UAS Implementation at Duke Energy

Cross-Functional Team Approach Aviation Corporate Communications Emerging Technology External Counsel Insurance/Risk Internal Counsel Supply Chain Various BU Stakeholders/SME s 2

UAS are considered to be aircraft subject to FAA regulation, whether operated for recreational or commercial purposes. The FAA Position Regarding Commercial Operation of a UAS The Federal Aviation Administration (FAA) is responsible for the regulation and oversight of civil aviation within the U.S., as well as operation and development of the National Airspace System. Its primary mission is to ensure safety of civil aviation. Commercial operations are considered as anything that serves a business purpose or provides a business benefit, even if that benefit is indirect. Commercial operation of a UAS requires a registered aircraft and a qualified pilot Described in the FAA s Small Unmanned Aircraft Regulations, Part 107 The FAA will continue to monitor UAS operations and utilize its enforcement rules (i.e., warnings, cease and desist notices and/or imposition of fines) when it becomes aware of unauthorized UAS operations. For example, failure to register an aircraft may result in regulatory and criminal sanctions. The FAA may assess civil penalties up to $27,500. Criminal penalties include fines of up to $250,000 and/or imprisonment for up to three years. In addition to FAA regulation and oversight, state and local entities have also implemented legislation. 3

Current Limitations Line of Sight Limitation Current FAA rules require that the UAS be operated within line of sight at all times. (~0.6 miles) Development of sense and avoid technology may remove these requirements in the future, reducing cost and increasing mission distance. Flight Time Limitation Average battery life for UAS is ~30 minutes, reducing mission duration and distance. Development of more efficient motors and/or more capable energy sources will increase mission capabilities Example- Impact of current limitations on transmission line inspection, compared with conventional helicopter inspection: Use of UAS would currently require either multiple crews for handoff after ~0.6 miles or crew would be required to relocate after ~0.6 miles. This results in an inefficient operation. 4

Use Cases Solar Plant Inspection Coal Ash Pond Inspection Coal Pile Inspection Dam Inspection Flu Gas Desulphurization (FGD) Stack Inspection Gypsum/Limestone Stockpile Inspection Landfill Inspection Transmission Line/ Distribution Line Inspection Summary of Duke Energy Proof of Concept Testing Data Products 3D orthomosaic and volume estimate IR images of erosion/drainage phenomena 3D orthomosaic and shoreline map High definition video and stills Temperature mapping IR images of solar panels to detect hot spots 5

Coal Pile Inspection Data Products Initial Orthomosaic DSM Elevation Model Topographic (1m per contour) 6

LiDAR Data Products 7

Wind Turbine Inspection 8

Hurricane Matthew Response 9

Hurricane Matthew Response 10

Solar Array (IR) Data Products Inactive Panels and Hot-Spot Simultaneous Visible Spectrum Image 11

Building Internal Bench Strength Initial class of 18 employees 13 from Renewables 4 from Aviation 1 from Distribution I&C Structured approach to training Online ground school (educate on safe operations & prepare for FAA Part 107 written test) Hands on training to build expertise Development of Standard Operating Procedures Safety Management System Aviation Use Policy Procurement of UAV s 12

UAS Training Program Ground School Online, self paced, instructor monitored training Safety Airworthiness Human Factors Aeronautical Decision Making Airspace Rules & Regulations Part 107 Rules & Regulations Flight Training Onsite, hands-on, instructor lead Simulator Training Initial proficiency on simple UAV Proficiency on UAV selected for field/mission 13

Incorporating Operational Excellence Leverage: Lean Startup Mentality Agile Approach to Organizational Development Ability to Grow & Mature With The Market Shared Resources and Expertise Deliver: Safer Operations Risk Mitigation Innovative Solutions to BU Challenges Operational Cost Reductions 14