November 20, 2014

Puerto Rico Electric Power Authority

Mercury and Air Toxics Standards Compliance Planning

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Natural Gas (South Coast)

3,885.4 18.19%

Natural Gas (EcoEléctrica))

3,614.3 16.92%

Light Oil 1,626.3 7.61%

Bunker C 8,362.5 39.15%

Coal 3,557.0 16.65%

Hydro 70.0

0.33% Wind 204.6 0.96%

Photovoltaic 42.6

0.20%

Total Natural Gas: 35.11%

Total Oil Base:

46.76%

Puerto Rico’s Electrical System Highlights

Transmission Lines 2,478 mi. Underground 115kV 35 mi. Submarine 38kV 55 mi. Distribution Lines 31,547 mi. Transmission Centers 173 ea. 230/115/38 kV 6 230/115 kV 5 115/38 kV 38 Sectionalizers 124 Distribution Substations 333

Installed Capacity 5,961 MW PREPA 4,777 MW

Cogeneration 961 MW Renewables 223 MW1

Historical Peak Demand (Sep 2005) - 3,685 MW 1 Includes 100 MW of Hydroelectric owned by PREPA

Ren: 223 MW

Bunker C: 2,072 MW

Light Oil: 1,885 MW

NG: 1,327 MW

Coal: 454 MW

Actual Fuel Diversification Portfolio Distribution of Generation by Source (MkWh) Fiscal Year 2014

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Puerto Rico’s Isolated Electrical System: Implications for PREPA’s MATS

Compliance Planning

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Puerto Rico’s Isolated Electrical System - 2014

S 454 AES Plant C 507 EcoEléctica

Plant

S 602

Palo Seco Plant

400

San Juan Plant S

S 900 Aguirre Power

Complex

S 990 Costa Sur Plant

C 440

G 42 Jobos

G 42 Yabucoa

C G

G 592

42

42

G 248 Cambalache

G 42 Vega Baja

G 42 Daguao

G 220 Mayagüez

G 2 Culebra

G 6

Vieques

G 126

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Palo Seco

5

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Puerto Rico’s Isolated Electrical System - 2014

S 454 AES Plant C 507 EcoEléctica

Plant

Load Demand: 70% Generation: 30%

S 602

Palo Seco Plant

400

San Juan Plant S

S 900 Aguirre Power

Complex

S 990 Costa Sur Plant

C 440

G 42 Jobos

G 42 Yabucoa

C G

G 592

42

42

G 248 Cambalache

G 42 Vega Baja

G 42 Daguao

G 220 Mayagüez

G 2 Culebra

G 6

Vieques

G 126

Load Demand: 30% Generation: 70%

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Puerto Rico’s Isolated Electric System

• No access to a multi-state transmission system (no access to wholesale power from other regions)

• No access to interstate gas pipelines

• Implications for MATS compliance planning:

• Some of PREPA’s units are “reliability critical”

• Challenges in obtaining access to natural gas

• Challenges in integrating intermittent renewable resources

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PREPA’s MATS Compliance Efforts to Date

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9

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REDACTED - AC

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10

REDACTED - AC

REDACTED - AC

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Status of Costa Sur Units

Costa Sur 3,4,5,6 (990 MW)

Aguirre #1–2 (900 MW)

Palo Seco 1,2,3,4 (602 MW) San Juan

7, 8, 9, 10 (400 MW)

AGUIRRE COMPLEX

PALO SECO SAN JUAN

COSTA SUR

EcoEléctrica Terminal

Compliance: Projected April 16, 2015 • Units 3,4 (820 MW): Limited-Use

Status, April 2015 • Units 5,6: Converted to NG • Construction of NG pipeline from

existing EcoEléctrica terminal completed

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Status of Aguirre Units

Costa Sur 3,4,5,6 (990 MW)

Aguirre #1–2 (900 MW)

Palo Seco 1,2,3,4 (602 MW) San Juan

7, 8, 9, 10 (400 MW)

AGUIRRE COMPLEX

PALO SECO SAN JUAN

COSTA SUR

Aguirre Offshore GasPort Project

EcoEléctrica Terminal

Compliance: 1st Year Extension Granted, Expect 2nd Year Extension Needed • Siemens System Reliability Study: Limited-Use

or retirement is not feasible • Units 1, 2( 900 MW) : Plan is Conversion to NG

consecutively with, and subject to, AOGP permits

• Permit applications for AOGP Project and units conversions all filed between April and August 2013

• Delays in granting FERC permits

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Status of San Juan Units

Costa Sur 3,4,5,6 (990 MW)

Aguirre #1–2 (900 MW)

Palo Seco 1,2,3,4 (602 MW)

San Juan 7,8,9,10 (400 MW)

AGUIRRE COMPLEX

PALO SECO SAN JUAN

COSTA SUR

EcoEléctrica Terminal

Compliance: Units 7,8 April 16, 2015; Units 9,10 at least 1st Year Extension Needed • Units 7,8 (200 MW): Limited-Use Status, April 2015 • Units, 9,10 (200 MW): Analyzing options

• Testing to determine possible compliance through operational adjustments • New projects or significant modifications to the existing units (Both require capital

investment and several lengthy approvals) • Siemens System Reliability Study concluded that SJ Units 9 & 10 can be designated as

Limited Use or be retired only if the assumptions regarding the availability of additional generation become true. These assumptions are not expected to be met within the next two years .

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Status of Palo Seco Units

Costa Sur 3,4,5,6 (990 MW) Aguirre #1–2

(900 MW)

Palo Seco 1,2,3,4 (602 MW) San Juan 7,8,9,10

(400 MW)

AGUIRRE COMPLEX

PALO SECO SAN JUAN

COSTA SUR

EcoEléctrica Terminal

Compliance: Units 1,2 April 16, 2015; Units 3,4 at least 1st Year Extension Needed • Units 1,2 (170 MW): Limited-Use Status, April 2015 • Siemens System Reliability Study: Limited-Use

Status or retirement for 3, 4 is not feasible • Units 3, 4(432 MW): All alternatives under

evaluation are long time solutions (natural gas conversion and /or unit replacement)

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Q & A Session

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