1. 2009 ENERGY BUYERS’ CONFERENCE: Guam Power Authority John J. Cruz, Jr. P.E. Oct. 25-27, 2009

2. Presenter JOHN CRUZ, JR., P.E. Manager of Strategic Planning & Operations Research Division Seven years at Hughes Aircraft Company  Radar System Engineer, Modes Leader B2 Program Began GPA career in 1991, with projects such as Long Range Transmission Planning and Integrated Resource Planning, IT Infrastructure, Power System Engineering Studies and SCADA/EMS1 BS Electrical Engineering, Gonzaga University Mathematics (BA); Business Minor Registered Professional Electrical (#1180, Guam) Guam Community College (Adjunct Faculty, Electronics)

3. Guam Largest, southernmost island of the Mariana archipelago Composed of volcanic material and limestone base seabed material from coral deposits 1,500 NM southeast of Tokyo 1,500 NM east of Manila 3,700 NM west-southwest of Honolulu 6,000 NM west of San Francisco Tropical Marine climate generally warm and humid with two seasons: Dry (December to June) and Rainy (July to November) Average rainfall 90-110 inches

4. Guam Power Authority (GPA) Established in 1968, a public corporation and an enterprise fund of the Government of Guam.  Administered by the Consolidated Commission on Utilities  Regulated by the Guam Public Utilities Provides electrical power service throughout entire island  Supports Guam Waterworks Authority through operation and maintenance of 18 MW emergency generators for water and sewage pump stations

5. 553 MW Installed Capacity System Peak (272/281.5) 29 Substations 663 miles of transmission and distribution lines $840 million assets $308 million 2007 Revenues Labor = 10% of Total Revenues Guam Power Authority (GPA)

6. Organizational Chart

7. Generation Sourcing 552.2 MW Installed Capacity IPP – Independent Power Producers PMC – Performance Management Contractor

8. Generation Mix 552.2 MW Installed Capacity 281.5 MW peak 96% Reserve Margin

9. Generation Mix BASELOAD UNITS

10. Cabras 1&2 Power Plant Steam Turbine, 2 Units Nameplate Capacity: 66 MW each Location: Cabras-Piti Area, South-central Guam Primary Fuel : RFO Installed in 1974/1975 PMC

11. Cabras 3&4 Power Plant Slow-speed Diesel, 2 Units Nameplate Capacity: 39.3 MW each Location: Cabras-Piti Area, South-central Guam Primary Fuel : RFO Installed in 1995/1996 Commissioned in 1999 Currently handled by PMC PMC

12. MEC Power Plant Slow-speed Diesel, 2 Units Nameplate Capacity: 44.2 MW each Location: Cabras-Piti Area, South-central Guam Primary Fuel : RFO IPP Commissioned in 1999

13. Steam Turbine, 2 Units Nameplate Capacity: 26.5 MW each Location: Cabras-Piti Area, South-central Guam Primary Fuel : RFO Installed in 1971/1973Commissioned in 1999 IPP – Energy Conversion Agreement for Refurbishment Tanguisson Power Plant

14. Generation Mix CTs and Fast-Track Diesels UNITEquipment TypeMaximum Gross Capacity (MW)Fuel Oil Type TEMESCombustion Turbine40.0HSFO/LSFO Dededo CT 1Combustion Turbine23.0HSFO/LSFO Dededo CT 2Combustion Turbine22.0HSFO/LSFO Macheche CTCombustion Turbine22.0Diesel Yigo CTCombustion Turbine22.0Diesel Marbo CTCombustion Turbine16.0Diesel Tenjo Vista Unit 1Fast-Track Diesel4.4Diesel Tenjo Vista Unit 2Fast-Track Diesel4.4Diesel Tenjo Vista Unit 3Fast-Track Diesel4.4Diesel Tenjo Vista Unit 4Fast-Track Diesel4.4Diesel Tenjo Vista Unit 5Fast-Track Diesel4.4Diesel Tenjo Vista Unit 6Fast-Track Diesel4.4Diesel Manenggon Unit 1Fast-Track Diesel5.3Diesel Manenggon Unit 2Fast-Track Diesel5.3Diesel Talofofo Unit 1Fast-Track Diesel4.4Diesel Talofofo Unit 2Fast-Track Diesel4.4Diesel Dededo Diesel Unit 1Fast-Track Diesel2.5Diesel Dededo Diesel Unit 2Fast-Track Diesel2.5Diesel Dededo Diesel Unit 3Fast-Track Diesel2.5Diesel

15. TEMES Power Plant Combustion Turbine Unit Nameplate Capacity: 40 MW Location: Cabras-Piti Area, South-central Guam Primary Fuel : Diesel Fuel Oil Installed in 1998 IPP

16. Fast-Track Diesel Plants Plants located in Southern Guam, Utilized mainly as Peak-load Units Tenjo Vista Power Plant – 26.4 MW capacity  Fuel Delivered via Pipeline  Plant is located beside Shell Guam, Inc. Fuel Facility Talofofo Plant – 8.8 MW  Fuel delivered via tanker truck (as needed) Manenggon Plant – 10.6 MW  Fuel delivered via tanker truck (as needed) PRIMARY FUEL : DIESEL  Tenjo Vista – 0.3% Sulfur requirement  All other plants – 0.5% Sulfur requirement

17. TENJO POWER PLANT TALOFOFO POWER PLANT MANENGGON POWER PLANT

18. Combustion Turbine Plants Plants located in Northern Guam, utilized mainly as Peak-load Units Dededo CT #1 Plant – 23 MW capacity Dededo CT#2 Plant – 22 MW capacity Yigo CT, Macheche CT Plants – 22 MW each Marbo CT Plant – 16 MW Fuel delivered via tanker truck (as needed) PRIMARY FUEL : Diesel Fuel Oil, 0.5% Sulfur

19. DEDEDO CT 1 & 2 YIGO CT POWER PLANT MACHECHE CT POWER PLANT

20. Baseload Plants Fast-Track Diesel Units CT Units

21. Energy Production (Thermal) KWH per Year

22. Energy Production (Thermal) KWH per Year, per Plant Type

23. Fuel Consumption in Thousand Barrels

24. Fuel Delivery RFO No. 6 Consumption estimates:  Approximately 8,000 bbls/day  Approximately 3 Million bbls/year Delivered via ocean freight petro-shipping vessels chartered by off-island supplier  Delivery Cycle = 31-33 Days  Split-cargo combination of LSFO and HSFO  Total Cargo Quantity (est.) = 240,000 to 300,000 bbls/shipment

25. Fuel Delivery Ship is accommodated at the F-1 Dock Facility managed and operated by Shell Guam, Inc.  Maximum LOA: 237 meters  Maximum breadth: 45 meters  Maximum vessel draft alongside: 14.8 meters  Maximum displacement: 120,000 tons RFO transported to shoretanks via a 24-inch diameter pipeline (Shell B-Line)  GPA Fuel Farm Facility in Piti  Shell Tank farm Facility in Agat

26. Fuel Delivery Scheme RFO is transferred from ship to fuel farm via pipeline

27. RFO is delivered via Shipment every month.  RFO is delivered from Ship to Fuel Farm through the 24-inch pipeline  Third-party certified petroleum testing laboratory tests and inspects shipment RFO is delivered to the different Baseload Plants via Pipeline  12-inch diameter pipeline from Tank 1934 & 1935 to Main Transfer Pump Station (MTPS)  6-inch diameter pipeline from MTPS to Cabras and MEC plants  8-inch diameter pipeline from MTPS to Tanguisson Plant Diesel is delivered via:  Pipeline for the TEMES and TENJO VISTA Plants  Tanker Truck for all other Fast-Track Diesel and CT Plants Fuel Delivery and Issuance

28. Fuel Storage 30 – 60 days RFO Reserve Fuel Storage Capacity  RFO: 1,125,800 BBLS ( 47,283,672 Gallons)  Diesel: 38,681 BBLS (1,624,729 Gallons) Bulk Storage Ownership  2 Owned by GPA  3 Leased from Shell All Plant Storage Tanks and Diesel Storage Tanks owned by GPA Management Contract for operations of Fuel Bulk Storage Facility

29. Fuel Storage Facilities Bulk Storage CapacityPumpable Inventory BBLGALBBLGAL RFO BULK STORAGE 1,006,00042,252,000905,40038,026,800 RFO PLANT STORAGE 83,8003,519,60075,4203,167,640 TOTAL RFO INVENTORY CAPACITY 1,089,80045771600980,82041,194,440 TOTAL DIESEL INVENTORY CAPACITY 38,6811,624,72930,9451,299,783 HSFO = 680,000 bbls LSFO = 326,000 bbls

30. GPA’s Fuel Farm Piti Fuel Farm Bulk Storage Tank (Tank 1934 & 1935)

31. Fuel Specifications -RFO High Sulfur Fuel Oil, 2.00%S Max / Low Sulfur Fuel Oil, 1.19%S Max CharacteristicsLimitsASTM Test Sulfur, Wt%, Max HSFO / LSFO2.00 / 1.19D-4294 Pour Point, Maximum70 ºF or 21 ºCD-97 Flash Point, Minimum150 ºF or 66 ºCD-93 Fire Point, Deg. F., Minimum200ºF or 94ºCD-92 Viscosity, SSU at 100 Deg F., Max./Min.1500 / 600D-445 Sediment by extraction, Wt. % Max.0.50D-473 Water by Distillation, Vol. % Max.0.50D-95 Vanadium Content, PPM, Max.80D-5708 Gross Heating Value, Guaranteed MBTU per barrel5.9D-240 Aluminum Plus Silicon PPM Maximum (Individual results to be reported separately) 80D-5184 Ash Content, Wt. %, Max.0.10D-482 Carbon Residue, Wt. % Conradson,Maximum15D-4530 Gravity, Deg API at 60 Degrees F, Min / Max14.0 / 23.0D-287 Total Sediment – accelerated, % mass, max0.15ISO 10307-2 Compatibility a) Cleanliness Ratio, max2ASTM D-4740 b) Compatibility Ratio, max2

32. Fuel Specifications - Diesel DIESEL – For Fuel Deliveries to Baseloads, TEMES, CTs, Water Systems Generators and Fast Tracks CharacteristicsSpecification LimitsTest methods GRAVITYAPI at 60 ºF, Min./Max.32-42D-1298 FLASH POINT, PMCC deg. F.140 MIND-93 SULFUR CONTENT, Wt. %0.50 MAXD-129 APPEARANCE @ambient temp.Clear & brightVISUAL POUR POINT, Deg. F.50 MAXD-97 CETANE Index Number (Calc.)48 MIN.D-976 WATER & SEDIMENTS by centrifuge, Volume %.0.050 MAXD-1798 CARBON RESIDUE 10% Bottom, Wt. %.0.200 MAXD-189 CORROSION, Copper Strip, 3-hrs @ 212 deg. F.ASTM No. 2 MAXD-130 ASH CONTENT, Wt. %,0.005 MAXD-482 NEUTRALIZATION Number, Total Acid Number, mg KOH/gm sample 0.200 MAXD-974 COLOR, ASTM Color3.0 MAX.D-15000 Guaranteed Heating Value, MMBTU/bbl5.9000D-240 Metals, PPMBaird AE

33. Fuel Specifications - Diesel DIESEL – For Fuel Deliveries to Tenjo Vista Diesel Plant CharacteristicsSpecification LimitsTest methods GRAVITYAPI at 60 ºF, Min./Max.32-42D-1298 FLASH POINT, PMCC deg. F.140 MIND-93 SULFUR CONTENT, Wt. %0.30 MAXD-129 APPEARANCE @ambient temp.Clear & brightVISUAL POUR POINT, Deg. F.50 MAXD-97 CETANE Index Number (Calc.)48 MIN.D-976 WATER & SEDIMENTS by centrifuge, Volume %.0.050 MAXD-1798 CARBON RESIDUE 10% Bottom, Wt. %.0.200 MAXD-189 CORROSION, Copper Strip, 3-hrs @ 212 deg. F.ASTM No. 2 MAXD-130 ASH CONTENT, Wt. %,0.005 MAXD-482 NEUTRALIZATION Number, Total Acid Number, mg KOH/gm sample 0.200 MAXD-974 COLOR, ASTM Color3.0 MAX.D-15000 Guaranteed Heating Value, MMBTU/bbl5.9000D-240 Metals, PPMBaird AE

34. GPA has a contract for the Management of the Fuel Bulk Storage Facility (Fuel Farm)  Contractor is responsible for managing the fuel farm, receiving fuel supply, and delivering fuel supply to the different power plants  Third-party certified petroleum testing laboratory tests fuel Bid for the management and operations of the bulk storage facility is in progress  New contract shall include the management of GPA’s fuel pipelines  Focus on reducing inventory losses and maintenance of GPA facilities Fuel Bulk Storage Facility

35. GPA’s Key Fuel Suppliers Off-island Supplier  Contract with a Singapore-based RFO Supplier  Currently contracted to BP Singapore, PTE Ltd. On-island Suppliers  On-island supplier for Diesel Fuel Oil (0.5% and 0.3% Sulfur)  Current contracted to Shell, Guam Inc.  New Bid in process

36. Current Supplier: BP Singapore, PTE Ltd. 3 Years (February 01, 2007 to January 01, 2010) w/ 2 Years Extension Option Quantity = Close to 3 Million BBLS per year Pricing = Market + Fixed Premium  Market Price = Average of previous month’s posting Delivery Details (Spot/term, FOB delivered, etc.) RFO Supply Contract

37. Pricing = Market + Fixed Premium  Market = Average of previous month’s posting New Contracts shall be awarded on December 2009  Supply of 0.5% Sulfur Diesel Fuel Supply except Tenjo  Supply of 0.3% Sulfur Diesel Fuel Supply for Tenjo Vista Power Plant Includes options for:  Various delivery methods (tanker truck, pipeline)  Adopting 500 PPM Diesel Fuel *pending manufacturer’s recommendations on compatibility, specification limits for fuel characteristics Diesel Fuel Oil Supply

38. GPA’s Integrated Resource Plan Identifies key assumptions specific to future electric needs on Guam  Viable resource and demand side technologies  Load and Fuel forecasts  Environmental Impact and Constraints Uses a licensed resource expansion optimization tool (STRATEGIST) for modeling framework Incorporates a Stakeholder Process

39. Demand Forecast

40. Demand Forecast (continued)

41. Load Forecasts

42. GPA created an Integrated Resource Plan (IRP) which addresses Fuel Diversification and Renewable Energy Requirements (PL 29-62) by Recommending: Acquisition of renewable resources to offset the high price of fuel, and Conversion of existing plants to use Liquefied Natural Gas as an additional measure to lower impact of petroleum volatility and lower fuel expenses. GPA has initiated the acquisition for renewable resources (Wind, Solar, Hydro, Biomass, Geothermal, OTEC, Wave). Moving Forward

43. Phase 1 of Renewable Bid in final stages of procurement  Projects > 5MW and up to 40 MW (for Phase I)  Commissioning Period within 36 Months  Commercially viable with min. 1 year of performance data  RFP for Wind Monitoring in progress  Pilot project for 1 MW Wind Turbine in progress Phase 2 of Renewable Bid to be announced by Second Quarter of 2010 Moving Forward

44. Future Fuel Demand Outlook

45. Expected increase in demand due to military build-up  Increase in use of Diesel-fired Units  Conversion of Diesel-fired Units to LNG/CNG  Utilization of Renewable Energy Resources such as Wind Power, Geothermal, Solar and others Use of HSFO and LSFO dependent on weather conditions  GPA continuously improves on its operations to maximize efficiency of the units  Improvements on HSFO and LSFO consumption monitoring and forecasting  Research on-going regarding additional fuel storage facilities

46. Shift to 500 PPM Diesel Fuel Oil (0.05% Sulfur)  Current issue is to determine the impact of using 500 PPM Diesel to each plant equipment Future Fuel Quality Outlook