PRESS RELEASE

Energy Curtailment Specialists featured as speaker at FERC/NARUC Collaborative
Buffalo, NY & New York, NY , July 18, 2007

Special session held at NARUC 2007 Summer Committee Meetings to discuss demand response initiatives

On Sunday, July 15, Energy Curtailment Specialists, Inc. (ECS) participated as one of the featured panel speakers at the Demand Response Collaborative Meeting between Federal Energy Regulatory Commission (FERC) and National Association of Regulatory Utility Commissioners (NARUC), which was part of NARUC’s 2007 Summer Committee Meetings, being held July 15 to 18 in New York City.

The Collaborative addressed the coordination of federal and state demand response policies, such as the regulatory barriers to increased customer participation in demand response programs identified in a report, “Assessment of Demand Response and Advanced Metering”, which FERC issued to Congress, last August, in response to a mandate in the Energy Policy Act of 2005.  One such barrier is the disconnect between retail prices regulated by the states and the wholesale prices regulated by FERC.

Paul Tyno, ECS’ executive vice president and director of business development, presented the value proposition of demand response for utilities and customers as well as perspectives of sponsors and participants on successes and failures in the demand response arena.

Other speakers included David Lawrence, manager of auxiliary market products at New York Independent System Operator (NYISO), Michael Caufield, energy regulatory affairs specialist at Alcoa, the world’s leading producer of aluminum and a member of ECS’ demand response programs, James Tracy, the chief financial officer of Sacramento Municipal Utility District and Christopher Smith, market research analyst for Tennessee Valley Authority.  FERC Commissioner Philip D. Moeller moderated the panel.

State commissioners were present including those from Texas, Georgia, New Jersey, Connecticut, Delaware and Idaho.

According to FERC Commissioner Jon Wellinghoff, demand response is a necessary component of an efficient market for electricity; without it, consumers will not realize the full benefits of a competitive electric system.

Only 5 percent of the nation’s electricity consumers use some form of incentive-based demand response program or time-of-use rates, and advanced metering has a penetration of only 6 percent of installed meters, according to FERC’s report.  It also stated that, nationally, the total potential of demand response resource contribution from existing programs is estimated to be about 37,500 megawatts, equivalent to building more than 40 new average-sized power plants.

“On a state and federal level, in both regulated and deregulated markets, we need to expand the thought process, further incorporating proven opportunities such as demand response into the energy pyramid alongside efficiency and conservation,” said Mr. Tyno.

Demand response is drumming up more support as former public service officials get involved, like William Flynn, former chairman of New York State Public Service Commission and past president of New York State Energy Research and Development Authority, and Paul Afonso, former chairman of Massachusetts Department of Telecommunications and Energy (now Public Utilities Commission), who both joined ECS’ advisory board this year.

At energy conferences around the country in recent months, there has even been talk of demand response becoming labeled as the “fifth type of fuel” or a renewable resource.

“The greenest megawatt may be the one we don’t use,” said Mr. Tyno.