Blackout Update

In the wake of last week's energy-related emergency, we would like to give you an update on EnerNOC's progress. EnerNOC passed many important milestones during our two busiest - and most productive - days ever. Here is a quick glimpse into last week's events:

Thursday, August 14 - The Largest Blackout in Our Nation's History

As soon as the news of last Thursday's historic blackout started to spread, the EnerNOC team sprung into action. Shortly after seeing the "breaking news" icon on CNN, the company's Network Operations Center started receiving data from its remote monitoring equipment indicating that customers' backup generators were coming on line to compensate for the loss of power in their area. The team spent much of the afternoon working the phones with customers and energy providers to understand more fully the situation across the region.

At the same time, EnerNOC was contacted by television and newspaper reporters, who themselves were struggling to understand the complexities of energy delivery and explain what happened to their audiences.

Tim Healy, David Brewster, and Phil Guidice were featured numerous times on MSNBC, WHDH-TV (Channel 7), WFXT-TV (Channel 25), and New England Cable News. Guidice spent an hour on Friday morning talking about energy policies and answering listeners' questions on the nationally-syndicated public radio show "The Connection." EnerNOC's analysis appeared in newsprint in The Boston Globe, The Manchester Union-Leader, and other influential newspapers.

Numerous other reporters relied on EnerNOCs analysis and background information as they prepared their stories on Thursday night, Friday, and Saturday.

Just When You Thought It Couldn't Get Any Busier...

As Friday morning dawned, the EnerNOC staff was expecting a recovery day following the blackout, as more and more consumers were brought back on line. The relative calm ended abruptly at 7:45 a.m., however, when the operator of New England's power grid, ISO-NE, notified EnerNOC that a Demand Response Event (DRE) was beginning at 8:15 a.m. These infrequent emergency events are what EnerNOC lives for, and the company performed perfectly in responding to its first DRE, achieving a 100% service level and earning all possible revenues from the event.

How it Works.

ISO-NE calls Demand Response Events when it senses that the grid is getting close to overload or other contingencies are in effect (as they were last Friday morning in Connecticut when the main interconnect with New York State failed and the Cross-Sound Power Cable was energized for the first time, allowing ISO-NE to sell emergency power to Long Island). When EnerNOC receives a DRE notification, the company has thirty minutes to remotely start its customers' backup generators, which reduces the overall demand for electricity. This real-time reduction in system demand can be just what it takes to prevent brownouts and rolling blackouts.

While helping the region manage its energy demands, EnerNOC and its customers receive regular payments from energy service providers (by way of ISO-NE) just for participating in this emergency program. These assured payments are in addition to the actual revenue brought in during emergency events, like the one that occurred last Friday, so there's a real financial incentive to participate.

A More Reliable Energy Grid

As more and more companies sign up for ISO-NE's Demand Response program, the region's electricity grid will become more adaptive and reliable. Meanwhile, companies will start seeing backup generation less as a cost, and more as a source of income and a way to contribute to the greater community.

Any facility with a backup generator is eligible: schools, office buildings, manufacturing facilities, data centers, supermarkets, etc. EnerNOC makes participation in Demand Response programs easy by managing the entire process from start to finish.

EnerNOC passed last week's test with flying colors, making the DRE a big success for the company, its customers, ISO-NE, and most everyone in New England, where wide-scale grid failure was narrowly avoided.

A Call to Owners of Back-up Generation:

Be part of a more reliable electric system today. EnerNOC stands ready to turn your backup generators into emergency response generators.

We all learned on Thursday about the fragility of our existing electric system. While the causes of the outage are unknown, we do know that energy policies and regulations will need to change, and investments will need to be made.

In time, these changes will help improve the system.

But progress has come incredibly slowly -- 25 years have passed since we started changing the electric system regulations (Energy Policy Act -- PURPA 1978). How long do we have to wait to create a better system? Do we have the time?

One action you can take now, if you own a back-up generator, is engaging EnerNOC to join the New England ISO's Demand Response Program. In addition to making the grid more reliable, this program will provide you with two new sources of revenue - a small payment every month, for you to be available should a grid emergency occur and another revenue source when you are called on to run. One of EnerNOC's clients with 500 kW of load on their generators will receive $40,000 of new revenue in 2003 by being an EnerNOC client.

Our customers responded when the grid went down. We received a signal from New England ISO and we started-up back-up generators, reducing the load from the grid and making it easier to bring the lights back on. If a large portion of the roughly 15,000 back up generators in New England were online now with EnerNOC, the chances of a major outage hitting New England would be substantially decreased.

New England lucked out this time - with EnerNOC we won't have to rely on luck in the future.