ANNOUNCEMENT
Q: What is being announced?
A: CURRENT announces it has raised $130 million in equity investments from new and existing investors to deploy its innovative BPL solutions to create a “Smart Grid” and offer alternative “third wire” broadband communication services. A Smart Grid will enable electric utilities to improve power grid efficiency, reliability and security. The funding will be used to support the TXU BPL network build and other strategic initiatives. In December 2005, CURRENT announced an agreement with Texas-based TXU Electric Delivery to create the nation’s first multipurpose BPL network, transforming TXU Electric Delivery’s power distribution network into the nation’s first broadband-enabled Smart Grid.
New strategic equity investors are EarthLink, Inc., which will serve as a retail provider of CURRENT’s broadband services; General Electric Co.; Sensus Metering Systems Ltd; and TXU Corp. They join existing equity investors Duke Energy Corporation, EnerTech Capital Partners, Goldman, Sachs & Co., Google Inc., Hearst Corporation, and Liberty Associated Partners, LP, which is an investment partnership between Liberty Media Corporation and the Berkman family.
Q: How will this round of funding be used?
A: This latest round of funding will support the TXU BPL-enabled Smart Grid network deployment as well as other strategic business initiatives as CURRENT continues to expand its presence worldwide.
Q: Will EarthLink be a retail Internet provider for CURRENT?
A: Yes, EarthLink will be one of several retail providers of CURRENT’s broadband service. In addition to using retail channels, CURRENT will market broadband services direct, via its own brand.
Q: When will CURRENT’s next deployment deal with a utility be announced?
A: CURRENT is focused on widespread market deployment in conjunction with investor-owned, municipal-owned and cooperative-owned utilities. As interest in Smart Grid solutions grow, we are engaged in an increasing number of discussions with numerous utilities worldwide.
BACKGROUND
Q: What is a “smart” electric grid and why do utilities need one?
A: Electric distribution networks have changed very little in the past 100 plus years. Utilities continue to dispatch armies of meter readers to tabulate monthly energy consumption from backyards across America. When power goes out, the only way most utilities are aware of this fact is when customers call, and even then cannot pinpoint where the outage or outages have occurred. Utilities can only verify that power has been restored by having utility crews physically survey the outage areas on an ongoing basis to determine whether the lights have come back on.
The Smart Grid changes that. Specifically, it refers to the application of smart computing (information technology) and digital communications capabilities overlaid on the electric distribution network, enabling utilities to have visibility into their end-to-end networks. The technology turns every point in the existing electric distribution network into a potential information source, able to instantly feed performance data back to the utility. Simply put, it provides utilities with the intelligence required to implement real-time, self-monitoring and ultimately self-healing networks. Critical points of management include meters at businesses and residences, transformers which service on average 6-8 homes and which function to shift power from medium voltage to low voltage, and other electric network distribution points. The Smart Grid will evolve so that utilities can empower end customers to proactively manage and control their energy consumption based on real-time data. Development of such a capability is mandated in some states and urged in the Energy Policy Act of 2005.
Electric Power Research Institute (EPRI) estimates that power outages and power-quality issues cost the U.S. economy between $119 billion – $188 billion annually. Indeed, the projected loss arising from the 29-hour blackout that hit the northeast in 2003 affected 50 million people and led to $4 – 6 billion in lost economic activity. New York City alone reported economic losses of about $1.05 billion (that’s $36 million per hour). Smart Grid technology improves power flow effectiveness and reliability, addressing electricity problems before they can grow into brownout and blackout situations.
Approximately $270 billion is spent annually in the United States for electricity, with demand expected to grow 40 percent by 2020. A Smart Grid can reduce energy demand and the need for more power plants, while improving reliability. EPRI projects that Smart Grid-enabled distribution could reduce electrical energy consumption by 5 percent to 10 percent, carbon dioxide emissions by 13 percent to 25 percent, and the costs of power-related disturbances to business by 87 percent.
There also are national security considerations. Our government has identified the electric grid as a potential terrorist target, and CURRENT® Smart Grid Services offer a comprehensive response to the need for greater security of these vital networks. These services can include security elements such as video surveillance and advanced monitoring capabilities to immediately detect malicious attempts to disrupt power service.
Q: What are the capabilities of CURRENT’s Smart Grid technology?
A: CURRENT® Smart Grid Services will enable electric distribution utilities to improve the efficiency, reliability and security of the core electric network in a cost effective manner. Key services include the following:
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Automated outage detection and restoration: When power goes out in some portion of the distribution network, utilities can dispatch crews instantly to the precise location(s) of the outage instead of waiting for phone calls from affected customers and then trying to assess the magnitude of the impact. Additional capabilities will enable the remote capability to connect and disconnect electrical service through BPL-enabled meters, improving efficiency and customer service to the home or business.
- Automated meter reading: Automated meters can now record usage by time of day (for variable time pricing) and generate a wealth of energy consumption information essential to effective real-time management of the electric grid.
- Power quality monitoring: Current and voltage monitoring improves power quality, thereby minimizing the impact of electrical service on sensitive electronics equipment within the home or business. Additionally, this provides preventive maintenance opportunities based on real-time data, including predictive fault detection, to increase reliability.
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More effective demand-side management/direct load control programs: On days when electricity demand is at its highest (typically during the summer months), a utility can manage its “peak loads” to avoid generating or purchasing additional energy when costs are at their highest, or even avoid constructing new power plants.
Q: How is CURRENT Broadband® differentiated from other broadband services?
A: CURRENT’s alternative broadband offering has several important differentiating features that justify its 95 percent customer satisfaction rate:
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Ease of installation: By using existing electrical wiring as a built-in home or business network, CURRENT Broadband® service is as easy to use as plugging a power cord into an electric outlet: plug it in and turn it on. It’s that easy – no router or scheduling appointments and waiting for an installer to arrive or depending on technical help. It is much simpler to install than DSL- or cable-based solutions.
- Ubiquity: Customers can access their broadband service from any outlet on their premises – not just the one room where the cable or telephone company installed the modem. CURRENT’s solution also supports home wireless networks based on the same WiFi standards that consumers use in conjunction with existing cable and DSL services.
- Symmetric connection: BPL technology enables the delivery of high-speed, two-way broadband. CURRENT Broadband® customers receive the same high-speed connection whether receiving or sending data. Internet usage is shifting quickly from an experience dominated by downloading content to one that reflects as much content uploading as downloading. Two-way video for video chat, emails with large attachments, video messaging and video calling, interactive multi-player gaming, photo and video uploading as well network-based storage are changing the way we use the Internet.
- Future applications: For competitive reasons, CURRENT is not yet sharing all of its intended future offerings. Nonetheless, CURRENT’s network connects customers to the online services they demand and allows them to literally plug right in as new broadband applications are created. CURRENT is committed to delivering to the market high value broadband services which exploit the technological advantages of its solution. CURRENT is actively exploring a host of service possibilities many of which will be integrated into its service bundles.
Q: What is CURRENT doing with TXU?
A: In December 2005, TXU Electric Delivery, a subsidiary of TXU Corp., and CURRENT announced an agreement to transform TXU Electric Delivery’s power distribution network into the nation’s first broadband-enabled Smart Grid. Through Broadband over Power Line (BPL) technology overlaid on the existing electric distribution network, this network will serve the majority of TXU Electric Delivery’s service area, including more than two million homes and businesses in the Dallas-Fort Worth area and other Texas communities.
This will be the first multipurpose Smart Electric Grid created by deploying a single BPL network which can be leveraged to enhance electric power delivery and to enable commercial broadband communications services, answering the federal government call for a 21 st-century electric network as specified in the recent passage of the Energy Policy Act of 2005 and increased access to the Internet for all Americans.
Since announcing the partnership, CURRENT and TXU Electric Delivery have worked closely together in planning for the network deployment. Network and construction planning and many other activities have been underway since the end of last year. Network and service turn up are scheduled for late 2006.
Q: Where else does CURRENT have BPL networks?
A: CURRENT operates the nation’s largest BPL deployment in Cincinnati, Ohio with Duke Midwest (formerly Cinergy) offering homes and small businesses high-speed, symmetric broadband service and high-quality VoIP. There are plans to expand this footprint elsewhere in the utility’s customer territory which includes parts of Indiana, Kentucky and Ohio.
CURRENT also has ongoing trials with forward thinking utilities in California, Maryland, and Florida as well as multiple countries.
Q: What’s the story with CURRENT’s BPL solution and amateur radio spectrum?
A: CURRENT’s Cincinnati network is the largest BPL deployment in the United States, and the company operates several other BPL systems as well, but has never had an interference complaint by a spectrum license holder. CURRENT has carefully managed its development efforts to avoid causing interference with all licensed radio systems, amateur radio included; however, the company realizes that this is a problem for other BPL solutions. The Amateur Radio Relay League (ARRL) – the chief ham radio trade group – has publicly recognized that CURRENT’s technology is “benign” and does not create interference issues.
