Energy 2030 Framework

A significant majority of the customers with whom we talked and surveyed told us it was important to have more control around using energy. With that understanding, we will develop new products and services over time that will offer customers more options to manage the ways they use energy. These may include additional renewable energy options, like our Green Power Tomorrow program or Community Solar, or innovative pricing options to facilitate electric vehicle charging at off-peak times or as they become more readily available, using "smart" appliances to help customers conserve energy and home automation systems to help them control when they use electricity. We will work with customers to understand their needs and preferences so our programs provide value and take advantage of the opportunities of new and changing technologies.

With the help and involvement of our customers, we will work to provide more differentiated products, services and pricing to reflect the more differentiated ways that customers want to use energy and the electric grid. As new technologies become available, we will develop programs that use new technology on the customer "grid edge," such as "smart" appliances, home automation and energy storage, to benefit both individual customers and help manage long-term costs for all customers.

We also will upgrade and enhance our technology systems so that we can better deliver new products and services to our customers.

Customers told us that it was important to control costs. To that end, we will work with customers to help reduce growth in electric system peak. Reducing electric system peak will help us build and maintain an electric system that is only as big as we need to meet customer load and reduce the generating and distribution capacity that is needed only for times of peak use. This will save costs for all customers in the long run.

We plan to test and explore strategies with customers, such as using smart thermostats like NEST to reduce air-conditioning load at peak times while still maintaining comfort for participants. We'll also explore and test different pricing options such as Time Varying Rates and/or demand rates that can encourage customers to shift electric use to other times of the day.

We'll look at expanding programs to support use of electric vehicles and to manage electricity use for vehicle charging at peak times. We will research and potentially test options that build on our existing programs of electric vehicle home charging, workplace charging and our network of publicly available charging stations. We'll continue to support customer use of electric vehicles through information, resources and innovative rate designs. As energy and battery storage become available, we'll collaborate with customers to integrate these technologies to provide system and customer benefits.

Customers told us it is important to have an electric grid that supports new technology and maintains reliable service at a reasonable cost. We will develop the electric distribution infrastructure, systems and controls to move from a world of one-way power flows to two-way power flows. This will enable distributed energy sources, like solar photovoltaic energy and battery energy storage, to help meet future customer needs while ensuring reliability for all customers. It also will harness and optimize the benefits to all customers that distributed resources can provide.

We will experiment with ways to integrate solar most effectively using solar power inverters that convert the DC power generated by solar photovoltaic systems to the AC power used in our homes and businesses and throughout the electric grid. We also will begin exploring and testing a "smart" power inverter program with customers to learn how distributed resources, such as solar, can be deployed to provide voltage support and other distribution system functions that can benefit all customers.

As a regulated utility, we have an obligation to serve all customers with critical energy services. As we develop new technology, products, services and rates, we will consider the benefits, costs and impacts across all our customers and make sure that all customers have opportunities to share in the benefits of new technology.

We will continue to explore and experiment with new technologies through demonstration projects. We will continue to pursue projects that help customers learn about new technologies and from which MGE can learn how to optimize the technology on behalf of all customers. New projects could include such things as net-zero homes, electric micro-grids and battery energy storage.

In the future, we anticipate researching and testing innovative pricing and rate options. As we do, we will consider and balance the following factors:

• Encouraging energy efficiency and conservation.
• Discouraging use during times of electric system peak to save long-term costs for all customers.
• Equitably covering the costs of the critical assets used to serve customers, including the costs to maintain and improve the energy grid for everyone who uses it.

We plan to do research, testing and piloting of new options with customers on a voluntary basis to test customer acceptance and to understand how well different options serve our Energy 2030 objectives.

We want to work through this process and will not be proposing an increase in fixed charges for residential and small business customers in our next rate case.

It has been our long-standing practice to work together with our customers. We understand that even deeper engagement is important as we build a community energy company for the future. Now we will build upon the input we've received so far to explore ideas on how to move forward together.

As we move forward, we will continue our collaborations and partnerships with key stakeholders. We'll plan more customer and technical research and analysis. We will initiate and maintain more ongoing customer engagement opportunities.

Throughout this process, we will develop ideas for specific initiatives to test and explore together. Through ongoing research and engagement, we will build a community energy company for the future that will provide value to customers individually, as well as to all customers collectively.

In addition, we will:

• Ensure that as we serve customers, we do so without barriers based on income, ethnicity, race and other factors.
• Continue to build relationships and partnerships with neighborhoods, community and service organizations, and economic and business organizations to extend and expand our reach to all our customers.
• Provide products and services in ways that are culturally competent.
• Ensure that all customers have options for shaping and managing their energy use and that all customers can share in the benefits of new technology.