Investor Presentation

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Intelligent Energy Demand Management Solutions

• Investor Presentation

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What We Do

• Intelligent Energy Demand Management Solutions
• Peak Demand Management
• Automated predictive shedding of electrical loads
• Integrated Building Controls and Management
  (coming)
• Enabling technology for Demand Response (DR)
  programs
• Unique capability to serve Industrial markets
• Largest individual energy consumers high costs
  motivated buyers
• Help customers achieve significant cost savings
  without disrupting production

3
Company Background

• Headquartered in Seattle, WA
• Highly differentiated technology with extensive
  customer traction
• Technology originated in Sweden in 1994
• Strong and innovative technology
• Operated as Engineering house little/no sales
  resources
• U.S. Management led Turn-around in 2004
• New U.S. team and operation gained control of
  technology
• Focus on key Industrial verticals in U.S.
  creating significant momentum
• Now uniting with European technology resources
• via small acquisition of Swedish sister-company
  housing key technology personnel
• Also brings complementary technology for
  Commercial markets and attractive revenues
• Seeking 5 million in first institutional capital
  round

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Business Momentum

• Strong base of reference-able customers in key
  verticals
• Compelling customer value proposition
• Turn-key, easy-to-install, easy-to-connect
  solution
• Can achieve demand control without impacting
  production, quality, comfort
• Create ongoing reduction of 10-40 in peak
  energy demand charges
• Payback period of 12-24 months (often much less)
• Poised to scale
• 2006 Revenues 1.0M U.S. 4.4M European

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Demand 101

• Peak demand addresses instantaneous vs
  cumulative demand
• Peak demand is based on average load (kW) during
  an interval
• Highest 15,30 or 60 minute interval sets monthly
  charge
• Keeping the peak lower creates monthly savings

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Demand 101 (Continued)

• Demand charges typically 35 of overall electric
  bill
• Energy Director lowers demand (kW) by 10 40
• Reducing demand has significant effect on overall
  bill
• Safely reducing demand in automated fashion
  enables demand response participation

lower peak demand by 20
kW
kW
kWh
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Case Study Rochester Metal Products

• Demand Control
• Rochester Metal Products Rochester, IN
• Iron Castings Foundry
• Direct, coordinated furnace load reduction to
  reduce kW demand
• Peak reduction project by demand shifting
  5000kW (24) savings
• Project cost 80K
• Annual savings 723K
• Turnkey project payback 2 months

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Case Study San Jose Mercury News

• Demand Control
• San Jose Mercury News - San Jose, CA
• Large Newspaper Facility
• Direct reduction of HVAC loads during demand
  spikes no decrease in building comfort
• Peak reduction project by demand shifting 600kW
  (20) savings
• Project cost 78K
• Annual savings 73K
• Turnkey project payback 13 months

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Case Study Gallo Fresno

• Demand Response
• Gallo Winery - Fresno, CA
• Large Winery Facility
• Direct, automated load reduction based on
  customer-initiated demand response command
• Demonstrated load reduction 7000kW
• Project cost 252K
• Utility incentive 100 of project costs paid by
  PGE
• Turnkey project payback instantaneous

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Demand Management vs. Demand Response

• Definition of Demand Management Understanding
  where, when and why demand spikes occur and
  taking ongoing, automatic measures to reduce them
  or shift them with minimal impact on facility
  operations.
• Definition of Demand Response Event-based
  changes in electric usage by end-use customers in
  response to changes in the price of electricity
  over time, or to incentive payments designed to
  induce lower electricity use at times of high
  wholesale market prices or when system
  reliability is jeopardized.

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Market Pain

• Extreme industry concern about meeting peak
  energy demands
• Rising consumption, constrained distribution
  infrastructure, rising costs
• Spurring Utilities towards more aggressive
  demand-side management
• Movement to add higher rates during periods of
  peak usage
• Incentives for customers that can reduce demand
  upon request (Demand Response)
• Demand management cheaper and cleaner than
  building new plants
• Industrial users hit particularly hard
• Largest individual energy users peak demand
  charges significant
• Shedding loads a difficult tradeoff if
  jeopardizes production/quality/safety
• Few alternatives to enable cost reduction or
  participation in DR initiatives
• Motivated market needing a compelling solution

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Addressable Market

• Meeting the complex needs of Industrial
  environments

• Note Figures above address demand management
  opportunity only, which differs from addressable
  market for industrial demand response
• Powerit Solutions also capable of addressing
  Commercial markets
• 1B in annual spending projected by 2020 on
  demand response solutions alone (Reference
  Department of Energy and the Federal Energy
  Regulatory Commission)

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Technology Overview

• Energy Director automatically predicts,
  regulates, and lowers peak demand
• Turn-key solution
• Industrial-hardened controller (hardware device)
• Software management tools
• Variety of networked wireless I/O (for load and
  meter connectivity enabling easy and simple
  set-up)
• Predictive load shedding optimized for Industrial
  environment
• Adaptive setpoint for automating savings
  management
• Complex rulesets for load performance protection
• Reporting for visibility into energy management
• Savings verification reports, graphs, and
  archives
• Utility bill matching / verification
• Energy, temperature process reports/graphs
• Simple Integration with Existing Systems
• Refrigeration, Bldg, Process controls
• Communication connectivity to major protocols
  such as LonWorks, BACNet, Modbus TCP, many others

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Technology Architecture
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Intelligent Load Shedding

• Intelligent load shedding software for Industrial
  environments
• Key element of Powerit market differentiation
• Proprietary predictive software algorithms for
  sophisticated load shedding
• Perfected and innovated through hundreds of
  customer experiences
• Small, incremental, temporary and coordinated
  shedding across a wide variety of loads
• Waits until the optimal time and only applies for
  the minimal duration
• Infinite set of rules for constraining and
  prioritizing shedding while protecting load
  functionality
• Gives customers confidence to automate energy
  management without impacting production, quality,
  safety, or comfort
• Users control the system load shedding can be
  linked to process controls giving them
  coordinated control

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Pending Acquisition

• Powerit just acquired small but highly
  complementary sister company
• Diana Control AB based in Sweden
• Long relationship and shared history with Powerit

• Key Diana Attributes
• Building Controls/Energy Management technology -
  control of HVAC, lighting, chiller systems, etc.
• Focus Commercial sector, mid-market
• Built on identical hardware platform and same
  software building blocks as Powerit
• Employs key technical resources responsible for
  innovation at both Powerit and Diana
• Controls manufacturing of Powerit and Diana
  devices
• Stable, successful, profitable Scandinavian firm
• 2006 4.4 million revenue, 449,000 Ebitda
• Very conservative sales/marketing approach

• Synergies for Powerit
• Unify Demand Management and Building Controls on
  a single platform (comprehensive Energy Mgmt)
• Expand reach into Commercial Market
• Control of key technical personnel and device
  manufacturing
• Enables broader, more granular load control
• Cross-sale opportunities (Industrial and
  Commercial)
• Localized base for European sales activities
• Profitable family run business
• Nice opportunities for growth with minimal
  investment

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Competitive Landscape
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Go-to-Market Strategy

• Vertical market focused sales approach
• Early Direct Sales focus as market presence and
  sales tools established
• Indirect sales beginning in earnest in 2007
• Indirect Channels
• Agents -- vertical and/or regional automation
  manufacturing reps
• Distributors -- regional industrial control
  firms, electrical contractors, systems
  integrators
• ESCOs -- regional energy savings program
  managers
• OEMs many potential partners desirous of
  integrating capability to reduce energy costs
• Examples induction furnace manufacturers
  (foundries), refrigeration systems (food
  processing)
• International Leverage European presence
• Need for Demand/Energy Management a global
  phenomenon
• Distribution in Europe through E.ON (large
  utility)

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Management Team
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Financial Projections

• Highlights
• Explosive growth potential in Industrial sectors
• Average product sales price range from
  50,000-200,000
• Attractive growth in profitable Commercial
  business with minimal investment
• Capital efficient business

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Financing and Capital Requirements

• Seed Financing through Stellar International
• Commercial real estate investment company with
  operations in the U.S. and Sweden
• Raising 5 million in first institutional round
• Proceeds of round utilized for
• Building sales, support, and channel
  infrastructure
• Augment management team
• Continued product innovation and expansion
• Support acquisition of Swedish sister-company

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• Appendix

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Building Pipeline

• Sales Process
• Identify targets from lead generation, using
  first vertical application filters
• Presentations via web using channel partners
• Qualify candidates remotely using key application
  criteria
• Demand charges, types of loads, size of facility
• Conduct site audit, analyze process define
  installation issues
• Develop technical proposal
• Negotiate final solution evaluate financing
  needs, incentives (if applicable)
• Implement solution training, setup MV process
• Post sale follow up via web meetings, develop
  case study
• Current pipeline 3.9MM
• C\Documents and Settings\Bobz.POWERIT\My
  Documents\Reports\Year end pipeline 121306.xls

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Customer Overview
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Its all about payback
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Its all about payback
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How does the system work?

• Automated peak load management
• System connects directly to the utility meter to
  obtain real-time billed usage data

• This ensures the data used for the timing and
  duration of load management directly relates to
  the bill

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How does the system work?

• The user establishes a target kW allowance

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How does the system work?

• The Energy Director uses real-time energy data to
  calculate and predict upcoming peaks based on
  allowance or setpoint

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How does the system work?

• The controller uses connected equipment to shift
  overall plant load at just the right moment, for
  just the right amount of time, thereby avoiding
  the peak(s)

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Why Powerit?

• The Energy Director has met and exceeded the
  quoted cost savings on our monthly energy bills.
  It has caused us to start looking at other areas
  in the operation besides the furnaces where the
  Energy Director might allow us to reduce our
  energy cost even more.
• Jerry Dale, Plant Manager, Foote Foundry,
  Fredericktown, Ohio

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Why Powerit?

• The Energy Director is extremely easy to use.
  There has been no impact whatsoever on operations
  or product quality and our savings are about 65K
  per year.
• Larry Benanti, Director of Engineering, San Jose
  Mercury News

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Interval Data Analysis