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GreenChoiceMarketing Green Power to Key

AccountsMark Kapner

October 25, 2005

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Austin Energy

Municipally-owned electric utility

Serves more than 700,000 population

Area > 400 sq. miles

Austin

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Customers

26% of energy sold to residential

70% to commercial

4% to municipal

R Generating Sources

3 gas and oil-fired plants 1670 MW1 coal-fired plant 570 MW1 nuclear plant 400 MWPurchase 212 MW of windPurchase 11 MW landfill methane

powerPurchase 1 MW of Hydro

R Conventional Generation Mix

by MWH

Coal 35%Nuclear

30%Gas/Oil 30%

R GreenChoiceBackground

Austin’s Strategic Goal: 20% of energy from renewables by 2020

By enrolling, customer causes change in AE’s generation mix

Customer benefits from the price stability inherent in renewable energy

GreenChoice price linked to actual cost of renewable energy

TM

R GreenChoice Renewable

Sources Wind 79% Landfill methane

(17 % of MWH) Photovoltaics and Hydro

(4% 0f MWH)

TM

R WindPros and Cons

Least expensive (per kWh) Little firm capacity Transmission

adequacy risk Public acceptance-

fairly high

R Landfill MethanePros and Cons

40% more expensive than wind energy

Very high firm capacity

Public acceptance- moderate

R Solar Photovoltaics

Most expensive (about 7 times cost of wind)

Fairly high firm capacity

Public acceptance -extremely high

R How GreenChoice Works

All customers eligible Commercial customers contract for min 5

years Subscribers pay a fixed GreenChoice

charge in place of a fuel charge that fluctuates depending on market prices of coal and gas; price lock for as long as 10 years

Green Choice charge = 3.5 cents per kWh Fuel Charge is currently 2.8 cents per

kWh Commercial customers receive

recognition proportional to level of participation

TM

R Austin Energy Electric Bill

Base Rate 6.44 cents x kWh plus

Fuel charge = $0.028 x kWh or GreenChoice charge = $0.035 x

kWh

R Promotion and Marketing

Stories in utility bill inserts Ads in local newspapers Billboards Customized presentations to

businesses Speaking engagements Letter from environmental groups

to their mailing list TV commercials

R Austin Energy’s Key Accounts

High Tech, Data Centers and Gov’t Semiconductor Commercial Real Estate Schools, Hotels and Hospitals Grocery and Restaurants Communications, Light Industrial,

Mfg, Residential Hi Rise

R Corporate Champions (use > 700,000 kWh

per year) 3M Corporation

823 CongressAdvanced Micro Devices (AMD)Ambion, Inc.Apple ComputerBAE SystemsBLOCKBUSTERFisher-Rosemount SystemsFour Seasons Hotel AustinG S D & MGinny's + MeritGraeber, Simmons & CowanGreenwood TowersHabitat Suites HotelHeart Hospital of AustinHyatt Regency AustinIBM

Iron CactusKinko's La Quinta Inn & SuitesLBJS Broadcasting CompanyLive Oak DevelopmentMaudie's CafePier 1 ImportsSamsung Austin SemiconductorSolectron TexasState Farm InsuranceTexas Commission on Environmental QualityTexas Governor's MansionThe Rebekah Baines Johnson CenterTokyo Electron America

R Corporate Champion Ad Package

TV ad – features company logo Billboards List names twice per year in three

newspapers Company logo in EnergyPlus

customer newsletter GreenChoice logo available for

company’s use in its advertising

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Status (as of Oct 1, 2005)

GreenChoice launched mid-Jan 2000 Began billing April 2001 Over 6,500 residential customers

enrolled 30 large commercial subscribers 170 small businesses Green Energy = 300 million kWh/yr.