2006 Long-Term RFP

1. 2006 Long-Term RFP ENTERGY SERVICES, INC. February 2006 This presentation summarizes certain matters related to ESI’s 2006 Long-Term Request for Proposals (as it may be amended or modified, the “2006 Long-Term RFP”).

2. Agenda Items • Introductions • ESI’s RFP Process Overview • Fall 2004 RFP Results • RFP Process Safeguards • Overview of Resource Plan • 2006 Long-Term RFP Overview • Proposal Evaluation Process • Credit Analysis • Proposal Submission Process • Question and Answer Session ESI requests that all questions be submitted in writing so as to allow ESI the ability to provide written responses which will be made accessible to all parties on the RFP website. ESI will respond orally to some questions during the Question and Answer Session today. However, to the extent that ESI also provides a written response to any question, the written response will be deemed to supersede any information provided orally.

3. Introductions • Entergy Services, Inc. • Bill Mohl VP, Commercial Operations • Tony Walz Director, Planning & Analysis • Mark Strength Manager, Supply Procurement • Charles DeGeorge Manager, Supply Planning & Analysis • Lee Kellough Manager, Transmission Engineering • Cory Burton Wholesale Executive • Tom Moran VP, Credit Risk • Laura Berryman RFP Administrator • Independent Monitors • Process IM Elizabeth Benson, Energy Associates • Evaluation IM Potomac Economics (David Patton, Robert Sinclair, Michael Chiasson)

4. ESI’s RFP Process Overview

5. ESI’s Market-Based Resource Procurement Process Overview • Designed to support ESI’s resource planning objective to provide a portfolio of low-cost, reliable resources matched to both the near-term and long-term supply needs of Entergy System customers • Supply Procurement Process • Formalized RFPs will be issued in accordance with regulatory requirements and policies, including the LPSC’s Market-Based Mechanisms Order • Formalized RFPs will seek resources on an as-needed basis • Formalized RFPs complement ESI’s on-going procurements via short-term purchases (e.g., one year or less) from the market • Formalized RFPs seek to meet reliability and economic objectives, and limit exposure to fuel and market risks and uncertainties • Types of Resource Supply Roles • Baseload (e.g., solid fuel) • Dispatchable/Load-following (e.g., CCGT) • Peaking/Reserve

6. ESI Resource Procurement Options Summary • Formal RFP Products • Limited-term MUCPA/MUCCO, LD (1-3 year) • Asset acquisition or long-term purchase from existing generation resources • Acquisition, ownership position, or long-term purchase from new generation resources • ESI also has committed to seek intermediate-term products on behalf of at least EGS and ELL in an RFP later this year • Ongoing short-term purchase process • Annual Plan Products (e.g., call options, 5x16 block energy purchases) • Weekly and Monthly RFP Products • Hourly and Day-ahead Purchases • Self-Build/Self-Supply Options • Identify and execute (when and if appropriate) “Real Options” for self-build and/or self-supply opportunities including: • New Opportunities • Repowering • Upgrades of existing facilities

7. Market-Based Mechanisms (MBM) Overview • Key points and LPSC requirements for RFP process • 60 days notice required prior to filing draft RFP • 75 days notice required for review/settlement for draft RFP for long-term products • Independent Monitor should be enlisted to ensure no undue preference to affiliate bids or self-build/self-supply options • Documentation of procedures to enforce codes of conduct in handling of affiliate bids • If self-build/self-supply options exist, they must be identified at the time the draft RFP is issued and provide cost support data • Collaborative process regarding evaluation criteria between ESI, IM, LPSC, and Bidders • Documentation of how transmission capability and costs will be evaluated • MBM calls for part or all IM costs to be recovered through bid fees (capped at $5,000/bid) Market Participation and Input Encouraged on Front-End

8. Market Collaborative re: Competitive Procurement Processes • From June through November 2005, the LPSC Staff conducted “a collaborative to study barriers that may exist to robust competition in the wholesale generation markets in the Entergy region” • The following companies participated in the collaborative: Entergy Louisiana Entergy Gulf States Cleco Power Calpine Corporation Entegra Power Apex Power LS Power / Plum Point Cottonwood Energy Marathon Oil Bayou Steel NRG Suez Energy Marketing Longacre Partners • During the collaborative, the parties succeeded in defining and largely resolving eight issues pertaining to this RFP

9. Market Collaborative re: Competitive Procurement Processes Resolutions reached by participants 1. Timing of next RFP • 60-day notice issued 11/30/05; draft posted as planned on 1/31/06 • Issue resolved 2. Selection of IM • Two new IMs were selected for this RFP, including one IM that was suggested by various merchants • Issue resolved 3. Transmission evaluation of proposals • Merchants requested more transparency in the methodology • New procedures have been developed by ESI, including posting load flow cases and input files on RFP website • Issue resolved for purposes of the collaborative; market participants are invited to comment on ESI’s proposed methodology through RFP comment process

10. Market Collaborative re: Competitive Procurement Processes Resolutions reached by participants (cont’d) 4. Credit/collateral requirements • Some merchants urged flexibility with regard to requirements • ESI agreed to consider alternate forms of collateral (Appendix F reflects flexibility regarding collateral types) • Discussions resulted in a substantial narrowing of differences; market participants are invited to comment on ESI’s proposed methodology through RFP comment process 5. Use of debt imputation • Debt imputation will not be used in Stage 1 of the evaluation process • Although the issue was not fully resolved, substantial progress in narrowing differences was made 6. RFP planning information • Some merchants requested that information on the Entergy System resource plan be provided in the RFP • ESI provided a description of the Entergy System’s Strategic Supply Resource Plan in the Draft RFP (Appendix H) • Issue resolved

11. Market Collaborative re: Competitive Procurement Processes Resolutions reached by participants (cont’d) 7. Power plant retirement • In response to Staff requests, the Draft RFP: • states that ESI will examine the potential for proposed resources to displace existing resources in addition to seeking incremental baseload and load-following capacity • includes a status report on “Downstream of Gypsy” project 8. Product types • Merchants have expressed interest in offering 5 to 10 year PPA products • Although there is a preference for long-term resources, proposals with a shorter Delivery Term will not be rejected as non-conforming in the 2006 Long-Term RFP • ESI also has committed to seek intermediate-term products on behalf of at least EGS and ELL in an RFP later this year While not all of these issues were fully resolved in the collaborative, the parties regarded the progress achieved to be substantial

12. Other Key Elements of the 2006 Long-Term RFP • Self-build / self-supply options are being considered in this RFP • Solid Fuel self-build option in the Amite South planning region of the Entergy System • ESI is no longer considering a load-following CCGT self-supply project for EAI in this RFP • Entergy Competitive Affiliates are allowed to participate in this RFP • Proposal submittal fees will be required for each registered proposal • No Bidder will be excluded or prohibited from participating in this RFP on the basis of credit • Proposals from QFs will not be provided any form of preference or enjoy any priority of selection in the RFP based solely on their QF status

13. Fall 2004 RFPResults

14. RFP Response Note: Non-conforming proposals are not included in the summary“n/a” indicates that the proposal type was not solicited * Mutually exclusive capacity bid into multiple proposals

15. Summary of Contracts Resulting From Previous RFPs These totals represent 17 different contracts with 11 different counterparties AIncludes a conditional option to increase the capacity up to the upper bound of the range. bThe contracted capacity will increase from 101 MW to 121 MW in 2010. cIt should be noted that this table does not reflect (i) the River Bend 30% life-of-unit power purchase agreements totaling approximately 300 MW between EGS and ELL, and between EGS and ENO related to EGS’s unregulated portion of the River Bend nuclear station, which portion was formerly owned by Cajun Electric Power Cooperative, Inc. or (ii) the EAI wholesale base load capacity life-of-unit power purchase agreements totaling approximately 220 MW between EAI and ELL and between EAI and ENO related to the sale of a portion of EAI’s coal and nuclear base load resources (which were not included in retail rates) to ELL and ENO executed in 2003; or (iii) the 12 month agreements between EAI and EGS and between EAI and EMI relating to the sale of a portion of EAI’s coal and nuclear base load resources (which were not included in retail rates) to EGS executed in 2005, which agreements have been approved by the Federal Energy Regulatory Commission (“FERC”) and, in the case of the agreement between EAI and EGS, by the LPSC. These resources were identified outside of the formal RFP process but were submitted as formal proposals in response to the Spring 2003 RFP, which confirmed the economic merits of these resources.

16. ESI Gas/Oil Generation and Purchases 1999-2005 Note: Purchases include Joint-Account Purchases, individual Operating Co. Purchases, and QF Put

17. 2006 Long-Term RFPProcess Safeguards

18. RFP Process Safeguards • Independent Monitors • Code of Conduct • RFP Process Design and Implementation • Confidentiality Protections

19. Role of Independent Monitors • ESI has retained two Independent Monitors (IMs) to assist in the development of the RFP solicitation, evaluation and selection process in support of ESI’s efforts to ensure that the RFP and its evaluation process will be objective and impartial • Process IM – Elizabeth Benson, Energy Associates • Evaluation IM – Potomac Economics (David Patton, Robert Sinclair, Michael Chiasson) • The Independent Monitors also will monitor the design of the RFP and the conduct of the RFP solicitation, evaluation, selection and contract negotiation processes to provide an objective third-party perspective in support of ESI’s efforts to ensure that all proposals are treated in a consistent fashion and that no undue preference is provided to Entergy Competitive Affiliates or self-build/self-supply options • The specific roles of each IM are described in the Scope of Work Activities of the Independent Monitors that is posted on the RFP Website

20. RFP Process Safeguards • Code of Conduct • All employees of ESI, any Entergy Operating Company, or any Entergy Competitive Affiliate, including those involved in the RFP process, must adhere to the appropriate Affiliate Rules and Codes of Conduct as applicable and further outlined in the RFP • Link provided on ESI RFP website • Additional protocols • Each RFP Proposal Evaluation Team is made up of designated personnel. Team composition is overseen by the Process IM • ESI personnel involved with the 2006 Long-Term RFP evaluation process will adhere to the provisions of a confidentiality acknowledgement that governs access to and uses of information contained in proposals and proposal documents • The Self-Build Commercial Team will be segregated from the RFP proposal evaluation process • RFP Process Design and Implementation • Various elements of the RFP process have been designed to assure fair treatment of all Bidders (as described in the following slides)

21. RFP Process Safeguards Communications with ESI before Proposal Submission • All issues related to the RFP should be directed to Ms. Laura Berryman, the RFP Administrator • Potential bidders wishing to communicate with the IMs may contact Ms. Benson • Any inquiries about the Entergy Transmission System should be directed to the Transmission Organization through the OASIS web site http://oasis.e-terrasolutions.com/OASIS/EES • Unapproved contact with ANY other ESI Employee for ANY purpose in connection with the RFP is prohibited, and may, depending on the circumstances, constitute grounds for disqualification • All questions from market participants relating to the RFP should be submitted through the question and answer process outlined in Section 2.5 of the RFP. The procedure for issuing questions regarding the transmission system is outlined in Section 2.6 of the RFP • ESI will have an RFP “Hotline” available from April 18th through May 19th to assist Bidders only with respect to technical questions regarding the electronic registration or proposal submission process

22. RFP Process Safeguards Data Segregation • The objective of the proposal segregation process is to limit data distribution on a “need-to-know basis” within the RFP evaluation teams, and to reduce to the extent possible the distribution of confidential information • Segregation of information obtained from proposals is performed automatically by electronic processing of all proposals • Pre-formatted proposal data reports with information about proposals are prepared by the automated process prior to the distribution of reports to the evaluation teams • This process captures relevant information submitted in “Special Considerations” fields • The proposal data reports are reviewed by the Process IM before distribution to the RFP evaluation teams • This process supports the effort to keep the Bidder identity unknown to the RFP evaluation teams • Proposal data reports are limited to the data necessary for each team to perform its specific analysis • Economic Evaluation requires details regarding dispatch flexibility, pricing, availability, and mutual exclusivity of the proposals • Other evaluation processes require details regarding that specific area of evaluation (i.e., Fuel, Transmission, Credit)

23. RFP Process Safeguards Communication with Bidders During Evaluation • No communication with Bidders is expected during the initial evaluation process • ESI retains the right to contact Bidders via the RFP Administrator to obtain clarification or request additional information • Bidders should direct any questions to the RFP Administrator • Any communication with Bidders will be under the supervision of the Process IM

24. RFP Process Safeguards Q&A Process • The objectives of the Question and Answer Process include the following: • To ensure to the extent practicable that all Bidders have equal access to information that may be potentially relevant to their proposals • To minimize the need for either ESI or Bidders to disclose confidential information • To maintain to the maximum extent practicable the confidentiality of proprietary information that is disclosed in Bidders’ proposals or otherwise in connection with the RFP • To ensure compliance with all applicable affiliate rules and codes of conduct and other information sharing rules

25. RFP Process Safeguards Q&A Process at Today’s Conference • At today’s conference, all questions will be submitted in writing • Oral responses will be provided where practicable • Written answers will be posted on the RFP Website • Written answers may contain information different from, or in addition to, information provided orally at the Conference, in which case the written answer will supercede the oral response

26. 2006 Long-Term RFPOverview of Resource Plan

27. System Resource Needs Supply Objectives The supply needs that determine the resource requirements of the Operating Companies are driven by six basic resource supply objectives: Reliability Provide adequate resources to meet customer peak demands with adequate reliability Production Cost – Baseload Supply Requirements Provide low cost baseload resources to serve baseload requirements (the firm load level that is expected to be exceeded for at least 85% of all hours per year) Production Cost – Load Following Supply Requirements Provide efficient, dispatchable load-following resources to serve the time varying load shape levels that are above the base load requirement load levels Generation Portfolio Enhancement Provide a generation portfolio that is more efficient and avoids an over-reliance on aging resources Risk Mitigation – Price Stability Mitigate the exposure to price volatility associated with uncertainties in fuel and purchased power costs Risk Mitigation – Supply Diversity Risk Mitigation – Supply Diversity – Mitigate the exposure to major supply disruptions that could occur from concentrated or systematic risks, for example outages of a single generation facility

28. System Resource Needs Summary of Resource Requirements Summary System of Resource Needs(MWs) SSRP anticipates 1500-3000 MWs of short-term and limited-term products acquired through ongoing RFP efforts. Long-term and limited-term additions include resources added to the utility portfolio since the adoption of the SSRP. Resources exclude short-term, seasonal, monthly and weekly purchases.

29. Purchases Reserves Peaking Intermediate High CF LF Base System Resource Needs Entergy System 2006 Resource Requirements and Capability The following chart compares 2006 functional requirements for the Entergy System with long-term controlled resources. Load Shape Requirements (MWs) Capacity (MWs) Requirements Existing Portfolio Existing intermediate units are capable of serving the Peaking/Reserve role

30. System Resource Needs Key Considerations in Procurement Design AMOUNT • Total resource requirement for 2006 exceeds long-term controlled resources by over 1400 MWs • System needs are increasing with load growth (~500 MWs/Year) TYPE • The Entergy System determines the type of generation needed to serve its load shape requirements at the lowest reasonable cost given current expectations and supply options • System baseload requirement exceeds long-term controlled baseload resources by nearly 3000 MWs • Solid Fuel resources are sought to address baseload needs • CCGT can serve baseload requirements economically under some circumstances • CCGT resources needed to serve load-following requirements • Current portfolio is highly gas correlated (about 50% on an energy basis) • Solid Fuel resources sought to increase fuel diversity and reduce exposure to fuel price fluctuations

31. System Resource Needs Two Distinct Products • Load-following CCGT and baseload Solid Fuel products respond to distinct planning objectives Gas-Fired CCGT Solid Fuel Primary Planning Objectives In Product Design • Production Cost – Load Following • Generation Portfolio Enhancement • Reliability • Production Cost – Baseload • Risk Mitigation – Price Stability • Risk Mitigation – Supply Diversity • Reliability Secondary Planning Objectives In Product Design • Production Cost – Baseload • Risk Mitigation – Price Stability • Generation Portfolio Enhancement • Generation Portfolio Enhancement

32. 2006 LONG-TERM RFPOverview

33. 2006 Long-Term RFP - Highlights • ESI will accept written feedback from market participants and other interested parties on the draft RFP, provided that such comments are provided to the RFP Administrator by no later than March 17, 2006 • Final RFP will be issued on or about April 17, 2006 • CCGT proposals will be due by 5:00 p.m. CPT on May 5, 2006 • Solid Fuel proposals will be due by 5:00 p.m. CPT on May 19, 2006 • In accordance with the requirements of the LPSC’s Market-Based Mechanisms Order, ESI has retained Independent Monitors to oversee the design and implementation of this RFP and provide an objective third-party perspective • The electronic proposal submission process used in previous RFPs is used in this RFP as well to simplify the proposal submission process for Bidders and to help streamline and make ESI’s RFP evaluation process more efficient • All proposals must be registered during Bidder Registration • ESI will have an RFP “Hotline” available during April 18th through May 19th to assist Bidders only with respect to technical questions regarding the electronic registration or proposal submission process • Long-term resource proposals are being requested in the 2006 Long-Term RFP • ESI intends to solicit intermediate-term products in an RFP later this year

34. RFP Participants –2006 Long-Term RFP • Potential RFP Participants • Electric Utilities • Marketers • Wholesale Generators • Independent Power Producers • Qualifying Facilities • Entergy Competitive Affiliates

35. 2006 Long-Term RFP Process Timeline Evaluation & Negotiation Final RFP Issued On or about 4/17/06 CCGT Proposals Due 5/05/06 Solid Fuel Proposals Due 5/19/06 Tech. Conf. w/ LPSC & Bidder’s Conf. Houston 2/23/06 CCGT Proposals Bidders Notified of Final Selection 12/01/06 Solid Fuel Proposals Bidders Notified of Final Selection 1/14/07 Bidder Registration Process completed 4/21/06 Payment of Proposal Submittal Fees 4/27/06 Solid Fuel Preliminary Shortlist Notification 10/13/06 CCGT Proposals Execution of Definitive Agreements 2/01/07 Solid Fuel Proposals Execution of Definitive Agreements 4/13/07 CCGT Preliminary Shortlist Notification 9/15/06 Formal Solicitation Process Timeline is subject to change

36. 2006 Long-Term RFP Products • ESI is soliciting proposals from Bidders for long-term capacity provided by load-following combined cycle gas turbine (“CCGT”) generation resources and/or baseload Solid Fuel resources • Load-Following CCGT • A load following resource should have scheduling or operational flexibility to respond to changing load requirements and must be capable of cycling (i.e., start-up and shut-down) on a daily basis and operating across a range of utilization and output levels.  • The resource is expected to dispatch between the unit minimum (typically 30-40% of unit capability) and maximum in a timely manner based on short notice changes (with the notice period to be specified by contract), including hourly swings, start-ups and shutdowns.  • The ability of a unit to be placed on automatic generation control (“AGC”) is considered to contribute to the load-following capability of the resource, although AGC is not required.   • In addition, the resource must have available to it sufficient fuel supply arrangements in order to meet the dispatch requirements of a load-following resource. • Baseload “Solid Fuel” • (1) coal, lignite, nuclear, petroleum coke, • (2) other thermal technologies, provided that any proposal for such other thermal technology provides fuel at a guaranteed fuel price, or • (3) renewables • Baseload resources are expected to be available and operate in most hours

37. 2006 Long-Term RFP Products • Long-Term Non-Tolling PPA – Load-Following CCGT (Product Package A) • Long-Term Tolling PPA – Load-Following CCGT (Product Package B) • Ownership Acquisition – Load-Following CCGT (Product Package C) • Long-Term PPA – Baseload Solid Fuel (Product Package D) • Ownership Acquisition – Baseload Solid Fuel (Product Package E)

38. Long-Term Non-Tolling PPA – Load-Following CCGT (Product Package A) • Product • Scheduling on a Day-Ahead and/or Intra-Day basis • Buyer prefers a minimum Delivery Term of 20 years • Start date of the proposed Delivery Term must occur no later than June 1, 2009; however, ESI prefers proposals with a Delivery Term Start Date as early as June 1, 2007 • Capacity Quantity • Minimum Capacity - one entire 1X1 CCGT train (~250 MW to 400 MW) or a portion of a 2x1 CCGT train • For cogeneration units, neither ESI nor any Entergy Operating Company is obligated to assume responsibility for any host load requirements • Pricing • Option Premium ($/kW-year) • Fixed Heat Rate multiplied by Gas Price Index (Henry Hub or Houston Ship Channel) • Variable O&M Payment in $/MWh • Fixed Start-up Payment $/MW per Start • Fuel • Seller provides fuel Term Sheet A of Appendix C summarizes the specific requirements for this product

39. Long-Term Tolling PPA – Load-Following CCGT (Product Package B) • Product • Scheduling on a Day-Ahead and/or Intra-Day basis • Buyer prefers a minimum Delivery Term of 20 years • Start date of the proposed Delivery Term must occur no later than June 1, 2009; however, ESI prefers proposals with a Delivery Term Start Date as early as June 1, 2007 • Capacity Quantity • Minimum Capacity - one entire 1X1 CCGT train (~250 MW to 400 MW) • Pricing • Option Premium ($/kW-year) • Guaranteed Heat Rate, guaranteed by Seller within a +/- 3% bandwidth • Variable O&M Payment in $/MWh • Fixed Start-up Payment $/MW per Start • Fuel • Buyer provides fuel • If the proposal is not for the entire facility, Seller must provide sufficient revenue quality metering to allow for the segregation of fuel and all electrical output associated with the Buyer’s generating unit or portion of the facility Term Sheet B of Appendix C summarizes the specific requirements for this product

40. Ownership Acquisition – Load-Following CCGT (Product Package C) • Product • Outright acquisition of a combined cycle gas turbine (CCGT) generating unit • Buyer requires 100% ownership of the generating unit and prefers to purchase existing operating assets • The proposed generating unit in this product category must be operational by no later than June 1, 2009; however, ESI prefers proposals that currently are operational or will be operational as early as June 1, 2007 • Capacity Quantity • 100% of generating unit • For cogeneration units, neither ESI nor any Entergy Operating Company is obligated to assume responsibility for any host load requirements • Purchase Price • Single fixed payment Term Sheet C of Appendix C summarizes the specific requirements for this product

41. Long-Term PPA – Baseload Solid Fuel (Product Package D) • Product • Scheduling on a real time basis • Buyer prefers a minimum Delivery Term of 30 years • The start date of the proposed Delivery Term must occur no later than December 31, 2012 • Capacity Quantity • Minimum Capacity - 50 MW • For cogeneration units, neither ESI nor any Entergy Operating Company is obligated to assume responsibility for any host load requirements • Pricing • Option Premium ($/kW-year) • Fixed Heat Rate multiplied by the Fuel Price • Variable O&M Payment in $/MWh • Fuel • Seller provides fuel • A guaranteed fuel price is required if technology is something other than Coal, Petroleum Coke, Lignite, or Nuclear; if renewable, a guaranteed energy price is required Term Sheet D of Appendix C summarizes the specific requirements for this product

42. Ownership Acquisition – Baseload Solid Fuel (Product Package E) • Product • Outright acquisition of baseload Solid Fuel generating unit • Buyer will accept partial ownership of the generating unit • Buyer requires a Commercial Operation Date no later than December 31, 2012 • Capacity Quantity • Minimum Capacity - 50 MW • For cogeneration units, neither ESI nor any Entergy Operating Company is obligated to assume responsibility for any host load requirements • Purchase Price • Single fixed payment Term Sheet E of Appendix C summarizes the specific requirements for this product

43. Other Key Considerations • Regulatory Approvals • All definitive agreements shall be conditioned upon receipt of regulatory approvals, including the recovery of the cost of the resource, acceptable to ESI in its sole discretion • Potential for short-term bridge agreement • Contract Terms and Conditions • Term Sheets detailing terms and conditions have been provided • These Term Sheets are expected to serve as the basis for final contract negotiations and execution without any material changes • Bidders should take the terms and conditions specified in these Term Sheets into consideration in the pricing of their proposals

44. 2006 Long-Term RFPProposal Evaluation Process

45. Proposal Evaluation Process - Objective • The primary objective of the proposal evaluation is to identify the proposals that result in the highest benefit to Entergy System customers • The highest benefit is realized through proposals that • Meet the supply objectives of the Entergy System • Minimize total production cost • Satisfy reliability criteria • Evaluation designed to be • Fair • Impartial • Applied consistently

46. Proposal Evaluation Process – Overview ILLUSTRATIVE All Conforming Proposals Stage 1 (EET) Screening Analysis ($/MWh) Deliverability Evaluation (TAG) Preliminary Shortlist Stage 2 (EET) Net System Benefit (NPV $/MW) Preliminary Due Diligence Additional Evaluation Fuel Evaluation (FET) Final Shortlist Final Selection & Awards Negotiation & Comprehensive Due Diligence

47. Proposal Evaluation Process – Separate Evaluations • Evaluation of CCGT and Solid Fuel proposals will be performed separately • Similar but distinct processes • Proceed on different schedules • Tools and assumptions may differ • Solid Fuel evaluation process will • Require a longer evaluation period • Allow for refinement of proposals • Acknowledge that the development status will likely differ among proposals • Consider development risk

48. Proposal Evaluation Process – Stage 1 Stage 1, Screening Analysis • Proposals will be ranked based on the levelized cost of each proposal expressed in $/MWh over the relevant planning horizon • 20 years for CCGT proposals • 30 years for Solid Fuel proposals • Operating assumptions will reflect the planned operating role • High Capacity Factor Load Following for CCGT proposals • Baseload for Solid Fuel proposals • Transmission deliverability benefits and costs will be considered • Resulting in Preliminary Shortlists for • CCGT proposals • Solid Fuel proposals

49. Proposal Evaluation Process – Stage 2 Stage 2, Detailed Evaluation • Proposals will be ranked based on the net system benefit of each proposal expressed in net present value $/MW added over the relevant planning horizon • 20 years for CCGT proposals • 30 years for Solid Fuel proposals • Detailed fuel evaluation will be considered • Effects of imputed debt for PPA proposals will be performed • Normalizing term adjustment may apply • January 1, 2007 to December 31, 2026 for CCGT proposals • January 1, 2007 to December 31, 2036 for Solid Fuel proposals • Terminal value consideration may apply • Resulting in Final Shortlists for • CCGT proposals • Solid Fuel proposals

50. Proposal Evaluation Process – Deliverability Evaluation Overview • Proposals ultimately are expected to qualify as Long-Term Network Resources • Bidders will have access to the same information that SPO’s Transmission Analysis Group (“TAG”) uses to • Identify whether potential constraints exist • Estimate transmission upgrade costs • Identify other potential constraint mitigation alternatives • Bidders may provide their best recommendation to alleviate potential constraints • TAG will consider the validity and estimated cost of any Bidder identified constraint mitigation recommendations • For each Candidate Proposal, TAG will submit SIS requests to TBU; however, if these results are not received in time, EET will use TAG-developed estimates to develop the Preliminary Shortlist