SMART METER INITIATIVE

CUSTOMER UPDATE MEETING

JULY 18, 2011

Ontario has introduced smart meters—along with a “time-of-use” electricity price structure—to help you manage your electricity costs, while helping Ontario to build a more efficient, more environmentally sound electricity system.

Between now and 2025, Ontario will replace about 80 per cent of its electricity system. There are several ways to do that:1. building new generating facilities, 2. refurbishing current facilities (where that makes economic sense),

and 3. investing in conservation and energy management tools so that will

require less new electricity generating capacity.

2

Why Smart Meters?

A smart meter is a meter that can record and report electricity consumption information automatically.

In Ontario, our smart meters will record electricity consumption on an hourly basis, and, typically, report that information via a wireless technology. Conventional (our old electromechanical) meters only

measure how much electricity is used in total from one reading to the next reading, and they have to be read manually in order to report that information.

Smart meters measure how much electricity is used and when —and will automatically send that information to your utility, via wireless and other communications technologies.

3

What is a Smart Meter?

Why is it important to know when electricity is used?

4

Knowing when electricity is used allows for the introduction of “time-of-use” (TOU) electricity rates—and that will give you a new way to manage and reduce costs.

Right now, we have very little incentive to manage our electricity use because electricity prices remain the same no matter what the time of day—simply because our meters cannot report when electricity is used.

TOU rates will vary over the day—from more expensive during times of peak demand (when we tend to use a lot of electricity) to less expensive during the off-peaks. With TOU rates, your choices about how and when you use electricity can have a positive impact on your costs.

Measure how much energy customers use and when they use it Providing customers with the opportunity to take action to better manage their hydro bill

by: - Lowering their electricity use during peak (higher cost) periods; and

- Shifting their electricity use to off-peak (lower cost) periods.

Smart metering systems will store customer electricity use information Allowing them to review their electricity use information the next day through the internet

or telephone.

Help us to better manage power outages Smart meters will inform us when an outage happens.

Reduced need to build power generation facilities As all Ontarians shift energy use away from peak periods.

Four Smart Things that Smart Meters Do

5

What are time-of-use (TOU) Prices?

6

TOU prices are prices that vary over the day—better reflecting the way electricity prices work in the electricity market.

Depending on our demand and the availability of supply in the electricity market; prices rise and fall over the day and tend to drop over night. That's why TOU rates vary—depending on the time of day, the day of week (week or weekend, and holidays) and the season (summer or winter).

With rates that vary, we'll all have an incentive to shift and/or reduce electricity consumption at times of peak demand.

When will I move to time-of-use rates?

7

TOU rates have been set by the Ontario Energy Board (OEB), and Parry Sound Power received a mandatory start date of September 2011 for time-of-use pricing for Regulated Price Plan (RPP)consumers.

Customers will receive a welcome letter which will explain the time-of-use periods and the time-of-use rates that correspond to each period in early August.

The welcome letter will also include a comparison of a billing period using RPP and TOU data, which will assist customers in understanding their consumption habits.

TOU Rates8

TOU Pricing - May 1, 2011

Based on typical residential consumption patterns, the estimated TOU bill impact is an increaseof about 3.8% on the total bill, or $3.96 per month, for residential consumers who use 800 kWhof electricity a month.

TOU Chart9

TOU Rate Comparison Chart10

Comparator Statement11

Comparator Statement12

Smart MetersOn an hourly basis, the amount of electricity you use is tracked by the smart meter on your home.

CollectorsEach day, this hourly information is sent by wireless connection or through telephone or power lines to a data collector located in your neighbourhood.

Meter Data CollectionThese collectors relay energy usage information to larger control computers operated by your utility which ensure that all the meters have been read and all the necessary information has been captured.

How Do Smart Meters Work?

13

Smart Meter Data Repository The utility then sends this information to the provincial smart meter data repository which calculates how much electricity was used during on-peak, mid-peak and off-peak hours. This energy use information will also help in the development of electricity forecasts and will help the Ontario Energy Board determine future time-of-use prices. Only authorized parties, such as your utility, will have access to the highly secure database.

Customer Information and BillingInformation from the data repository is sent back to the utility and other billing agents so it can be used to prepare bills.

How Do Smart Meters Work?14

Home Energy ManagementOver the next 12 months Parry Sound Power will be evaluating and implementing new energy management tools. These new tools will allow customers to better manage their energy use based on time-of-use prices.

How Do Smart Meters Work?15

10 Smart Meter Lane - http://www.ieso.ca/house/ The house at 10 Smart Meter Lane is an interactive web tool that

shows customers the effect of Time-of-Use (TOU) rates as they use appliances, lighting and air conditioning at different times of the day.

TOU Educational Tools16

10 Smart Meter Lane Customers can click on an appliance and select start time and

duration and the website will calculate the cost for running the appliance for the duration and time indicated. Time shifting some of your usage to evening and weekends will help you save.

TOU Educational Tools17

Time-of-Use Rates at Work - http://www.ieso.ca/smallbiz/

The Time-of –Use Rates at Work is an online tool designed to help small business owners understand how TOU rates will impact their business by getting them to build a consumption profile based on their electricity use. The resolution profiles will show the commodity costs under TOU rates and how simple conservation measures can impact their bill.

TOU Educational Tools18

Websites to learn more:

Parry Sound Powerwww.pspower.ca

Electricity Pricing and Rateshttp://www.oeb.gov.on.ca/OEB/Consumers

Smart Meter Informationhttp://www.mei.gov.on.ca/en/energy/conservation/

smartmeters/

Conservation Tipshttp://www.powerwise.ca/

Residential and Commercial Conservation Program Information

https://saveonenergy.ca/

TOU Educational Tools19

Conservation Programs20

Conservation ProgramsThere are a number of conservation programs that are available for residential customers and business owners.

Conservation programs provide you with opportunities to manage the amount of energy you use throughout your home or business. More information will be available when these programs are officially launched by the Ontario Power Authority.

Applications for the provincial conservation programs are completed through the saveONenery website:

https://saveonenergy.ca/

Residential Conservation Programs21

Coupon program for conservation products that can be redeemed at many participating retailers. By purchasing, properly installing and using the featured energy-efficient products, you will be able to manage your energy usage more effectively.

Program for the removal of old inefficient fridges and freezers. by ridding yourself of that old, energy-guzzling fridge, you could save up to $125 a year on your electricity costs. Fridges and freezers removed are disposed of in an environmentally responsible manner that minimizes material contributing to landfill.

Business Conservation Programs22

Under the small business lighting program, qualifying businesses can get up to $1,000 worth in energy-efficient lighting and equipment upgrades. Small business are entitled to additional incentives for the measures they elect to install beyond $1,000.

The Retrofit Program provides substantial financial incentives for replacing existing equipment with high efficiency equipment and for installing new control systems that will improve the efficiency of your operational procedures and processes.

Demand Response programs compensate participating industrial and commercial businesses for reducing their energy demand at specific times of power system need.

QUESTIONS?

23