GREENER, SAFER, SMARTER

Considerations in Building a Smart Grid Communications Network

John Eichhorn, CFO
November 2010

Agenda
Background on Tropos Whats a Smart Grid? Smart Grid Communications Strategies Smart Grid A Network of Networks Distribution Area Network Considerations Multi-use Networks Customer Highlights Q&A

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TROPOS
End-to-End Smart Grid Wireless Mesh Communications Founded in 2000 Headquarters in Sunnyvale, CA Focus Areas: - Security - Reliability - Resiliency - Scalability - Ease of use - Total Cost of Ownership - Partnerships

2010 2010 Tropos Tropos Networks, Networks, Inc. Inc. | Page 3

PROVEN TECHNOLOGY

30 patents; additional 30 pending +750 customers 30 countries

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Smart Grid: Enter Your Definition Here

Demand Response

AMI

Renewable Integration

Field Data Applications

SMART GRID

Distribution Automation

Outage Management

PHEV Management

Power Quality and Planning

Distributed Intelligence, Automated Controls, Broadband Communications

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Selecting a Communications Strategy

Traditional Approach Network per project
Build/pay as you go

Strategic Approach

SCADA AMI Distribution Automation Field data applications,

Layered communications architecture Supports for current plus future smart grid apps

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Strategic Approach = Better Long-Term ROI

Extended Utility Roles

Expected Value

Demand Response Distribution Operations & Automation

AMI

Initial Capital Outlay Meter functionality Communications infrastructure Head-end & legacy systems modifications

Source: AEP

Incremental Capital Commitment

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SmartGrid = Network of Networks

HAN Neighborhood Area Network Distribution Area Network Core Network

AMI Network

Distribution Area Network

Utility Core Systems

Demand Response

PHEV Station Power Quality Sensors Distribution Automation

Outage Management

Mobile Applications

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SmartGrid Considerations
Distribution Area Networks are challenging
Application
Reclosers Capacitor Bank RTU Motor Operated Disconnect Line Regulator Advanced Metering IDR Demand Mgmt MWM Voice MWM Data Aggregate

Latency
(msec)
10's 100's 1000's 1000's 100's 100's 100's 100's 100's 100's 10's

Bandwidth
(kbps)
<56 <56 56 <56 <56 56 <56 <56 <56 1000's 1000's

Addtl high traffic apps: Substation Video PHEV Station Mobile GIS

AVL
more in the future

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SmartGrid Considerations (cont.)

Own Capital expense High reliability Utility controlled - coverage, capacity, priority, security

Rent Low capital, pay-as-you-go Less reliable Limited visibility, no control over coverage, capacity, priority, security

Cost effective for multi-use

Limited economies of scale

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Opportunities for Greater Community Value

Efficient, on-time public transport Enhancing education

Enhancing revenue capture and improving $ visitor RE experience

Improving public safety

Mobile data access for city workers

Timely information for city visitors

Conserving resources/ reducing carbon footprint Community-wide mobile Internet access

Reducing traffic congestion and carbon emissions

Building economic development

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Funding Options
Utilitys own budget Pooling multiple city departmental budgets Grants
Smart Grid, public safety, traffic,

Bonds Performance-based contracts

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Glendale Water and Power

Nations First ARRA Smart Grid Grant Recipient

ARRA Smart Grid award - $20M; total project $51M Phase 1: smart meters - 85,000 power and 33,400 water Wireless broadband network aggregates communications for utility applications Additional smart grid applications: distribution automation, thermal energy storage, demand response Other city departments plan to leverage network

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Burbank Water & Power

Creating a Smart Grid to Manage Demand and Minimize Capital Spending

Smart meter (power and water) Power conservation through automated demand response program Delaying construction of new power generation Enables direct load management and customer curtailment Mobile access to work orders and real-time data Other city departments plan to leverage network
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Rock Hill Utilities

Single Cost-effective Network for Multiple City Services

AMR/AMI network projected payback, 78 years Customers can monitor power and water usage encouraging conservation Utility workers have easy access to information in the field, reducing repair times Mobile police and fire access information and file reports improving efficiencies

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United Arab Emirates

Efficient Management of Scarce Resources Emirate-wide

Wireless mesh network used to read 1.5 million power and water meters in urban, suburban and rural areas

Smart grid applications include AMI, realtime SCADA substation control, distribution automation, street light control, broadband connectivity for mobile workers, substation video security
Upon completion the network will cover 5,000+ square kilometers

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Avista
Distribution Automation Project to Reduce Outage Time

$42 M Spokane Smart Circuits Project includes $20M DOE grant funding; communications ~15% of budget

Project goal - faster pinpointing of faults in distribution feeder lines to reduce outage times
Tropos network for 16 substations and distribution automation (~450 DA devices)

Opportunity to extend and leverage network for AMI and Mobile Workforce

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Multi-Use Networks
Improve Efficiencies
Simplifies network management and control, reduces redundant infrastructures Mobile workers have access to current information work orders, GIS data, Improves workflow efficiency

Reduced Operating Costs

Reduces OPEX Replaces costly recurring communications costs: T-1 lines, cellular,

Deliver Broad Community Benefit

Utility applications - Smart Grid, Water, Gas Municipal departments public safety, transportation, .
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Q&A

GREENER, SAFER, SMARTER

john.eichhorn@tropos.com (408)331-6802 or ir@tropos.com

November 2010

John Eichhorn, CFO