Presentation at CSIRO (Australian national science research institute) workshop focused on customer-oriented electric networks

1. Customer-oriented Networks: US Perspective
Network Transformation Roadmap (NTR) Program
CSIRO
Paul De Martini
Newport Consulting
August 11, 2015

2. 2
Customer-Distribution Network Evolution
NSP functions will evolve over time as customer adoption of DER grows
and the opportunity to enable the net value created in this transition
3 Stages of Evolution as DER Adoption Grows & Market Opportunities Expand

3. 3
NSP Opportunity: Cust Sat = Profitability
J.D. Power, 2011 Industry Quartiles Based On
Overall Customer Satisfaction
Direct link between higher customer satisfaction and operating margins
from higher authorized ROE, favorable rate case outcomes and credit ratings
Swiss Re survey showed more customers would rather buy
renewable energy from utilities than generate their own.

4. 4
NSP Challenge: Customer Trust & Loyalty
Accenture customer survey: “just 24 percent of consumers trust their utility
to inform them of actions they can take to optimize energy consumption”
Customer loyalty is important given the increasingly
wide range of options including grid defection

5. 5
Customer Engagement Evolution
Customer engagement enabling greater customer control through information and
choices, providing operational/market context for customers, collaboratively
interacting with customers, and seeking opportunities to co-create value

6. 6
NSP Services

7. 7
$-
$50
$100
$150
$200
$250
eCommerce
Mobile
Broadband Video & Data
Wireline
US Telecom Industry Transition Example
Revenue Transition
AT&T Break-up
1996 Telecom Act
Telecom revenue growth from new services leveraging modern broadband
fiber and mobile platforms and market partnerships
Personal Consumption/Person/Month
Sources: FCC, Industry Analysis and Technology Division Wireline Competition Bureau, Sept. 2010
US Census Bureau Retail eCommerce Revenue data used to estimate per adult monthly spend

8. 8
1970 1978 2000 2015 2025 2040
Cust DER Svcs
Market Enabling Svcs
Dist. Platform Svcs
Transp. Electrification
Trad. Distribution
US Electric Utility Industry Hypothetical
PURPA
Question is how utilities may be allowed to participate in the new revenue
streams that are being created in a more distributed future
Conceptual Regulated Utility Industry Revenue Composition
Revenue Transition

9. info@newportcg.com