June 15, 2011 Audrey Zibelman's presentation from America’s Sustainable Future: How U.S. Cities Are Making Energy Work, an invitational conference of public-private partnership efforts from U.S. cities pursuing innovative energy management and smart grid initiatives. The assembled leaders in industry, research and policy-making will explore the diverse energy strategies emerging in Philadelphia and across the United States. “We’re really looking forward to both learning from the great examples set by other cities represented in the conference, and showing off the groundbreaking work happening right here in Philadelphia,” says Laurie Actman, Viridity Energy’s director of strategic partnerships and public policy. “With smart ideas and smart policy, we should be able to build support for smart grid projects and microgrids at the federal, state and local level.”"Energy technology is changing at such a rapid pace, it's crucial to examine who's doing it right in smart grid and microgrid projects all around the country," says Eugenie Birch, Penn IUR co-director. "With the right policy moves—which we'll be exploring at the conference—Philadelphia can be a national leader in energy innovation," noted Susan Wachter, Penn IUR co-director.

1. The benefits of smart grid technology for buildings, Cities and sustainability

3. March 2011 FERC ruling: a MW generated is financially equivalent to a MW conserved NEGAWATT = MEGAWATT

4. Consumer-led demand reductions lead to lower power prices—interesting politics2

5. The Existing Grid is a “one-way street” Supply Demand Industrial Local Utility Residential IPP Transmission Substation Generators Commercial Distribution Substation Renewables The grid must continuously balance production and consumption 6/10/2011 3 Highly Confidential

6. RTO/ISO Markets Serve in Excess of 80% of North American Power Customers

7. 11/04/2009 Highly Confidential 5 Congestion, Grid Reliability CRITICAL CONGESTION AREA

9. Distributed storage

10. Controllable loadClusters of these distributed resources organized in microgrids 4/26/2011 6 © 2011 Viridity Energy Inc. All Rights Reserved

11. Traditional Demand Response is a Directed Action to Minimize Stress on the Grid RTO MarketsGrid Operators Wholesale Physical MarketsRegulatory agency: FERC Generation Transmission Buy Distribution Utilities Retail Energy Suppliers Sell Load Control Retail MarketsRegulatory agencies: states 7 7 © 2011 Viridity Energy Inc. All Rights Reserved 4/26/2011

12. Viridity Energy’sDemand Optimization (vs. Traditional Demand Response) integrates controlled load into real time market operations as a virtual power resource (a closed loop system) RTO MarketsGrid Operators The Wholesale Markets Establish the Real Time Price Buy Generation Transmission Sell Distribution Utilities Retail Energy Suppliers The Value of Customer Energy Resources are Enhanced when Integrated into the Real Time Dispatch Sell 8 8 © 2011 Viridity Energy Inc. All Rights Reserved 4/26/2011

13. Leveraging a Building for Energy Savings and Revenues Efficiency - Reduction of KW consumption per square foot over all hours Demand Response – The ability to reduce consumption in response to a utility request Dynamic Demand Optimization – The automated and continuous active management of building load from the power grid in reaction to real time prices while ensuring that tenant comfort, sustainability and productivity concerns are addressed. 1/20/2010 Confidential

14. Economic Value to the Market 10

16. Heavy Oil

17. Natural Gas$5 million = direct payout to DSR instead of additional generation dispatched at higher price. $650 million = indirect savings per day to system during the week from DSR through lower marginal clearing prices Source: PJM 6/10/2011

18. Drexel UniversityHagerty Library, Law Library, Law School(6% of Whole Campus Load) Total Reduced - 622.83 kWh Estimated Revenue -$101.28 Projected if Whole Campus Optimized - $1,838.19 *This is a representative weekday during the operational period of June-July 2010. Reduction was achieved with a two-degree change.

19. Highly Confidential 13 Viridity/NYC Smart Grid 6 Identified Buildings, 4 TBD Control Center Middleware Viridity Energy’s Network Operations Center Conshohocken, PA VPowerTM 2 Buildings in Long Island City CitiGroup La Guardia Community College Lower Manhattan 2 Rudin & 1 Verizon NYCEDC 3 Bldgs Brooklyn Cruise Terminal, Brooklyn Army Terminal, Brooklyn Meat Terminal New York ISO Control Center 1/7/2010

21. SEPTA generates new income

22. Region’s power grid more reliable, efficient, green© Viridity Energy 2010

23. Place-Based ‘Smart City’ Efforts -Cities are where Climate policy will be achieved Austin Pecan Street Project neighborhood smart grid Ft. Collins FortZednet zero energy district Chicago/Charlotte Virtual Microgridsmart grid aggregation of commercial buildings Philadelphia’s assets: Greenworks Philadelphia ARRA EnergyWorks Program PECO Smart Grid/Act 129 GPIC New York’s assets: PlaNYC Greater Green Buildings Plan NYSEEC NYSERDA ConED 1/20/2010 Confidential

24. A smart grid vision for the future Pro-sumers: Universities, hospitals, skyscrapers, and corporate campuses that use new technologies and information to make smarter, cost-effective choices about their energy use. MicroGrids: Sites that combine distributed generation, onsite storage, and optimized energy use to improve energy security and reduce electricity bills. A Sustainable Grid: through new technology and consumer action, a transmission network that delivers power more securely, more inexpensively, and more environmentally friendly. 16

25. Thank You.