Process Standardization to Support Growth Targets

1. Process Standardization to Support Growth Targets Jimmy Lewis AES Global Account Manager SAP Utilities Roehl NavarroGlobal Director, GRC AES Corporation

2. Executive Summary 123 Generation plants in 29 countries, 43,000+ MW 7 integrated utility companies in Brazil, Argentina, Ukraine, EL Salvador, USA, Kazakhstan, Chile- Over 14M Customers Emerging Leadership in Alternative Energies Our mission is to produce CLEAN SUSTAINABLE ELECTRICITY The various markets we operate in have different regulations Our diverse operating environments dictate the need for a federated IT infrastructure that supports local operating requirements while promoting standardization and global KPI monitoring to whatever extent possible The big challenge to execute is determining what can be standardized and what must remain localized. Even Localized Infrastructures can participate in the global view. A perfect example is our CIS environment in Brazil, with ~5.5 M customers. Our infrastructure must obviously address local regulations, be highly scalable, and integrate with our corporate financial system. SAP CCS for Brazil was the only choice. Federated IT Governance Structure and Management Value Realization Global Support of Local Deployments Enablement of our Business.

3. SAP has been deployed within AES to 10* countries so far, supporting over 8 million + contracts world-wide so far Deployments to this point have provided substantial control coverage (~50% of Assets, ~60% of Revenue and ~67% of Income from Continuing Operations) Ukraine United States Bulgaria Spain Turkey Jordan El Salvador Brazil Chile Argentina * Brazil implemented SAP ERP before the start of the genesis program. In February 2008, there were 4,000 active users. The SAP Customer Care & Service (CCS) module was also implemented in Brazil and supports 5M customers. ** Ukraine has also implemented the CCS module and now supports 1.3M customers.

4. Who we are in Latin America • The largest energy distributor in Latin America • 5.5 million consumer units • 16.5 Million inhabitants • ~36% of AES global revenue • ~$6B annual revenue • 4,000 Users 26 Countries 30,000 Collaborators

5. IntroductionGenesis Initiative • In 2004 AES decided to adopt SAP as our main platform for our Global Operations. • Phased deployment plan. We are implementing project after project • AES globally is ~130 operating companies. • Brazil’s CIS needs and Corporate Financial were very high priority Key Goals of the whole Initiative Business Drivers AES Objectives • Implement a common business model for AES • Define and implement standardized and harmonized business processes in the countries AES has Generation and Distribution Companies • Standardize and harmonize master data such as material master, customer and supplier data • Implement a global template reflecting the AES standards as much as possible • Rollout the template into the countries defined in scope • Drive quality financial information • Create repeatable roll-in model • Improve productivity at businesses • Became a Learning Organization • Manage total cost of IT ownership • Improve & reduce cost of compliance • Reduce operating cost • Improve productivity and performance • Achieve additional capability around financial reporting • Improve overall quality of information • Improve standardization

6. CCS Implementation for AES EletropauloOverview • Implementation of commercial management systems for high, medium and low voltage clients, based on SAP, CCS 4.7.2, CRM 4.0, BI 3.5 Solution for the Utilities industry, replacing the current commercial systems, mainly Pegasus (AT/MT) and Sicon (BT) Drivers • Five billing systems • Difficulty in the collection management • Not consistent management information • Difficulty in the accounting closing process • Lack of continuity of the billing system for High and Medium voltage clients • Programs at their technical maintenance limit • High maintenance costs • Operations focused on processes and not on integrated systems

7. CCS Implementation for AES EletropauloOverview Other important aspects of this implementation • SAP CRM, IS-U CCS, XI and BW systems implemented; • More than 100 FTE's, involving resources from System Integrator, Delivery Center, SAP AG, Third Parties, AES Eletropaulo and AES Corporate; • More than 120 business processes in place; • Batch Chain invoicing daily about 300,000 contracts • More than 3,500 people trained • 10 months of training sessions in Low Voltage processes • Innovative SAP landscape: multiple applications and DB servers using Oracle RAC and 10g database, ensuring a high availability environment • Hot site with on-line data replication (US and in UK) – in order to guarantee AES business continuity • Biggest data migration already in production in Brazil, with more than 5.5M Business Partners; replacing around 10 legacy systems • Integration services using SAP-XI • Internet Solution – integration with SAP via NetWeaver • Call center solution using IVR/CTI, integrated with SAP-CRM • Select Target solution for Loss Prevention processes, integrated on-line with CCS and BW • More than 90 BW reports available via web

8. Previous Situation in AES Brazil CIS Arena Relationship Sales Reading Billing Collection Loss Recovery OUVIDORIA SAT-S RECIBO FATURA CODEN SICON-B SICON-F SAT-R SAF CONTACT CENTER AUTOFAT PEGASUS PSE SGFA ATENDE.COM SCE NEGOCIAÇÃO SGO INSP TELA FÁCIL SIGEN ATENDE ATENDE CI SAT CELULAR QUALPROX CENTRAL DE CALCULO SIC / RIC / DW MainFrame 28 Systems

9. QUALPROX MEETS CODEN RECEIPT INVOICE SAT CELULAR AUTOFAT MEETS CI Present Situation Relationship Service Sales Reading Billing Collection Loss Recovery Integration, simplification and sustainability. CRM CCS & R/3 BW

10. Timeline Strategy • Public Go Live - Synchronize go lives with social windows = Window of opportunity • Year end or carnival • Use holidays (stop of operations) • Respect SOX requirements Public go live Technical go live Pre-Analysis Production Support Evaluation Model Solution Parallel Tests Cutover Simulation • SAP pre analysis • Data model • Capability with SAP • Organization redness • Executives • End users • Budget estimation • SAP pre analysis • Data model • Capability with SAP • Organization redness • Executives • End users • Budget estimation • Construct + tests • Unit + integration • Construct + tests • Unit + integration • Business involvement Billing 1,5% Migration99% Checkpoint design Blueprint Kick off Weekly milestones monitoring

11. There are Never Too many Tests • The methodology used in Genesis project includes a battery of tests to guarantee the quality and the integrity of solution. • In Genesis project the main testing phases were: Unit tests • test the business transactions unitarily Integrated tests • test the business process and its integration. In Genesis more than 120 processes were defined and tested Parallel tests • test to validate the revenue cycle and compare the results between the new and the legacy systems – for the 2nd go live, it was executed two cycles of this test, with the scope of 1 week of billing cycle (representative sample) User Acceptance • consists on testing the designed processes, using migrated data, and obtaining the acceptance of the process owners. The process and variants executed during Solution User Acceptance phase were defined and validated with Business Owners.

12. Testing Streams Stress Tests Data Migration Cycles Cutover simulation • Consists on performing the tests to ensure that business processes run with adequate time, considering the on-line and batch scenarios, including all the SAP systems (CCS, CRM BW, XI). AES Eletropaulo’s scope includes to invoice daily around 300.000 contracts and to load these invoices information to BW system. • ETL (extraction, transformation and load) process. In general, the major part of the data is migrated using a specific IS-U CCS tool (IS-U Migration Workbench). In total, AES Eletropaulo’s migration included more than 5.5M of Business Partners; replacing around 10 legacy systems. The data cleansing project was segmented in the following topics to better produce results: • Addresses • Customer data • Receivables • Equipment data • Fraud data • The activities of the cutover period were simulated, in terms of data extraction, loading in CCS, loading in BW, replication to CRM, processes recovering, interfaces activation, etc. • 1st go live: the cutover period was one extended weekend. • 2nd go live: 2 weeks of cutover period, where the downtime of SAP (already in place) was 1 week and the downtime of the LV legacy system was 2 weeks. Around 200k services had to be recovered after the go-live, major part in the end of the cutover period, due to downtime issue. A specific tool was designed and implemented by the project specifically to cover this subject during the cutover period

13. Communications Strategy Involve everyone and tell everyone. Don’t make the new billing system a surprise to your customers!

14. When implementing a CCS to cover 5.5M customers, a well organized War Room is essential. Steering Committee War Room Coordination Business Project Incidents Resolution Business Areas Support OperationInfrastructure Delivery Center TransitionCoordination

15. War Room Objectives Set of business and project people with specific roles for • Coordinate actions during transition period (Cut-Over). • Initiate the business operation stabilization. • Control and monitor the execution of the operational and commercial processes: • Meter Reading/Invoicing • Collection • Attending • Service Orders • Identify the source of the problems (in the business operation or in the system). Coordinate actions. • Integrated understanding about the transformation progress • Communicate unique and trustable information to the company Operating 24x7 and located in a same physical place

16. War RoomCoordination War Room Coordinator ReceivablesStabilization AttendingStabilization Service OrdersStabilization FinancialStabilization SolutionStabilization InfrastructureStabilization • Takes the necessary business decisions during the transition period (Cut-over) • Takes the basic operative decisions to stabilize the business after Go Live • Prioritizes problems resolution • Coordinates and decides the contingency actions • Decides the Roll back point • Coordinator: Business Area Represent on Executive Level

17. AES & SAP SAP is a dedicated member of our leadership team, not just a vendor