EAM Roadmap to Value Driving Value in the Real-Time Enterprise EEI/AGA TAC Meeting, October 23, 2007 Henry Bailey, Vice President – Industry Solutions

US Utility Industry Drivers & Implications Constrained Revenue Growth Downward Margin Pressure Shareholder Value Challenge Validate EAM Strategy Growth & Market Share Aging workers and assets Slower growth rates Higher growth expectations Increasing M&A activity Government Regulations Energy Policy Act Sarbanes-Oxley Deregulation Emissions FERC, NRC and NERC High Capital Costs Infrastructure reliability Management of emissions Rising fuel costs Changed Market Structure AMI Initiatives Deregulation Competition Supply chain risks

Growth & Market Share

Aging workers and assets

Slower growth rates

Higher growth expectations

Increasing M&A activity

Government

Regulations

Energy Policy Act

Sarbanes-Oxley

Deregulation

Emissions

FERC, NRC and NERC

High Capital Costs

Infrastructure reliability

Management of emissions

Rising fuel costs

Changed

Market

Structure

AMI Initiatives

Deregulation

Competition

Supply chain risks

Industry Value Network for Utilities Focus area: EAM USA / Canada Energy East SCE PG&E Energen Europe EDF E.ON Electrabel APJ CLP GNP NCGC Shanghai ASUG / DSUG SAP Research

USA / Canada

Energy East

SCE

PG&E

Energen

Europe

EDF

E.ON

Electrabel

APJ

CLP

GNP

NCGC

Shanghai

ASUG / DSUG

SAP Research

Where to focus? Peer Group Average Peer Worst Peer Best Utility C 10% -9% Utility A Revenue Growth 5% Utility E Utility A 0.76 2.60 Operating Income Per Employee 1.76 Utility C Utility B Asset Utilization 82% 60% 74% Utility D Utility B Days Sales Outstanding Utility A 65 days 21 days Utility C 0.05M 0.12M 0.2M 47 days Every 1% increase in revenue growth = $1M in operating income Every 1% improvement in CoO = $6M in operating income Every 1% improvement in Asset Utilization = $13M in freed up capital Every day of improvement in days sales outstanding = $2.1M in free cash flow What Moving the Needle Could Mean to a $750M Revenue Electric Utility CoO 1 as a % of Revenue

Every 1% increase in revenue growth = $1M in operating income

Every 1% improvement in CoO = $6M in operating income

Every 1% improvement in Asset Utilization = $13M in freed up capital

Every day of improvement in days sales outstanding = $2.1M in free cash flow

EAM Benchmarking Survey End-to-End Process Benchmarking Enterprise Asset Mgmt Customer Care Supply Chain Mgmt Human Capital Mgmt Financial Mgmt Total Cost of Ownership 10+ additional surveys http://www.asug.com

End-to-End Process Benchmarking

Enterprise Asset Mgmt

Customer Care

Supply Chain Mgmt

Human Capital Mgmt

Financial Mgmt

Total Cost of Ownership

10+ additional surveys

Enterprise Asset management – Value Discovery Source: ASUG Utility Benchmarking Schedule attainment 87% 34% Correlation between Maintenance 41% 13% Program and Compliance performance High performers have a more productive utilization of time across different functions Traveling Planning & Scheduling Reliability Functions Repair & Preventive Maintenance Analyzing Readings Troubleshooting Looking for Materials Reporting 48% 70% KPIs % allocation of time in maintenance function

Top Performer Asset Management Impact Allows assets to be managed & replaced more efficiently Improves business processes for asset management Analytics in scheduling Notifications Regulatory reporting Maintenance costs reduced by 50% Procurement costs reduced by 30% “ Ranked #2 in top 40 Energy Companies” Utilities Fortnightly, 2007

Allows assets to be managed & replaced more efficiently

Improves business processes for asset management

Analytics in scheduling

Notifications

Regulatory reporting

Maintenance costs reduced by 50%

Procurement costs reduced by 30%

Call to Action Benchmark Current Performance 1 Execute a Value-Based Deployment 3 Identify Value and Further Align IT with Business 2 Measure Value Obtained and Market Success 4