SMART PAYMENT AT ITRON

Max GutberletSenior Manager, Smart Payment Solutions

SMART PAYMENT – WHY SHOULD I CARE ?

» Let me ask you a few questions:

• How high is your rate of outstanding receivables ?

• How much non revenue energy is lost in your network ?

• How do you plan to secure the cash-flow during your next meter rollout ?

• Do you have a volatile customer locations e.g. student homes, temporary housing ?

Smart Payment on average halves the outstanding receivables

Smart Payment meters reduce the non-revenue energy loss by disconnecting customers on tampering events

Smart Payment provides a positive cash-flow scenario when upgrading – extending your network

Smart Payment only requires a meter-to-utility relationship greatlyreducing the cost of tenant changes

SMART PAYMENT – MORE POSITIVE NEWS

» Smart Payment also improves….

• Customer satisfaction – due to the direct coupling betweencash and consumption, the level of complains about faultybilling/reading is reduced, resulting in substantial lower legalcost.

• Consumption levels – after introducing smart payment Itronmonitored an average drop of 15% in consumption comparedto pre-smart payment levels.

THE GLOBAL SMART PAYMENT MARKET

(Source: IMS Research The World Market for Gas/Elec Meters, August 2013)

In 2017, there still will be more dedicated smart payment gas

meters sold than AMI and Mobile Reading combined –

almost 12M meters

• In 2013, 5.8M dedicated electricity smart payment meters were shipped globally

• In 2017 this number will rise to 8.2M eclipsing for example cellular connected electricity meters by 25%.

• The total revenue generated by smart payment meters in 2012 was $ 593M

… and all of these numbers do not take Smart Payment over AMI into account.

ITRON PREPAYMENT LEADERSHIP

KARLSRUHE

CHASSENEUIL

CAPETOWN

MECOINDO

REIMS

BUENOS AIRES

CHONGQING

ITRON SMART PAYMENT MANUFACTURING

UNITS

FELIXSTOWE

REVENUE

ITRON SMART PAYMENT HISTORIE

1895

A prepayment gas coin meter is

developed, patented and sold in France and the

Benelux countries.

1987

KBA key-based prepayment meter first

installed in the UK. Key

customer London Electricity.

1995

TaleXuslaunched as brand name. TaleXus EXP

system launched at same time.

1997

PayGuardintroduced to the

market. First customer Norway.

1996

Gallus prepayment

launched in Italy using a variant of the TaleXus EXP

system.

2010

Eclipse Enterprise

Edition (3E) introduced

based on Eskom SA OVS product

development.

Itron provides system-based prepayment for 36 years now !

Itron is in pre-payment business for 118 years !

THIN VS THICK METERING

THIN METER• Contactor/valve, comms and metrology• Communicates very frequently with head-end• Credit and tariff information stored and calculated in system

USED• AMI mesh or cellular network with at least daily comms• Typical in North America

THICK METER• Includes clock, tariff engine and credit bank• Performs connect/disconnect operations independently• Requires infrequent or no-communication at all

USED• Unreliable/offline comms• Limited budget• Deregulated markets such as UK, • Developing countries in Africa, LatAm, AsiaPac

FORMS OF SMART PAYMENT

One-Way Smart Payment

STS CODE1234 3456 5342

4356 3526CUSTOMER

UTILITY

Two-Way Smart Payment

CUSTOMER

UTILITY

AMI Smart Payment

CUSTOMER

UTILITY

ITRON’S 2013 SMART PAYMENT METERS

ONE WAY TWO WAY AMI

EL

EC

TR

ICIT

YE

LE

CT

RIC

ITY

GA

SG

AS

Gallus iV PSC Gallus sV G AtrevaGallus iV STS

ACE9000 Range EM512i / EM514i CENTRON EM420i

PREPAYMENT IN ELEC – THE ESKOM STORY

ELECTRICITY CONSUMERS

4.5MIn South Africa Itron is playing an integral part in the rollout of prepaid electricity. Eskom’s National Prepayment Vending Platform uses the Itron Eclipse Enterprise System (3E) and enables prepaid electricity to be sold on-line and in real time to its customers.Advanced functionality enables the recovery of nonpayment and real time interfaces with the utility’s financial and CRM systems.

ONLINE TRANSACTIONSPER SECOND

250

THE 1-WAY PRE-PAYMENT ARCHITECTURE

Prepay Sys

Token Generation

Reporting and info

Cash Vending

Mobile phone

Vending

Web based

vending

Supplier Systems

Billing System

CIS

BankingSystems

Banking Services

ExtendedVendingGateway

EclipseEnterprise

Edition

STS TOKEN

MDMIEE ANALYTICS

PREPAYMENT IN GAS – THE SOCAR STORY

ENDPOINTS DEPLOYED

720K 1.7MItron’s smart payment

solution gives more than 720,000 Azerigazcustomers in the towns Baku, Ganja and rural areas the ability to manage their consumption of gas. In 2009, Itron completed deployment in the city of Ganja of 60K+ end points, giving way to a full nationwide deployment for more than 1.7M users.

COLLECTION RATE

> 96%

TOTAL PROJECT

THE 2-WAY PRE-PAYMENT ARCHITECTURE

Prepay Sys

Token Generation

Reporting and info

Cash Vending

Mobile phone

Vending

Web based

vending

Supplier Systems

Billing System

CIS

BankingSystems

Banking Services

ExtendedVendingGateway

EclipseEnterprise

Edition

MDMIEE

SMARTCARD

KeyManagementItron Security

Manager

ANALYTICS

JEFFERSON ELECTRIC COOPERATIVE

Delinquent accounts drove Jefferson to a prepayment solution in the 1990’s. Now on its third generation of technology, Itron’s cellular meters coupled with Exceleron’s solution enable Jefferson Electric Cooperative to meet its evolving prepayment needs including spot deployment, remote disconnect, and reliable communications in remote areas.

180METERS DEPLOYED TO DATE

BAD DEBT REDUCTION

50%

100%COMMUNICATIONS TEST

INCREASE IN CUSTOMER SATISFACTION

80%

PARTNERS IN NORTH AMERICA

Market Leader in number of customers supported

Significant experience with telecom prepayment service

Jefferson Electric Cooperative

Innovative, one-touch mobile payment and reconnect

Thin meter minimizes negative balance condition

Thick meter maximizes real-time information

Southern Company – Georgia Power

Progress Energy prepayment solution provider

Lowest cost provider

Duke – Progress Energy

PARTNER SOLUTION ARCHITECTURE

WHY PREPAYMENT FROM ITRON

» Experience• Itron is the most experienced prepayment manufacturer in the world !

• We have been doing this over 100 years and in more than 40 countries

• We have >3M electric and >700k gas references that no competitor can offer

» Flexible, Scalable Solution• Itron’s solution meets your utility’s unique requirements

• Size – from a few hundred sites to millions we have the solution that scales

• Architecture – one-way, two-way or online

• Business Case – if you are just building your grid and need to keep your cash in balance or if you are an established utility that wants to ensure its revenue flow

» Complete Solution• Itron provides a fully integrated solution including meter, vending and

commercial system; no need to buy meters from A and system from B and analysis from C

• Itron’s solution adapts to your utility’s unique environments, offering shared hosting, managed service and fully owned and operated systems

PLEASE VISIT THE KNOWLEDGE CENTER

» See and feel all of these products:

» Let us demonstrate to you:

• Easy vending using a mobile POS terminal

• Mobile phone smart payment for gas meters

• Worlds first STS certified gas meter

» Let us talk and see how smart payment can enable your smart metering business case.

Gallus iV PSC Gallus sV G AtrevaGallus iV STSACE9000 Range CENTRON

THANK YOU