1 - Regulatory barriers to Smart Metering, John Harris, VP Regulatory and Governmental Affairs, April 13, 2010

Considerations for Economic Analyses of Smart MeteringJohn Harris, Vice President, Head of Regulatory Affairs

Oct-10 2

The Problem:

+Benefits of smart metering

– are dispersed and

– longer term

+The initial investment costs

– are concentrated and

– short term

Oct-10 3

An Accurate Economic Analysis of Smart Metering

+Must be broad in scope:

–Market actors and society as a whole

–Cognizant of future requirements

–Policy goals (not exclusively retail markets)

Oct-10,

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Oct-10 5

Smart Metering: Value for All Stakeholders

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Improved energy use visibility ++ ++ ++ + + +

Accurate billing +++ +++

Enhances customer services / switching + ++

Better debt management ++ ++

Improved outage & demand management + ++ ++ + + +

Improved analytics ++ +++ ++ ++ +

Improved load forecasting +++ +++ ++

Improved investment decisions + +++ +++ ++ ++

Energy efficiency, CO2 reduction + + + ++ +++ ++

Benefits

Oct-10 6 - Landis+Gyr - Insert name of presentation and author at Insert ribbon (Header&Footer)

Smart Metering addresses all 3 Pillars ofEuropean Energy Policy:

+ Competitive markets

– Purpose of the 3rd Package

+ Sustainability

+ Security of supply

Opportunity Costs:

The Status-Quo and a Business-as-usual scanario cannot be the Baseline!

+ The costs of not deploying smart metering should also be considered!

+ Future requirements of the grids should also be

included in the calculations

No smart metering „on the cheap“!

Oct-10 7 - Landis+Gyr - Insert name of presentation and author at Insert ribbon (Header&Footer)

Oct-10 8

Multidimensional Axes of Time/Stakeholder interests

Conclusion:

Holistic Economic Analysis is necessary:

– Broad value chain, market actor and societal analysis

– Longer time frame

– Opportunity costs of non-deployment

Oct-10 9

Thank you

Oct-10 10