1. ERCOT Generation Drought Best Practices Workshop Water Conservation Practices for Texas Generators February 27, 2012

2. Presentation Overview Introduction Challenges Key Focus Areas Recommendations, Best Practices and Ideas Q&A 2

3. Introduction 3

4. Introduction Summer of 2011 was the hottest and driest in Texas history and, although somewhat diminished, the drought persists Overall water supply in Texas is decreasing while demand projections are increasing according to Water for Texas Draft 2012 Water Report Some generators in the state are beginning to be affected by drought conditions This combination of events and concerns prompted ERCOT to contact a group of Texas generators with a request to review current water management programs 4

5. Challenges 5

6. Ongoing extreme drought conditions Over 85% of the state was at “exceptional” drought level in September of 2011 Current conditions have improved but 43% of the state still at extreme or exceptional level Brazos and Sabine River basins have been hit the hardest As of October 11, 2011, 24 MW of capacity was unavailable due to drought If Spring rains are below normal, unavailable capacity across Texas could increase significantly Projected overall water demand will outstrip existing water supplies in Texas over the next 20-30 years as indicated by Water for Texas Draft 2012 Water Report Challenges 6

7. Key Focus Areas 7

8. Review basic water conservation programs for power plants Identify best practices for water conservation for power plants Generate and share ideas to prolong existing cooling reservoirs at power plants 8

9. Recommendations, Best Practices & Ideas 9

10. Recommendations on Water Conservation Plans Ensure basic water conservation programs contain the following elements: Identification of all uses and quantities of water at each plant site Appropriate matching of available source water types with use at each site A management plan to ensure maximum efficiency of water reuse and recycling 10

11. Best Practices for Water Conservation Return once-through cooling water to reservoir for reuse Recycle all waste streams to maximum extent possible Repair and maintain equipment to minimize water loss Utilize storm water runoff where appropriate Monitor and optimize water usage Remain aware of best management practices by participating in water conservation technical organizations 11

12. Best Practices for Water Conservation Evaluate low water usage processes when considering capital investments Ensure water usage optimization by review of standard operating procedures Minimize cooling water consumption Utilize dust suppression chemistry to minimize water usage Continue employee education on water conservation and drought mitigation efforts 12

13. Ideas to Prolong Life of Cooling Reservoirs Utilize alternative sources or quality of water where feasible Evaluate pump/piping configurations (placement, arrangement and size) to maximize reservoir capacity and greatest operational range Build / Improve infrastructure to access remote water sources to minimize transport losses Procure additional water supply where feasible Add / Adjust pumping capability and schedule to optimize water sources with variable availability Evaluate use of municipal effluent as primary or secondary water source 13

14. Ideas to Prolong Life of Cooling Reservoirs Evaluate water treatment technologies to allow use of lower quality water sources for certain processes Upgrade processes to minimize water consumption Use collected storm water runoff Coordinate water withdrawal with surrounding entities to ensure adequate supply Support development of additional water sources 14

15. Q&AQ&A 15