SCOTTMADDEN, INC. | 5 CEO THEMES: SEEKING GROWTH Different strokes for different folks: Companies respond with growth strategies in a low energy demand growth environment. Sectors Selected Company Comments Electric Utilities: Explore Grid, Regulatory, and Gas Options • Aggressively pursue re-regulation of asset base due to the state of competitive generation (or move the “bright line” between state jurisdiction and wholesale markets) • Invest in emerging technologies and grid modernization: AMI, DERs, microgrids, EV charging infrastructure • Expand presence in gas sector through acquisition, pipeline investments • Pursue policy fixes and wholesale market rule changes to address imperiled nuclear, fossil generation, DG cost structure • Transition from coal-fired generation to gas-fired, renewables, DR, and EE • Invest in “what’s next” for customers (e.g., mobile interaction, commercial rooftop solar, water and energy services for C&I customers) • Expand into services and behind the meter Electric Delivery Companies: Engage Customers and Invest • • • • IPPs and Merchant Generators: Position for Tighter Markets • Deleverage by increasing available capital, including asset sales • Continue retiring coal units and units that do not clear capacity auctions, while taking advantage of revenue opportunities in renewables • Leverage long heat rate positions when markets tighten and scarcity increases • Decrease hedges gradually to act on price volatility and price appreciation in forward markets • Lobby against hybrid market designs Improve customer satisfaction by offering tailored solutions to help them save energy Invest in AMI, EE, and customer programs Expand communication with customers (change management) Maintain capex in core business while investing in new business opportunities and divesting those that fail to be predictable/profitable • Remain focused on reliability and workforce safety