Enron Energy Services Energy Management Outsourcing Overview Enron

Enron Energy Services Energy Management Outsourcing Overview

Enron Corp. Energy Businesses Transportation & Distribution • Natural gas transportation • Electric distribution Wholesale Energy • Marketing and delivery of energy products worldwide New Business Retail Energy • Energy outsourcing to commercial and industrial customers Broadband Services • Bandwidth management and broadband delivery services

Our Strategy for Energy and Facility Management Traditional Energy Marketers Utilities Customer Receives Enron Commodity Management 4 Improved Core Business Focus Software Vendors Accounts Payable Equipment Manufacturers Controls Manufacturers Mechanical Contractors Electrical Contractors Energy Information Management Energy Asset Management Consultants Facilities Management Specialty Contractors Lenders Internal Treasury • Conditioned Air • Light • Managed Facilities 4 Reduced Operating Costs 4 Risk Transference Architects / Engineers HVAC Svc Companies 4 Redeployment of Capital Management 4 Access to World. Class Capabilities

Our Strategy to Optimize Total Costs Commodity Assets Total Energy Costs Today w Risk Management w Physical Supply w Total Cost Operating w Financial Strategies Settlements w Life Cycle w Reduces price Management volatility w Best Practices w Frees up budget dollars for expansion Labor Capital w Workforce Management w Structured Financing for Asset w Information -based Replacement Maintenance Programs w Monetization of Energy Assets and w Vendor asset deployment Management w Increases owner cash flows Increased Value Optimized Total Costs

Scope of Responsibilities Operations Facility Management • Develop scope and service level documents • Human transition Commodity Management Energy Asset Management • Verify site and commodity requirements • Develop scope and construction specification documents • Conduct analysis on current supply commitment • Evaluate opportunities and priorities with customers execution schedule • Build out Asset Tracking & Management database • Develop project approval process Financial Operations Customer Satisfaction • Build out database for financial reporting • Identify KPIs • Setup cash accounting and financial tracking systems in SAP • Schedule surveys and reporting • Establish Customer dashboard Operations Management Capital Management • Setup accounts & notify utilities • Arrange project financing as required • Agency Agreement from Customer • Verify invoice format • Setup invoice data transfer • Test invoice algorithms and file transfer to customer • Determine Customer’s reporting requirements

Enron Value u EES provides value to Customer in the following areas which REQUIRE expertise in today’s changing markets: – Commodity Procurement/Management – Energy Equipment Management – Engineering Services – Facility management – Capital Management – Energy Information Management

Structures Shared Savings Hybrids Guaranteed Savings LESS savings MORE LESS MORE impact of acquisition/divestiture economic transparency MORE accounting transparency LESS MORE operational impact LESS u The optimal structure will often come from somewhere in the middle of the continuum rather than either of the extremes

Deal Structures

Structuring Consideration Commodity – Risk tolerance – Expectations about deregulation Capital – Who’s capital Energy Infrastructure – Span of control – Maintain and/or upgrade – On/Off balance sheet – On/Off credit – Hurdle rates Facility Management – Span of control

Asset Operations General Overview

Energy Asset Management Services u Projects: Upgrading energy infrastructure to drive efficiency Energy Asset Management is … u Operations: Optimal operation of energy systems u Maintenance: Risk Based Maintenance - Optimal preventive, replacement and repair procedures

Next Steps

Enron Offering u EES provides value to Customer managing Risk – New Opportunities - New offerings • Demand Side Load Management - Fixed Price - Shared Savings - Management Service - Information Service - ?

Enron Energy Services