[PPT] - Fuel Opportunities Board Presentation February 5 th , 2015 Virgilio PowerPoint Presentation

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Fuel Opportunities Board Presentation February 5th, 2015

Confidential and Preliminary Subject to Substantial Revision

Virgilio Sosa

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Disclaimer

The information contained in, and accompanying, this presentation (the “Information”) has been provided and prepared by the Puerto Rico Power Authority (“PREPA” or the “Company”) and is in draft form subject to ongoing discussions and revisions. No representation or warranty, express or implied, is made by the Company or its advisors as to the accuracy or completeness

f the Information. The Company and its advisors shall have no responsibility or liability for the accuracy or completeness of

the Information or the consequences of any party’s reliance upon the Information. The Information does not constitute a proposal by the Company or its advisors, an offer capable of acceptance or a solicitation to sell or purchase securities. Neither the Company nor its advisors shall have any liability, whether direct or indirect, in contract, tort or otherwise, to any person in connection with the Information. This Information is being provided to you in the context of settlement discussions and is subject in all respects to Federal Rule

f Evidence 408 and similar rules. You agree to keep the Information strictly confidential and to use it only in connection with

settlement discussions and the evaluation of the Company. The Information is highly confidential and contains proprietary and confidential information about the Company and its operations. This presentation is being presented solely for your information and may not be copied, reproduced or redistributed to any other person in any manner. At the request of the Company, the recipient will promptly return all non-public material received from the Company (including this document) without retaining any copies thereof. References in this presentation to an Integrated Resource Plan (“IRP”) are to a Stage 1 IRP. The IRP required by Act 57-2014, Transformation and Energy Relief Act, will require further development.

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Strictly Private and Confidential Prepared at request of Counsel

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We have implemented Fuels Inventory Controls in Line with the Oil Industry Standards

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Product Receipt Fuel Consumption System of Record

Marine and Pipeline receipts to continue being witnessed by an

inspector using API standards

Tank truck receipts to log totalizer amounts and reconcile amounts

received vs delivered quantities to identify deviations

Log received quantities in a system of record (Asset Suite) at standard

temperature

Investigate any deviations greater than 0.5%
All daily tank readings (manual or tank gauge) to be converted to API

standard

Perform daily reconciliation between tank movements vs meter
readings. Investigate and report any deviation greater than 1%
Unit consumption to be based on the authorities requirements
Log daily consumption in the system or record (Asset Suite) at std

temperature

Set up fuels controls in the Asset Suite Application
Produce weekly and monthly reports of consumption variations tank

movements vs meters

All volumes to be recorded at standard temperature
Perform regular inventory movement audit following inventory control

policies (from purchase through consumption)

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Oil Industry Standards

12 Heater

Daily/monthly reconciliations meter reading vs daily tank movements at standard temperature Heater for # 6 Fuel Purchase Reconciled at standard Temperature Corrected for API and against invoices

Gains/loss levels outside standards are investigated and actions implemented Active and inactive tanks are measured daily with monthly physical dips Inventory controls maintained in a centralized ERP

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Inventory Control Form Developed and Ready for Deployment

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Developed leveraging the Aguirre inventory control form
The form automatically calculates gains and losses based on tank measurements and

meter readings using tank strapping and API tables

Autoridad Electrica de Puerto Rico Plant Month Date In Service Sampled Date Gross bbls Gross Tank Bottoms bbls API Temp Correction Factor Std Receipts bbls Total Std Volume bbls Yes Yes 22-Nov Tank 1 22 Feet 5 3/4 Inches "Empty" 171,638 33,886 15.6 98.0 0.98498 169,060 Yes No Tank 2 20 Feet 4 2/7 Inches "Empty" 185,678 24,309 15.8 100.3 0.98404 182,715 Tank 3 25 Feet 4 2/3 Inches "Empty" 163,523 34,692 15.4 95.0 0.98619 161,264 Tank 4 48 Feet 1/4 Inches "Empty" 3,414 3,414 15.2 92.0 0.9874 67,567 70,938 Tank 5 Feet Inches "Empty" Tank 6 Feet Inches "Empty" Tank 7 Feet Inches "Empty" Service 1 5 Feet 3 2/3 Inches "Empty" 31,748 11,374 15.4 95.0 0.98619 31,310 Service 2 4 Feet 2 1/2 Inches "Empty" 32,674 11,346 15.4 95.0 0.98619 32,223 Service 3 Feet Inches "Empty" Totals 588,675 119,020 67,567 647,509 469,654 Meter 1 Meter 2 Std tank Move 4,942 Service Metering Current reading Net Reading bbls Net Reading Bbls Unit 1 10000 2,817 2,817 Gross gen Unit 2 70000 326 326 Auxiliary Unit 3 Net gen Unit 4 Net cons 3,143 Unit 5 Heat rate Unit 6 Total Consumption 3,143 3,143 Inventory 647,509 Consumption 3,143 (1,800) Receipt 67,567 Standard Prior reading Current reading Prior reading Gain/Loss balance December-14 Monday, December 01, 2014 Central de XXXXXXXXXX 500 68900 10000 70000 Tank Measurements Fuel Oil # 6 500 68900 Meter 1 Meter 2

Input fields Input fields

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Inventory Control Dashboard

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Fuels Inventory Reconciliation As of January 31, 2014 January 2015 Weekly Summary Highly Confidential Month of: Fuel #6 $ 60.00 $ Diesel #2 $ 75.00 $ Fuel Oil #6 Fuel #6 Tank Meter Reading Fuel #6 Tank Meter Reading Fuel #6 Tank Meter Reading Fuel #6 Tank Meter Reading Fuel #6 Tank Meter Reading Memo: Plants Standard tank movement Unit Total Standard tank movement Unit Total Standard tank movement Unit Total Standard tank movement Unit Total Standard tank movement Unit Total Cumulative Differences Cumulative % Variance Tolerance Level Above 1% Volume Above 1% $ Amount Total Inventory at First Day of Month San Juan (12,564) 12,801 237 (46,841) 45,515 (1,326) (47,500) 45,835 (1,664) (45,922) 44,508 (1,414) (45,490) 44,063 (1,427) (5,595)

3%

(3,668) (220,066) $ 49,242 Costa Sur (16,988) 10,312 (6,676) (21,235) 18,729 (2,506) (19,944) 17,034 (2,910) (11,339) 10,307 (1,032) (14,786) 12,906 (1,880) (15,003)

22%

(14,310) (858,614) $ 254,480 Aguirre (73,765) 68,862 (4,903) (171,339) 166,493 (4,846) (178,175) 173,983 (4,192) (160,867) 155,732 (5,135) (163,830) 159,505 (4,325) (23,401)

3%

(16,155) (969,320) $ 386,804 Palo Seco n/a n/a

$

Total (103,317) 91,976 (11,341) (239,416) 230,737 (8,679) (245,619) 236,853 (8,766) (218,128) 210,548 (7,580) (224,105) 216,473 (7,632) (43,999)

4%

(34,133) (2,047,999) $ 690,526 Diesel #2 Diesel #2 Tank Meter Reading Diesel #2 Tank Meter Reading Diesel #2 Tank Meter Reading Diesel #2 Tank Meter Reading Diesel #2 Tank Meter Reading Memo: Plants Standard tank movement Unit Total Standard tank movement Unit Total Standard tank movement Unit Total Standard tank movement Unit Total Standard tank movement Unit Total Cumulative Differences Cumulative % Variance Tolerance Level Above 1% Volume Above 1% $ Amount Total Inventory at First Day of Month San Juan (312) (312) (30,085) 21,571 (8,513) (14,956) 10,690 (4,265) (13,091)

41%

(12,768) (957,598) $ 41,014 Costa Sur (4) (4) (9) (9) (3) (3) (16) n/a n/a (16) (1,196) $ 2,929 Aguirre (2,842) (2,842) (17,903) (17,903) (7,120) (7,120) (27,864) n/a n/a (27,864) (2,089,804) $ 149,900 Palo Seco n/a n/a

$

Vega Biaja n/a n/a

$

Mayaguez n/a n/a

$

Cambalache n/a n/a

$

Jobos n/a n/a

$

Yabacuoa n/a n/a

$

Daguao Ceiba n/a n/a

$

Total (316) (316) (2,842) (2,842) (47,987) 21,571 (26,416) (22,085) 10,690 (11,394) (3) (3) (40,971)

127%

(40,648) (3,048,597) $ 193,843 Greater than 5% Cumulative Difference Between 1% and 5% Cumulative Difference Less than 1% Cumulative Difference Tolerance Level Legend January-15 Week 1 Week 2 Week 2 Difference Difference Difference Difference Week 1 Cumulative Variances Cumulative Variances Difference Difference Difference Difference Week 3 Week 5 Week 5 Week 3 Week 4 Week 4 Difference Difference

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