April 2007

BTL Mark: Resolve interoperability issues & increase buyer confidence
BACnet Testing Laboratories

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Bruce McLeishEMAIL INTERVIEW Bruce McLeish, Leighton Wolffe & Ken Sinclair

Bruce McLeish, Senior Vice President of Products and Pricing, Constellation NewEnergy

Bruce McLeish is Senior Vice President of Products and Pricing for Constellation NewEnergy, Inc., a subsidiary of Constellation Energy (NYSE:CEG). Mr. McLeish oversees the development of energy management products for businesses in both regulated and deregulated states, as well as management of all capabilities needed to support product sales and delivery.  Mr. McLeish joined NewEnergy in September 2000, bringing knowledge garnered from over twenty years of experience in the energy industry. His proficiency in wholesale and retail energy markets, risk management, and the evolving regulatory structure contribute to his key role in structured wholesale transactions and retail product development for Constellation NewEnergy.

Leighton WolffeLeighton Wolffe, Principal, Wolffe Technology Consultants

Leighton Wolffe is active advancing initiatives and deployment of new technologies in the Energy, IT, and Building Integration industries with expertise in facilities and energy management systems, commodity strategies and enterprise level applications. Mr. Wolffe’s recent activities include working with private equity firms evaluating and assessing investments opportunities in companies involved in leading edge grid integration and distributed energy technologies, and working with manufacturers and developers of intelligent building systems to create and implement national sales and marketing strategies. Currently, Mr. Wolffe is serving as Principal Consultant to Constellation NewEnergy Inc., a subsidiary of Constellation Energy (NYSE:CEG).


Market Conditions Drive Grid Integration

Constellation Energy has chosen to be a Platinum Sponsor at GridWeek in order to use this forum to help advance our customer choice agenda and the common goals of renewable energy, new energy technologies, and distributed resources.

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Sinclair:  I understand that Constellation Energy is going to be a Platinum Sponsor at GridWeek. What can you tell us about Constellation and your participation there?

McLeish:  Constellation Energy is the largest competitive retail electricity supplier in North America. We are active in every deregulated market across the continent, and a leading advocate for market solutions to meet future energy infrastructure needs.

In the United States, some states have determined that major improvements to the energy infrastructure can best be accomplished through the old utility monopoly business model, with ratepayers bearing all the risk of capital associated with building the infrastructure.

We believe the market-based competitive business model should also contribute to meet energy infrastructure needs, particularly given our society’s growing awareness of the impact of global warming and other environmental concerns. Constellation Energy has chosen to be a Platinum Sponsor at GridWeek in order to use this forum to help advance our customer choice agenda and the common goals of renewable energy, new energy technologies, and distributed resources.

Sinclair: That sounds interesting. You say your agenda is customer choice. How does that impact improving the energy infrastructure?

McLeish:  Customers that have been active in deregulated markets are beginning to understand that they need to think strategically about their energy needs. They can’t just roll the dice every year and deal with the consequences of a Hurricane Katrina on the gas market, or tension in the Middle East on the oil market and the subsequent impact on electricity prices. This is causing customers to make decisions that give them greater control over how electricity is generated, distributed, and used. These decisions are leading to the creation of new energy technologies, more distributed resources, and construction of more renewable resources.

Sinclair: Can you tell us more about distributed resources and these new technologies?

McLeish:  Think of distributed resources as the opposite of the model consisting of large, central power stations with large transmission and distribution systems delivering the power to end users hundreds of miles away. Distributed resources are smaller generators located near the load. Locating the generation near the load results in much less energy loss over the wires. In many cases these distributed resources are being constructed by end users right at their facilities. They may be small gas turbines, or if the customer wants to be shielded from volatile fuel prices, a renewable power source, such as a wind turbine or solar panels. The key point is that the end user is making the decision about their supply choices. The opportunity to make these decisions is what leads to the creation and use of new technologies. A case in point is the expanding use of load control and demand response. This is a particularly fast moving area of our business, one which is now being recognized by the operators of our power grids as a key component to ensuring reliability and meeting peak demand.

We recently engaged Leighton Wolffe to work with our Energy Technology Services business unit to help integrate and deliver our Demand Response applications and technologies.

Wolffe:  I’m pleased to be working with Constellation to provide these integrated solutions across the entire energy chain. We are working directly with customers and with systems integrators to provide green and renewable energy resources such as wind, biomass, solar, fuel cells, and other forms of efficient local generation to satisfy supply side opportunities. We also leverage existing building systems with demand response applications and technologies for maximum savings and efficiencies. In those markets that offer forward capacity and demand response incentives, we enroll customers to curtail their load during peak demand events and they receive payments from us based on their KW commitment.

Control Solutions, Inc More significantly, Constellation Energy offers supply options and information technologies that provide day ahead and real time market pricing signals that then allow customers to help shape their operating conditions and control strategies. This is a unique offering in which we can provide the business decisioning tools for both supply and demand. This is a powerful combination that results in significant energy savings and reduction of risk. We view this as the future in terms of successful relationships between creative energy providers and sophisticated consumers.

McLeish:  We happen to be presenting a great example of this integrated approach at GridWeek. Our “Success Story” customer is the Washington Suburban Sanitary Commission (“WSSC”). This state agency has multiple locations throughout Maryland for treating and transporting water to all of its residential and commercial customers. They use a lot of electricity, about 25 MWs around the clock.

In addition to our providing demand-side measures such as efficiency upgrades to pumps, motors, and HVAC systems, they asked Constellation for green and renewable supply options. WSSC recently signed a 10-year agreement that allowed us to purchase the output of the Forward Wind project in Somerset County, PA, a 30 MW facility being constructed about 15 miles across the Maryland border.

The structure of the agreement with WSSC enables the agency to achieve two goals: 1) a long-term electricity purchase for 30 percent of its needs, which is a hedge against any increases in price over the period; and 2) purchase and use of the same amount of renewable power over that term. By committing to a long-term contract, WSSC enabled the new wind plant to obtain financing and to be constructed in a nearby area. There are many positive benefits for WSSC customers, not the least of which is clean renewable power and improving local air quality.

Wolffe:  In addition to our participation at GridWeek, Constellation Energy will also be a Platinum Sponsor at BuilConn at which we will continue to present our vision of energy responsive buildings, and how Systems Integrators can participate in our demand response programs.

McLeish:  There are many challenges to meeting our future energy requirements. Competitive markets create the opportunity for all end users to participate in meeting those challenges head on with creative solutions, such as the complete package of solutions we‘ve been able to implement for the WSSC.


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