consumption from higher to lower priced periods reduces revenues and reduces costs but profits can be preserved • Program facilitates the promotion of the most economically efficient electric end-use loads and technologies – Off peak end-uses of electricity become relatively more economic – sales can increase

Good. Cents Select – Program Evaluation • GCS provides other benefits too. – Customer Choice Not Utility Control • Enhances Customer Satisfaction • Reduces Policing Requirements vs. Direct Load Control • Produces Reliable Peak Demand Reductions – Requires No Utility Paid Incentive • Customers Save by Acting and Reacting • Customers Unwilling to Change Will Not Participate – GCS is Equitable • Heaviest Electricity Users are the Target Market • Capacity Savings Benefit All Users

Choice, Control, Savings • Utilizing rate and equipment menus allows customers choice over their energy purchases • Provides customers with more control over their energy bills • Customers want choice and control • Customers save up to 15% annually • Use 3. 8% less energy

Consumer Pricing Safeguards • Medium Tier Default • Gateway programmed not to exceed 87 hours of Critical Pricing Annually • 1 hour notification prior to Critical Price being Implemented (Indicator Light on T’stat)

® Good. Cents SELECT The Primary Motivators

® Good. Cents SELECT

When Do We Call a Summer Critical? • If Gulf Power interruptible load has been called • If the RTP price for an hour exceeds a certain threshold OR if the daily forecast dry bulb temperature at the Pensacola Regional Airport is 95 degrees Fahrenheit or above for that day, call critical based on consultation with System Control • If there is an expectation of an annual Gulf Power peak demand for the day

When Do We Call a Winter Critical? • If Gulf Power interruptible load has been called • If the RTP price for an hour exceeds a certain threshold OR if the daily forecast dry bulb temperature at the Pensacola Regional Airport is 32 degrees Fahrenheit or below for that day, call critical at either hour beginning 0700 or hour beginning 0800 based on consultation with System Control • If there is an expectation of an winter Gulf Power peak demand for the day

Load Reductions August 2005 – 2 Critical Days (3 hrs. ) Average Peak k. W reduction – 14 MW February 2005 – 2 Critical Days (2 hrs. ) Average Peak k. W reduction – 18. 5 MW

Load Research Results

Easy– Set it and Forget it…. . 2/2/04 No Critical 5. 0 k. W 4. 0 3. 0 2. 0 1. 0 0. 0 1 5 9 13 Time 17 21

GCS Multi Family -

Questions? ? Contact Me!!! Brian White Gulf Power Company 850 -444 -6438 BLWHITE@southernco. com